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Mortgage interest rates have risen by more than half of a point since the beginning of the year, and many assume that if mortgage rates rise, home values will fall. History, however, has shown this not to be true.
While rates have been rising, so have home values. Here are the most recent monthly price increases reported in the Home Price Insights Report from CoreLogic:
Not only did prices continue to appreciate, the level of appreciation accelerated over the first quarter. CoreLogic believes that home prices will increase by 5.2% over the next twelve months.
Freddie Mac explained in a recent Insight Report:
“In the current housing market, the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”
If you are thinking about moving up to your dream home, waiting until later this year and hoping for prices to fall may not be a good strategy.
Check out this short video about what your homeowner’s insurance policy may cover (or NOT)!
Every year, the New York Federal Reserve publishes the results of their Survey of Consumer Expectations (SCE). Each survey covers a wide range of topics including inflation, labor market, household finance, credit access and housing.
One of the many questions asked in the housing section of the survey was:
Over three-quarters of respondents under the age of 50 said that they would prefer to own their home, rather than rent. While only 52.6% of those over 50 would prefer to own. The full breakdown can be found in the chart below.
When renters were asked what the average probability of owning a primary residence at some point in their future was, 66.4% of those under 50 believed that they would eventually own their home, while only 23% of those over 50 did.
Many had wondered if young Americans had lost their desire to own a home, but for those renting now, that dream is still alive.
So, you’ve decided to sell your house. You’ve hired a real estate professional to help you through the entire process, and they have asked you what level of access you want to provide to your potential buyers.
There are four elements to a quality listing. At the top of the list is Access, followed by Condition, Financing, and Price. There are many levels of access that you can provide to your agent so that he or she can show your home.
With May proving to be the best month to sell your home, access can make or break your ability to get the price you are looking for, or even sell your house at all.
The famous quote by Walt Whitman, “A man is not a whole and complete man, unless he owns a house and the ground it stands on,” can be used to describe homeownership in America today. The Census revealed that the percentage of homeowners in America has been steadily climbing back up since hitting a 50-year low in 2016. The homeownership rate in the first quarter of 2018 was 64.2%, higher than last year’s 63.6%.
Chief Economist, Dr. Ralph McLaughlin, in his VUE Blog gave these new homeownership numbers some context:
“The trend is clear: the homeownership rate has been ticking up for five consecutive quarters, and the number of new renter households has fallen for four consecutive quarters. Owner-occupied households grew by 1.345 million from a year ago, while the number of renters actually fell by 286,000 households.
The fact that we now have four consecutive quarters where owner households increased while renter households fell is a strong sign households are making a switch from renting to buying. This is a trend that multifamily builders, investors, and landlords should take note of.”
In a separate article comparing the rental population in America to the homeowner population, Realtor.com also concluded that the gap is now shrinking:
“The U.S. added 1.3 million owner households over the last year and lost 286,000 renter households, the fourth consecutive quarter in which the number of renter households declined from the same quarter a year earlier. That could pose challenges for apartment landlords, who are bracing this year for one of the largest infusions of new rental supply in three decades.”
America’s belief in homeownership was also evidenced in a survey conducted by Pew Research. They asked consumers “How important is homeownership to achieving the American Dream?”
Homeownership has been, is, and always will be a crucial part of the American Dream.
Every year, Gallup surveys Americans to determine their choice for the best long-term investment. Respondents are given a choice between real estate, stocks/mutual funds, gold, savings accounts/CDs, or bonds.
This year’s results showed that 34% of Americans chose real estate, followed by stocks at 26%. The full results are shown in the chart below.
The study makes it a point to draw attention to the contrast in the sentiment over the last five years compared to that of 2011-2012, when gold took the top slot with 34% of the votes. Real estate and stocks took second and third place, respectively, while still in recovery from the Great Recession.
As the real estate market has recovered, so has the belief of the American people in the stability of housing as a long-term investment.
So you made an offer, it was accepted, and now your next task is to have the home inspected prior to closing. Oftentimes, agents make your offer contingent on a clean home inspection.
This contingency allows you to renegotiate the price you paid for the home, ask the sellers to cover repairs, or even, in some cases, walk away. Your agent can advise you on the best course of action once the report is filed.
Your agent will most likely have a short list of inspectors that they have worked with in the past that they can recommend to you. HGTV recommends that you consider the following 5 areas when choosing the right home inspector for you:
Ask your inspector if it’s okay for you to tag along during the inspection, that way they can point out anything that should be addressed or fixed.
Don’t be surprised to see your inspector climbing on the roof or crawling around in the attic and on the floors. The job of the inspector is to protect your investment and find any issues with the home, including but not limited to: the roof, plumbing, electrical components, appliances, heating & air conditioning systems, ventilation, windows, the fireplace and chimney, the foundation, and so much more!
They say ‘ignorance is bliss,’ but not when investing your hard-earned money into a home of your own. Work with a professional who you can trust to give you the most information possible about your new home so that you can make the most educated decision about your purchase.