A Healthier Home Market Ahead

Experts are predicting that the housing market will slow down in 2019. But, that’s not such a bad thing. A slower market is more stable and offers advantages for both buyers and sellers.

Slowing Market Good for Both Buyers and Sellers

Experts are predicting that the housing market will slow down in 2019. But, that’s not such a bad thing. A slower market is more stable and offers advantages for both buyers and sellers.

The 30-year fixed-rate mortgage averaged 4.45% in mid-January 2019, according to Freddie Mac. While rates were nearly half a point higher than they were a year ago, they’ve since pulled back, making homes a little more affordable for homebuyers heading into spring.

Existing home sales in December 2018 were the lowest since November 2015, more than 10% lower than year-ago levels, reflecting sensitivity to rising interest rates and prices, according to The National Association of REALTORS. NAR chief chief economist Lawrence Yun explained that softer December sales reflected homes under contract at higher mortgage interest rates.

NAR also reported that the median sales price was $253,600, 2.9% higher than a year ago. While gains have been higher in previous years, prices are still rising – a benefit to home sellers.

Realtor.com economist Danielle Hale told Forbes.com that 2019 will bring less competition for homebuyers as the inventory of homes increases on the market. The Realtor.com forecast for 2019 is a 2% decline in home sales volume and a 2.2% rise in home prices from 2018.

These statistics are national averages, and market conditions will definitely vary here in the DFW Metro area. The Indigo Skye Group can share important local data with you that will improve your ability to buy or sell a home. Contact us today to learn about your options!

Related Article: Real Estate Is Transforming and DFW is Leading the Way

Organization for the Disorganized

If you’ve heard of Western Minimalism or Japanese KonMari, you know that these are principles that promote happiness through living with fewer possessions and eliminating clutter. These intentional lifestyles allow only items that make you happy and are useful to live in your home. By eliminating clutter, or things that don’t bring you joy, you’ll experience less stress and have more time and money to spend.

Organization for the Disorganized

The applications of “less is more” to home ownership and home selling are obvious. With less clutter, your home will be cozier, easier to navigate, show better to homebuyers, easier to keep straight, and easier to pack up when you sell.

The most disorganized areas in your home are typically closets, countertops and drawers. Here are a few tips to make decluttering faster and easier:

  1. Start small, one closet or drawer at a time.
  2. Assign a home for every item in the appropriate room.
  3. Organize so that you can see at a glance what is available in every storage space, from kitchen cabinets to dresser drawers.
  4. Fold sweaters and socks vertically so you can see every item.
  5. Use marked containers for small, miscellaneous or boxed items.
  6. Keep only beautiful, favorite or currently useful items.
  7. Don’t let guilt force you to keep anything you don’t want, such as gifts or expensive items you don’t like. Instead, offer these items to people you know or donate them.
  8. Remove donations and discards from the house the same day.

Related article: Buying a House this Year? Here is the 1st Step.

Do 46 Million Millennials Know They Are Mortgage Ready?

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”, meaning they meet the qualifications to be approved for a mortgage today!

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”meaning they meet the qualifications to be approved for a mortgage today!

  • a FICO Score ≥ 620
  • a Back-End Debt to Income Ratio ≤ 25%
  • no Foreclosures or Bankruptcies in the last 7 years
  • no severe delinquencies in 1 year

Rob Chrane, CEO of Down Payment Resource, commented on the findings of the report,

“We now know there are millions of buyers with the income & credit necessary to qualify to buy a home. The biggest question is:

Do they know it? …Unfortunately, many renters don’t investigate homeownership simply because they don’t believe it’s an option.”

The good news is that more and more millennials are realizing that they can afford a home now. Even so, more can be done to increase awareness of low down payment programs to attract even more of this generation.

New data from realtor.com shows that in December, millennials accounted for 42% of all new home loans originated in the month. This is more than any other generation.

Bottom Line

If you are one of the many millennials who may be “Mortgage Ready” but are unsure what your next steps should be, let’s get together to help guide you on your path to homeownership!

Homeownership is a Cornerstone of the American Dream

Homeownership is a Cornerstone of the American Dream

“The rumors of my death are greatly exaggerated.”

The famous quote attributed to Mark Twain can apply to homeownership in the United States today. During the housing bubble of the last decade, the homeownership rate soared to over sixty-nine percent. After the crash, that percentage continued to fall for the next ten years.

That led to speculation that homeownership was no longer seen as a major component of the American Dream. That belief became so widespread that the term “renters’ society” began to be used by some to define American consumers.

However, the latest report by the Census Bureau on homeownership shows that over the last two years, the percentage of homeowners has increased in each of the last eight quarters.

Homeownership is a Cornerstone of the American Dream |MyKCM

Going forward…

It appears the homeownership rate will continue to increase.

The 2019 Aspiring Home Buyers Profile recently released by the National Association of Realtors revealed that 84% of non-owners want to own a home in the future. That percentage increased from 73% earlier last year.

Bottom Line

In the United States, the concept of homeownership as part of the American Dream is very much alive and well. Indigo Skye Group with Compass Realty is dedicated to helping you find your place in the American Dream – contact us to learn about your options!

 

Related Article: Buying a home young is the key to building wealth

Economic Slowdown Won’t Crush Real Estate This Time

Last week, the National Association for Business Economics released their February 2019 Economic Policy Survey. The survey revealed that a majority of the panel believe an economic slowdown is in the near future:

“While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.”

Their findings coincide with three previous surveys calling for a slowdown sometime in the next two years:

  1. The Pulsenomics Survey of Market Analysts
  2. The Wall Street Journal Survey of Economists
  3. The Duke University Survey of American CFOs

That raises the question: Will the real estate market be impacted like it was during the last recession?

A recession does not equal a housing crisis. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, prices fell dramatically because the housing collapse caused the recession. However, if we look at the previous four recessions, we can see that home values weren’t negatively impacted:

  • January 1980 to July 1980: Home values rose 4.5%
  • July 1981 to November 1982: Home values rose 1.9%
  • July 1990 to March 1991: Home values fell less than 1%
  • March 2001 to November 2001: Home values rose 4.8%

Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained:

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

The housing market is just “normalizing”. Inventory is starting to increase and home prices are finally stabilizing. This is a good thing for both buyers and sellers as we move forward.

Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. As renowned financial analyst, Morgan Housel, recently tweeted:

“An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but, statistically, highly unlikely. Could be over before you realized it began.”

 

Related Article: Dallas Real Estate is Experiencing a Cool-Down