ThingsToConsiderWhen BuyingaHome DavidGoldberg NMLS#728872 VicePresidentofMortgageLending MutualofOmahaMortgage dgoldberg@mutualmortgage.com www.GoldbergMortgage.com (866)837-8677 FALL2023 EDITION
TableofContents 3What’sGoingOninthe HousingMarketRightNow? 6TopReasonsToOwnYourHome 7TwoQuestionsToAskYourselfifYou’re ConsideringBuyingaHome 9TheImpactofChangingMortgageRates 11HomeownershipHelpsProtectYou FromInflation 12WhyHomeownershipWinsinthe LongRun 15WaysToOvercomeAffordability ChallengesinToday’sHousingMarket 16TheImportanceofGettingPre-Approved 18ThingsToAvoidAfterApplying foraMortgage 19TipsforMakingYourBestOffer onaHome 21GetClarityontheHousingMarketwith HelpfromaRealEstateExpert
What’sGoingOninthe HousingMarketRightNow?
You’reprobablywonderingwhatthelatesthousingmarketnewsmeansforyour homebuyingplansthisfall.Herearethethreetopthingstoremember.
1.ThereAren’tManyHomesAvailableforSaleRightNow
Housinginventoryismeasuredbythenumberofavailablehomesonthemarket.It’s alsomeasuredbymonths’supply,meaningthenumberofmonthsitwouldtaketosell allthoseavailablehomesbasedoncurrentdemand.Inabalancedmarket,there’s usuallyaboutasix-monthsupply–buttoday,weonlyhaveabouthalfofthat.With inventorythatlow,buyercompetitionisup,andthatmeansmanyhomesoftenreceive multipleoffers.Workingwithaprofessionalcanhelpyoubemorecompetitiveinthis kindofmarket.
2.MortgageRatesNear6%or7%AretheNewNormal
Mortgageratesmorethandoubledinthe2022calendaryear.That’sneverhappened before,andtherapidrisecausedsomebuyerstodelaytheirplans.Butsincelast October,rateshavesettledabitinroughlythe6%to7%range.
It'stimetounderstandratesaround6%or7%arethenewnormal.Therateswe experiencedafewyearsago,like3%,arenowathingofthepast.
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3.HomePricesAreGoingUpAgain
Ifyou’rekeepingupwiththenews,youmightbeuncertainaboutwhat’shappening withhomepricesandworriedifthingswillgetworse.Wellknowthis,theworsthome pricedeclinesarebehindusandpricesareappreciatingnationally.
Butit'simportanttoknowpricesdifferdependingonwhereyoulive.Overall,low inventoryandrelativelystrongbuyerdemandaregoingtokeepupwardpressureon prices.DougDuncan,SVPandChiefEconomistatFannieMae,saysthisabouthome pricesrightnow:
“...housingpricescontinuetoshowstrongergrowththanwhatwas previouslyexpected...Housing’sperformanceisatestimonytothestrength ofdemographic-relateddemand...”
So,withpricesgoingupagain,ifyoufindahomethatsuitsyourneeds,it’sprobably notthebestideatowait.
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Let’sconnectsoyouhaveanexperttohelpwithallyourquestionsaboutthehousing market.We’llgooveryourgoalsandwhat’shappeninginourarea,givingyouthe knowledgetomakeastrongandconfidentdecision.
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Ifyou’rethinkingaboutshoppingfora homethisfall,giveyourselfplentyoftime tofindaproperty,andthenbringyour A-gametothenegotiatingtable.
-NerdWallet
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TwoQuestionsToAskYourselfif You’reConsideringBuyingaHome
Ifyou’rethinkingofbuyingahome,chancesareyou’repayingattentionto homepricesandmortgagerates.Herearethetoptwoquestionsyouneedtoask yourself–andwhatthedatasays–asyoumakeyourdecision.
1.WhereDoIThinkHomePricesAreHeading?
OnereliableplaceyoucanturntoforthatinformationistheHomePriceExpectationSurveyfrom Pulsenomics–asurveyofanationalpanelofoveronehundredeconomists,realestateexperts, andinvestmentandmarketstrategists.
Accordingtothelatestrelease,theexpertssurveyedareprojectingbetween2.17%and4.18% appreciationeveryyearforthenextfiveyears(seethegraphbelow).Theworstpricedeclines arealreadybehindus,andpricesareappreciatingagain.
Thegreeninthegraphbelowshowspricesareexpectedtokeepappreciatingthisyearand beyond.
So,whydoesthismattertoyou?Itmeansyourhomewilllikelygrowinvalueandyoushould gainhomeequityintheyearsahead,butonlyifyoubuynow.Ifyouwait,basedonthese forecasts,thehomewillonlycostyoumorelateron.
3.32% 2.17% 3.24% 3.79% 4.18% 20232024202520262027
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EstimatedHomePricePerformance DecembertoDecember,asForecastedinQ32023
Source:HPES
2.WhereDoIThinkMortgageRatesAreHeading?
Weknowbasedonthelatestreportsthatinflationhasmoderatedfromitspeak.Thisisan encouragingsignforthemarketandformortgagerates.Here’swhy.
Wheninflationcools,mortgageratesgenerallyfallinresponse.Thismaybewhysomeexperts aresayingmortgagerateswillpullbackslightlyoverthenextfewquarters.
MortgageRateProjections
Butnoteventheexpertscansaywithabsolutecertaintywheremortgagerateswillbenextyear, orevennextmonth.That’sbecausetherearesomanyfactorsthatcanimpactwhathappens. So,togiveyoualensintothevariouspossibleoutcomes,here’swhatyoushouldconsider:
•Ifyoubuynowandmortgageratesdon’tchange:Youmadeagoodmovesince homepricesareprojectedtogrowwithtime,soatleastyoubeatrisingprices.
•Ifyoubuynowandmortgageratesfall(asprojected):Youprobablystillmadea gooddecisionbecauseyougotthehousebeforehomepricesappreciatedmore.And youcanalwaysrefinanceyourhomelaterifratesarelower.
•Ifyoubuynowandmortgageratesrise:Youmadeagreatdecisionbecauseyou boughtbeforeboththepriceofthehome,andthemortgageratewentup.
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Ifyouwanttobuyahome,it'sessentialtostayinformedonhomepricesand mortgagerates.Expertscanprovidehelpfulprojectionstoguideyou.Let'sconnectso youhaveanexpertopiniononourlocalmarket.
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QuarterFannieMaeMBANARAverageof AllThree 2023Q46.70%6.20%6.30%6.40% 2024Q16.50%5.90%6.10%6.17% 2024Q26.30%5.60%6.00%5.97% 2024Q36.20%5.30%6.00%5.83%
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Atthepointwherecoreinflation getsbetter,mortgagerateswill,too.
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-GregMcBride,ChiefFinancialAnalyst,Bankrate
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WhyHomeownership WinsintheLongRun
Beforedecidingifyou’regoingtobuyahomerightnow,thinkaboutthe advantagesitcanbringyouinthelongrun.
Ifyouaskcurrenthomeowners,you’dprobablyhaveahardtimefindingsomeonewhoregrets theirdecisiontobuyahome.That’sbecausehomevaluesgrowwithtime.Here’salookathow homepriceappreciationcanreallyaddupovertheyears.
HomePriceGrowthoverTime
ThemapbelowusesdatafromtheFederalHousingFinanceAgency(FHFA)toshowhomeprice gainsoverthelastfiveyears.Themapisbrokenoutregionallytoconveylargermarkettrends.
PercentChangeinHomePrices
Source:FHFA
Youcanseehomepricesgrewonaveragebyabout57%nationwideinafive-yearperiod. Differentregionsvary,butoverall,homepricesgainedsolidgroundinashorttime.
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Over5Years,Q22023
Andifyouexpandthattimeframeevenmore,thebenefitofhomeownershipandthedrastic gainshomeownersmadeovertheyearsbecomeevenclearer(seemapbelow):
PercentChangeinHomePrices
SinceQ11991,Q22023 Source:FHFA
Thesecondmapshows,nationwide,homepricesappreciatedbyanaverageofover297% overaroughly30-yearspan.
Thisnationwideaveragetellsyouthetypicalhomeownerwhoboughtahouse30yearsagosaw theirhomealmosttripleinvalueoverthattime.That’sakeyfactorinwhysomanyhomeowners whoboughttheirhomesyearsagoarestillhappywiththeirdecision.
Andwhileyoumayhaveheardtalkinlate2022thathomepriceswouldcrash,itdidn’thappen. Eventhoughhomepriceshavemoderatedfromtherecordpeakwesawduringthe‘unicorn’ years,pricesarealreadyreboundingtoday.Thatmeansyourhomeshouldgrowinvalueoverthe nextyear.
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Beforeyoumakeupyourmindaboutwhethertobuyahomethisfallornot, remembertheincrediblelong-termbenefitsofhomeownership.Ifyou’rereadytostart theconversation,let’sconnecttoday.
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...homeownershipisacatalystforbuildingwealth forpeoplefromallwalksoflife.Amonthly mortgagepaymentisoftenconsideredaforced savingsaccountthathelpshomeownersbuildanet worthabout40timeshigherthanthatofarenter.
-LawrenceYun,ChiefEconomist,NationalAssociationofRealtors
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TheImportanceofGetting Pre-Approved
Whenyouwanttobuyahome,oneofthefirstthingsyouneedtodoisgetpreapproved.Butwhyisthisstepsoimportant?Tofindout,let'sunderstandwhat pre-approvalisandhowithelpsyou.
WhatIsPre-Approval?
Experianexplainsitlikethis:
“Amortgagepreapprovalisa documentfromalenderindicatingyou areconditionallyapprovedfora mortgageloan—uptoaspecific amount—tobuyahouse.Itusually specifiesthetypeofloanyouqualify forandtheinterestratethelender wouldchargeyouuponcompletionofa fullmortgageapplication.”
Basically,pre-approvalgivesyou criticalinformationaboutthe homebuyingprocessthat’llhelpyou understandhowmuchyoumaybeable toborrowsoyouhaveastrongergrasp ofyouroptions.
HowDoesItWork?
Aspartofthepre-approvalprocess, alenderlooksatyourfinancesto decidewhatthey’dbewillingtoloan you.Fromthere,yourlenderwillgive youapre-approvallettertohelpyou understandhowmuchmoneyyoucan borrow.
Thatcanmakeiteasierwhenyouset outtosearchforhomesbecauseyou’ll knowyouroverallnumbers.Andwith highermortgageratesimpacting affordabilityformanybuyerstoday,a solidunderstandingofyournumbersis evenmoreimportant.
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Pre-ApprovalHelpsShowYou’re aSeriousBuyer
Pre-approvalcanhelpasellerfeelmore confidentinyourofferbecauseitshows you’reseriousaboutbuyingtheirhouse. And,withsellersseeingaslightincrease inthenumberofoffers,makingastrong offerwhenyoufindtheperfecthouse iskey.
ArecentarticlefromCNBCsays:
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Apre-approvallettershowsthat youcansecureamortgage.This alonegivesyouanadvantageover potentialbuyerswithoutpreapproval,especiallyincompetitive marketswhererealestateagents andsellerscanaffordtobepicky aboutwithwhom theywork.”
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Gettingpre-approvedisabigdeal whenyouwanttobuyahome.It helpsyoufigureouthowmuch moneyyoucanborrow,anditalso showssellersyou'reseriousabout buyingtheirhouse.
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TipsforMakingYourBestOffer onaHome
Today’smarketisstillcompetitiveinmanyareasbecausethesupplyofhomes forsaleisstilllow.Ifyou'rebuyingahomethisfall,herearesometipstomake agoodoffer.
1.LeanonaRealEstateProfessional
Relyonanagentwhocansupportyourgoalsandhelpyouunderstandwhat’s happeningintoday’shousingmarket.Agentsareexpertsinthelocalmarketandonthe nationaltrendstoo.They’llusebothofthoseareasofexpertisetomakesureyouhave alltheinformationyouneedtomovewithconfidence.
Plus,theyknowwhat’sworkedforotherbuyersinyourareaandwhatsellersmaybe lookingforinanoffer.Itmayseemsimple,butcateringtowhatasellerneedscanhelp yourofferstandout.AsanarticlefromForbessays:
"Gettingtoknowalocalrealtorwhereyou’rehopingtobuycanalsopotentially giveyouacrucialedgeinatighthousingmarket.“
2.GetPre-ApprovedforaHomeLoan
Havingaclearbudgetinmindisespeciallyimportantrightnowgivencurrent affordabilitychallenges.Thebestwaytogetaclearpictureofwhatyoucanborrowisto workwithalendersoyoucangetpre-approvedforahomeloan.
That’llhelpyoubemorefinanciallyconfidentbecauseyou’llhaveabetterunderstanding ofyournumbers,anditshowssellersyou’reserioustoo.Andthatcangiveyoua competitiveedgeifyoudogetintoamultipleofferscenario.
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3.MakeaFairOffer
It’sonlynaturaltowantthebestdealyoucangetonahome.However,submittingan offerthat’stoolowdoeshavesomerisks.Youdon’twanttomakeanofferthatwillbe tossedoutassoonasit’sreceivedjusttoseeifitsticks.AsRealtor.comexplains:
“...anofferpricethat’ssignificantlylowerthanthelistingprice,isoftenrejected bysellerswhofeelinsulted...ifasellerisoffendedbyabuyerorisn’ttaking thebuyerseriously,there’snotmuchyou,ortherealestateagent,cando.”
Theexpertiseyouragentbringstothispartoftheprocesswillhelpyoustay competitiveandfindapricethat’sfairtoyouandtheseller.
4.TrustYourAgent’sExpertiseThroughoutNegotiations
Overthepastfewyears,somebuyersskippedhomeinspectionsordidn’taskfor concessionsfromthesellerinordertosubmitthewinningbidonahome.Anarticle fromBankrateexplainsthisisn’thappeningasoftentodayandthat’sgoodnews:
“It’sinthebuyer’sbestinteresttohaveahomeinspected...Inspectionsalert youtoexistingorpotentialproblemswiththehome,givingyounotjustanearly headsupbutalsoausefulnegotiatingtactic.”
Fortunately,today’smarketisdifferent,andyoumayhavemorenegotiatingpowerthan before.Whenputtingtogetheranoffer,yourtrustedrealestateadvisorwillhelpyou thinkthroughwhatleverstopullandwhichonesyoumaynotwanttocompromiseon.
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Whenyoubuyahomethisfall,let’sconnectsoyouhaveanexpertonyoursidewho canhelpyoumakeyourbestoffer.
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GetClarityontheHousingMarket withHelpfromaRealEstateExpert
Arealestateexpertknowsalotaboutwhat'sgoingonwithhomeprices,the numberofhousesavailable,andwhattheexpertspredict.Theyusethis knowledgetohelpyouwhenyou'rebuyingahome.
WhyYouWantToLeanonaTrustedProfessional
JayThompson,RealEstateIndustryConsultant,explains:
“Housingmarketheadlinesareeverywhere.Manyarequitesensational,ending withexclamationpointsorpredictingimpendingdoomfortheindustry.Clickbait, thesensationalizingofheadlinesandcontent,hasbeenanissuesincethe dawnoftheinternet,andhousingnewsisnotimmunetoit.”
Unfortunately,wheninformationinthemediaisn’tclear,itcangeneratealotoffearand uncertaintyinthemarket.AsJasonLewris,Co-FounderandChiefDataOfficerat Parcl,says:
“Intheabsenceoftrustworthy,up-to-dateinformation,realestatedecisionsare increasinglybeingdrivenbyfear,uncertainty,anddoubt.”
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Butitdoesn’thavetobethatway.Buying ahomeisabigdecision,anditshouldbe oneyoufeelconfidentmaking.Youcan leanonanexperttohelpyouseparate factfromfictionandgettheanswers youneed.
Therightagentcanhelpyou understandwhat’shappeningatthe nationalandlocallevels.
Plus,theycandebunktheheadlines usingdatayoucantrust.Expertshaveindepthknowledgeoftheindustryandcan providecontext,soyouknowhowcurrent trendscomparetothenormalebbsand flowsintheindustry,historicaldata,and more.
Then,inordertoensureyouunderstand everythingcompletely,anagentcan informyouwhetheryourlocalareais followingthenationaltrend,orifthey’re noticingsomethingdistinctinyourmarket. Together,youcanuseallthatinformation tomakethebestpossibledecision.
Afterall,makingamoveisapotentially life-changingmilestone.Itshouldbe somethingyoufeelreadyforandexcited about.Andthat’swhereatrustedguide comesin.
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Ifyouwanttogetthebestadvice andstayupdatedonwhat's happeninginthehousingmarket, let'sconnect.
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“Abuyer’sagentwillhaveyourbackin negotiationsandcanhelpyoumakean appropriatelycompetitiveofferonahome.
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-Bankrate
FALL2023EDITION DavidGoldberg NMLS#728872 VicePresidentofMortgageLending MutualofOmahaMortgage dgoldberg@mutualmortgage.com www.GoldbergMortgage.com (866)837-8677 I’msureyouhavequestionsandthoughtsaboutthe realestateprocess.
Let’sChat.
I’dlovetotalkwithyouaboutwhatyou’vereadhereandhelpyou onthepathtobuyingyournewhome.Mycontactinformationis below,andIlookforwardtoworkingwithyou.
