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Friday, December 30, 2022 • B3
THE GARDEN ISLAND
HOUSING MARKET CONSIDERATIONS This could land you without a home for a short period of time between closings. Plan for a scenario where you don’t get the cash or the dates needed from your sale.
Rachael Westgate WEALTH OF GEEKS
The winds have turned on the U.S. housing market. Sellers listed 24 percent fewer homes in October compared with 2021, according to data from Zillow. Fewer people are buying houses though, sales dropping 17 percent below the pre-pandemic estimates in 2019. After months of weathering high prices and endless bidding wars, weary buyers may find reprieve in the incremental price decline. But lower prices may not mean an easier ride. House hunters should keep some considerations in mind. Expect higher monthly payments Yes, although prices aren’t crashing, they are declining, but interest and subsequent mortgage rates are still high. Even though the house you may be considering could be cheaper than it was six months ago, your monthly payments may be higher. In order to make an accurate budget for your next home, consider getting preapproved with a mortgage lender, so you know just how much your expected rate is and what you qualify for. Be prepared to wait Due to the high rates and low inventory, you may have a hard time finding the home you originally envisioned in your new budget.
GENE J. PUSKAR / ASSOCIATED PRESS FILE
A new housing development in Middlesex Township, Pa., on Oct. 12, 2022. Not feeling rushed or pressured to purchase quickly will help you save money by spending wisely. It will also help you stay sane as you shop.
If you have the budget and purchasing real estate is the right choice for you, then looking for the right home instead of the perfect time is your best choice.
portfolio instead of money in a landlord’s pocket. Have an interim plan
Some buyers in today’s market are in a position where they need to sell their Don’t try to time the Play the long game current home in order to market purchase another. Just as Owning real estate is a You’ve heard it once, and long-term play. If you’re pur- you have to be patient for the right home as a buyer, you’ll hear it again: the odds chasing in the current marare against you when you try ket, you’ll benefit from living you may have to wait a while for any buyers to take you to time the real estate marin that house or holding on to that investment property up on your current listing. ket. Buyers will negotiate in for a long time. The market is Yes, prices are on their not well-equipped for short- this market, which means way down. Yes, they could term purchases at this time. you may not get what you continue on this downward want or need in order to Not convinced? Hometrajectory for several months. In fact, economists owners in the U.S. have a me- complete your purchase on the other end. at Wells Fargo predict that dian net worth of 40 times You may also find that you they may stay low until 2024. that of renters. aren’t able to get the closing But you’ll never be able to You are on the path to time the market to perfecbuilding wealth, and buying dates you want on both ends of your purchase and sale. will mean equity in your tion.
Expand search radius
You may have your heart set on a particular neighborhood, but despite the slow decline, prices are still out of reach in a number of sought-after areas. Know your hidden costs Consider expanding your Inflation hasn’t been on search radius to include upthe headlines of every fiand-coming neighborhoods. nance article for the last year Remember, real estate is a for no reason. Prices are ris- long-term investment. Seting across the board - for ev- ting down roots in an area that is benefiting from develerything. The costs you budgeted for things like utili- opment now may reap beneties, services, inspections, fits in the future. and repairs six months ago If you’re willing to extend are likely no longer accurate. beyond nearby neighborRevise your budget to rehoods, why not consider one of the cities in the U.S. that flect the inflated hidden costs associated with buying has experienced a more suba house, not just the mortstantial price drop than the average? According to Zilgage. low, month-over-month Boost your credit score home prices dropped subMortgage rates have more stantially in September in than doubled since the bePhoenix (2.3 percent), Las ginning of 2022. According to Vegas (1.9 percent), and AusBlack Night, a mortgage data tin (1 percent). company, the monthly principal and interest payment on Don’t get discouraged Purchasing a home in tothe median-priced home is up 73 percent from last year. day’s real estate market is Work to improve your challenging but not impossicredit score to lock in the ble. With prices on a steady best rate possible. Higher decline and inflation data scores allow you to qualify showing promising trends, for lower rates, which means buyers may be in luck. There more savings on your is much to consider when monthly payments. thinking of opening your There are a few things you pocketbook, but buyers will can do to improve your be well-equipped to shop credit score today: around in today’s housing • Pay down debts. market with these tips in • Fix any errors on your mind. credit report. ••• • Request a higher credit This article was produced by limit. Wealthy Living and syndi• Avoid late payments. cated by Wealth of Geeks.
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Apply online www.kauaicreditunion.org Average mortgage rates rise after 6 weeks of declines ASSOCIATED PRESS
The average long-term U.S. mortgage rate rose this week after falling for six straight weeks, adding to the challenges potential homebuyers face amid higher home prices and a limited supply of available houses. Mortgage buyer Freddie Mac re* APR=Annual Percentage Rate. Federally insured by NCUA. Advertised rate based ported Thursday that the average on credit on the benchmark 30-year rate in-scores of 750+ and a 12-month lending period. Rates are subject to change creased to 6.42 percent from 6.27 percent last week. That is more than double the year-ago average rate of 3.11 percent. The long-term rate reached 7.08 percent in late October and again in early November as the Federal Reserve has continued to crank up its key lending rate this year in an effort to cool the economy and tame inflation. The big increase in mortgage rates has torpedoed the housing market, with sales of existing homes falling for 10 straight months to the lowest level in more than a decade. While home prices are now dropping as demand has declined, they are still nearly 11 percent higher than a year ago. Higher prices and a doubling of mortgage * APR=Annual Percentage Rate. Federally insured by NCUA. Advertised rate based rates have made homebuying on credit scores of 750+ and a 12-month lending period. Rates are subject to change much less affordable and a much more daunting prospect for many people. George Ratiu, senior economist at realtor.com, calculates that the monthly payment for a median-priced home is now about $2,100, before taxes and insurance, up more than 60 percent from a year ago. The median is * APR=Annual Percentage Rate. Federally insured by NCUA. Advertised rate based halfway between the highest and on credit scores of 750+ and a 12-month lending period. Rates are subject to change lowest figures.
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