When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point. 

1. The Current Mortgage Rate on Existing Mortgages

First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (FHFA), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):

Now, there’s a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they downsize, with today’s higher mortgage rates, it could cost more.

Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.

2. The Amount of Homeowner Equity

Second, Americans are sitting on tremendous equity right now. According to the Census and ATTOM, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):

In the industry, the term for this is equity rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.

But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.

Bottom Line

We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.

With all the headlines circulating about home prices and rising mortgage rates, you may wonder if it still makes sense to invest in homeownership right now. A recent poll from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11^th consecutive year, consistently beating other investment types like gold, stocks, and bonds (see graph below):

If you’re thinking about purchasing a home, let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision.

Why Do Americans Still Feel So Positive About the Value of Investing in a Home?

Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes:

“. . . homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”

That’s because owning a home grows your net worth over time as your home appreciates in value and as you pay down your mortgage. And, since building that wealth takes time, it may make sense to start as soon as you can. If you wait to buy and keep renting, you’ll miss out on those monthly housing payments going toward your home equity.

Bottom Line

Buying a home is a powerful decision. So, it’s no wonder so many people view real estate as the best long-term investment. If you’re ready to start on your own journey toward homeownership, let’s connect today.

Did the news stories about big drops in home prices make you worry about a crash in the housing market? 😮🤔

The most recent data paints a totally different and far more encouraging picture. 📈

Even though home prices vary from market to market, on a national level, the worst price drops are over, and home prices have been slowly going back up in recent months. 👏

Share this post to someone who might need this. 😊

A 𝙧𝙚𝙖𝙡 𝙚𝙨𝙩𝙖𝙩𝙚 𝙥𝙪𝙧𝙘𝙝𝙖𝙨𝙚 𝙖𝙜𝙧𝙚𝙚𝙢𝙚𝙣𝙩 is also known as a residential purchase agreement, a home sales contract, or a contract to purchase real estate. 📃

What questions do you have?  Write the comments! If you need more help, contact us and see what our team can do for you! 📞📩👍🔑

The Impact of Inflation on Mortgage Rates

If you’re reading headlines about inflation or mortgage rates, you may see something about the recent decision from the Federal Reserve (the Fed). But what does it mean for you, the housing market, and your plans to buy a home? Here’s what you need to know.

Inflation and the Housing Market

While the Fed’s working hard to lower inflation, the latest data shows that, while the number has improved some, the inflation rate is still higher than the target (2%). That played a role in the Fed's decision to raise the Federal Funds Rate last week. As Bankrate explains:

“Keeping its inflation-fighting streak alive, the Federal Reserve has raised interest rates for the 10th time in 10 meetings . . . The hikes aimed to cool an economy that was on fire after rebounding from the coronavirus recession of 2020.” 

While the Fed’s actions don’t directly dictate what happens with mortgage rates, their decisions do have an impact and contributed to the intentional cooldown in the housing market last year. 

How This Impacts You 

During times of high inflation, your everyday expenses go up. That means you’ve likely felt the pinch at the gas pump and in the grocery store. By raising the Federal Funds Rate, the Fed is actively trying to lower inflation. If the Fed is successful, it could also ultimately lead to lower mortgage rates and better homebuying affordability for you. That’s because when inflation is high, mortgage rates tend to be high. But, as inflation cools, experts say mortgage rates will likely fall.

Where Experts Think Mortgage Rates and Inflation Will Go from Here

Moving forward, both inflation and mortgage rates will continue to impact the housing market. And as Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“Mortgage rates are likely to descend lower later in the year as the consumer price inflation calms down . . .” 

Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), explains: 

“We continue to expect that mortgage rates will drift down over the course of the year as the economy slows . . .”

While there’s no way to say with certainty where mortgage rates will go from here, the experts think mortgage rates will trend down this year if inflation comes down too. To stay informed on the latest insights, 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 and how it could impact your homeownership plans.

Bottom Line

Don’t let headlines about the latest decision from the Fed confuse you. Where mortgage rates go from here depends on what happens with inflation. If inflation cools, mortgage rates should tick down as a result. Let’s connect so you have expert insights on housing market changes and what they mean for you.

Regardless of what kind of gifts you give her, all that matters to her is the love and appreciation that comes with it.💝

Here are our top 5 trendy gift ideas with flowers and sweets of course!

PAPERCLIP CHAIN NECKLACE

by Madewell

Layering your jewelry is undeniably trendy. The paperclip necklace from Madewell is a great addition to your jewelry collection, whether you're a fan of combining necklaces or prefer to wear your jewelry solo.

The length of the necklace can be altered to your preference thanks to the included extension chain, and the gold plating on the brass will keep it looking shiny for years to come.

REVERSIBLE FAUX LEATHER TOTE AND WRISTLET

Courtesy of Nordstrom

This fashionable tote bag is large enough to carry a laptop computer and notebook, showing you care about the busy mother in your life. (and even on-the-go workout clothes).

The bag's reversibility allows for endless stylistic possibilities, and the included wristlet makes it easy to keep your cards, keys, and notes in order.

NATURAL SILK PILLOWCASE

(50% OFF)

Courtesy of Amazon

Treat the queen in your life to a royal slumber fit for a majestic ruler. Sleeping on a silk pillow set is the closest thing to feeling like royalty without actually having a crown.

Who needs expensive anti-aging creams when you can just snuggle up with a silk blanket?

It's like a spa treatment while you sleep. Well, well, well, looks like you can now gift luxury without breaking the bank! This set is 25% off, so you can snag it for a mere $20.

LANDSDOWNUNDER CASHMERE THROW

Courteasy of Amazon

Once you've cuddled up under a cashmere throw, particularly one made by the Italian-owned Landdownunder, there's no turning back.

The pure cashmere and lambswool basket weave throw is among Oprah's favorite items for 2021.

With this Amazon flash sale, you can save almost $50.

IPAD MINI

Courtesy of Apple

If your mom has been complaining about the size of her iPhone screen but has been hesitant to buy a traditional tablet because of its bulk, the iPad Mini may be the solution.

Apple's newest tablet, released last year, is tiny enough to fit in the palm of your hand, has a brand-new screen design, and is equipped with a powerful A15 bionic chip and lightning-fast 5G.

More at Variety.com

What's your favorite go-to store for buying gift? Share with us below.

Some Highlights

• Not sure if selling your house is the right move today? You should know there are a number of reasons it still makes sense to sell now.
• Your house will stand out because inventory is low. That’s why the number of offers on recently sold homes is on the rise. And most homeowners have a lot of equity that can fuel a move.
• If you’re thinking about selling your house, let’s connect to discuss if now may be the time to move.

The average number of offers on previously sold homes is increasing, which is good news for sellers in the current property market.

The fact that there are still more people trying to buy than there are available homes is one factor.

If you're prepared to relocate, DM us so that we can collaborate to get your home listed and in front of prospective buyers.

What Are the Experts Saying About the Spring Housing Market?

The housing market’s been going through a lot of change lately, and there’s been uncertainty surrounding what will happen this spring. You may be wondering if more homes will go on the market, what’s next with home prices and mortgage rates, or what the best advice is for someone in your position right now. Here’s what industry experts are saying right now about the spring housing market and what it means for you:

Selma Hepp, Chief Economist, CoreLogic:

“We see more competition among buyers . . . Housing supply also tends to grow during the spring months. And this is also the time of year when relatively more migration happens, as people graduate and move elsewhere looking for jobs.”

Greg McBride, Chief Financial Analyst, Bankrate:

“I don’t expect big moves in prices in the span of a month, but like the flower buds of spring, the housing market is showing signs of improvement. A pick up in activity with inventory still low does bode well for home prices.”

Rick Sharga, Founder and CEO, CJ Patrick Company:

“If you can find a home you love and can afford at today’s prices, don’t wait. Home prices in most of the country are unlikely to crash, and mortgage rates will only come down very gradually if they decline at all this year.”

Jeff Tucker, Senior Economist, Zillow:

“The market is still much friendlier this spring for buyers who can overcome affordability hurdles, but buyers are going to see more competition than they might expect because there are not many homes on the market to go around. New listings are increasing, which they almost always do this time of year, but not nearly as quickly as usual.”

Bottom Line

If you’re thinking about selling your house, this spring’s a great time to do so while inventory is still so low. And if you’re in a good position to buy, lean on your team of expert advisors for the best advice. Whatever your plans, let’s connect to make sure you’re able to navigate the spring housing market with confidence.