Monthly Archives: October 2021

Homes Are Not “Unaffordable”

It’s impossible to research the subject of buying a home without coming across a headline declaring that the drop in home affordability is a cris

However, when you add context to the most recent affordability statistics, you soon realize that, though homes are less affordable than they have been over the last few years, they are actually more affordable than they historically have been.

Black Knight, a premier provider of data and analytics for the mortgage industry, just released their latest Monthly Mortgage Monitor which includes a new analysis of the affordability situation. The big headline from the report: the payment to income ratio standard that has long been used to determine affordability has actually dropped!

Important Distinction: Homes Are Less Affordable, Not Unaffordable | MyKCM

Today’s payment-to-income ratio is more affordable than the average over the last 25 years. Given that context, we can see that today’s homebuyers still have the same ability to be homeowners as their parents did 20 years ago.

This confirms the recent analylsis of ATTOM Data resources where Todd Teta, Chief Product and Technology Officer, said that the typical median-priced home around the U.S. remains affordable despite prices going through the roof.

“Super-low interest rates and rising pay continue to be the main reasons why,” he says.

So, while it’s true that it’s less affordable to buy a home today than it has been the last few years, it is more affordable to buy today than the average over the last 25 years. Homes are less affordable, but they’re not unaffordable.

That’s an important distinction.


What are your questions about the housing market?

Mari has started a “30 Questions; 30 Days” project to provide answers.

Please visit our Facebook page, Mari Sennott Plus, to see what we’ve posted and send along your questions.

Have a great week…

Mari and Hank

The Big Question: Should You Renovate or Move?

The last 18 months changed what many buyers are looking for in a home. Recently, the American Institute of Architects released their AIA Home Design Trends Survey results for Q3 2021. The survey reveals the following:

  • 70% of respondents want more outdoor living space
  • 69% of respondents want a home office (48% wanted multiple offices)
  • 46% of respondents want a multi-function room/flexible space
  • 42% of respondents want an au pair/in-law suite
  • 39% of respondents want an exercise room/yoga space

If you’re a homeowner who wants to add any of the above, you have two options: renovate your current house or buy a home that already has the spaces you desire. The decision you make could be determined by factors like:

  1. A possible desire to relocate
  2. The difference in the cost of a renovation versus a purchase
  3. Finding an existing home or designing a new home that has exactly what you want (versus trying to restructure the layout of your current house)

In either case, you’ll need access to capital for either the funds for the renovation or the down payment your next home would require. The great news is that the money you need probably already exists in your current home in the form of equity.

Home Equity Is Skyrocketing

The Big Question: Should You Renovate or Move? | MyKCM

The record-setting increases in home prices over the last two years dramatically improved homeowners’ equity. The graph above uses data from CoreLogic to show the average home equity gain in the first quarter of the last nine years.

As a homeowner you have options. However, waiting to make your decision may increase the cost of tapping that equity.

If you decide to renovate, you’ll need to refinance (or take out an equity loan) to access the equity. If you decide to move instead and use your equity as a down payment, you’ll still need to mortgage the remaining difference between the down payment and the cost of your next home.

Mortgage rates are forecast to increase over the next year. Waiting to leverage your equity will probably mean you’ll pay more to do so. According to the latest data from the Federal Housing Finance Agency (FHFA), almost 57% of current mortgage holders have a mortgage rate of 4% or below. If you’re one of those homeowners, you can keep your mortgage rate under 4% by doing it now. If you’re one of the 43% of homeowners with a mortgage rate over 4%, you may be able to do a cash-out refinance or buy a more expensive home without significantly increasing your monthly payment.

If you’re ready to either redesign your current house or find an existing or newly constructed home that has everything you want, the first thing you need to do is determine how much equity you have in your current home. To do that, you’ll need two things:

  1. The current mortgage balance on your home
  2. The current value of your home

You can locate the balance on your monthly mortgage statement. To find the current market value of your house, you could pay several hundreds of dollars for an appraisal, or visit our website at www.makeyourmovewithmari.com/evaluation where you can receive a free report. We’re happy to help.

Have a great week….

Mari and Hank

What Do Supply and Demand Tell Us About Today’s Housing Market?

There’s a well-known economic theory – the law of supply and demand – that explains what’s happening with prices in the current real estate market. Put simply, when demand for an item is high, prices rise. When the supply of the item increases, prices fall. Of course, when demand is very high and supply is very low, prices can rise significantly.

Understanding the impact of both supply and demand can provide answers to a few popular questions about today’s housing market:

  • Why are prices rising?
  • Where are prices headed?
  • What does this mean for homebuyers?

Why Are Prices Rising?

According to the latest Home Price Insights report from CoreLogic, home prices have risen 18.1% since this time last year. But what’s driving the increase?

Recent buyer and seller activity data from the National Association of Realtors (NAR) helps answer that question. When we take NAR’s buyer activity data and compare it to the seller traffic during the same timeframe, we can see buyer demand continues to outpace seller activity by a wide margin. In other words, the demand for homes is significantly greater than the current supply that’s available to buy.

Where Are Prices Headed?

The supply of homes for sale will greatly affect where prices head over the coming months. Many experts forecast prices will continue to increase, but they’ll likely appreciate at a slower rate.

Buyers hoping to purchase the home of their dreams may see this as welcome news. In this case, perspective is important: a slight moderation of home prices does not mean prices will depreciate or fall. Price increases may occur at a slower pace, but experts still expect them to rise.

Five major entities that closely follow the real estate market forecast home prices will continue appreciating through 2022 (see graph below):

What Do Supply and Demand Tell Us About Today’s Housing Market? | MyKCM

What Does This Mean for Homebuyers?

If you’re waiting to enter the market, because you’re expecting prices to drop, you may end up paying more in the long run. Even if price increases occur at a slower rate next year, prices are still projected to rise. That means the home of your dreams will likely cost even more in 2022.

The truth is, high demand and low supply are what’s driving up home prices in today’s Cape Cod housing market. And while prices may increase at a slower pace in the coming months, experts still expect them to rise.


As we mentioned in our previous post, we were in Dallas last week attending Success Summit 2021 sponsored by the Tom Ferry organization. Ferry is the leading real estate coach and trainer in the country. We’ve been participating in individual business coaching and Ferry events for several years.

We have a lot of information to review, but one take away is the lure of discount realtors, who appear to offer sellers lower fees than traditional real estate brokerages. It’s important that sellers hoping to save money look beyond commission and be sure they understand the additional monies that can be charged — like fees per showing and open house or for advertising– which can push final costs to equal or more than a traditional commission.

As always, we’re happy to answer your questions about the housing market. We can connect at 508-568-8191 or msennott@todayrealestate.com.

Have a great week…

Mari and Hank


Two Reasons Why Waiting a Year To Buy Could Cost You

If you’re a renter with a desire to become a homeowner, or a homeowner who’s decided your current house no longer fits your needs, you may be hoping that waiting a year might mean better market conditions to purchase a home.

To determine if you should buy now or wait, you need to ask yourself two simple questions:

  1. What will home prices be like in 2022?
  2. Where will mortgage rates be by the end of 2022?

Let’s shed some light on the answers to both of these questions.

What will home prices be like in 2022?

Three major housing industry entities project continued home price appreciation for 2022. Here are their forecasts:

Using the average of the three projections (6.27%), a home that sells for $350,000 today would be valued at $371,945 by the end of next year. That means, if you delay, it could cost you more. As a prospective buyer, you could pay an additional $21,945 if you wait.

Where will mortgage rates be by the end of 2022?

Today, the 30-year fixed mortgage rate is hovering near historic lows. However, most experts believe rates will rise as the economy continues to recover. Here are the forecasts for the fourth quarter of 2022 by the three major entities mentioned above:

That averages out to 3.7% if you include all three forecasts, and it’s nearly a full percentage point higher than today’s rates. Any increase in mortgage rates will increase your cost.

What does it mean for you if both home values and mortgage rates rise?

You’ll pay more in mortgage payments each month if both variables increase. Let’s assume you purchase a $350,000 home this year with a 30-year fixed-rate loan at 2.86% after making a 10% down payment. According to the mortgage calculator from Smart Asset, your monthly mortgage payment (including principal and interest payments, and estimated home insurance, taxes in your area, and other fees) would be approximately $1,899.

Two Reasons Why Waiting a Year To Buy Could Cost You | MyKCM

That same home could cost $371,945 by the end of 2022, and the mortgage rate could be 3.7% (based on the industry forecasts mentioned above). Your monthly mortgage payment, after putting down 10%, would increase to $2,166.

The difference in your monthly mortgage payment would be $267. That’s $3,204 more per year and $96,120 over the life of the loan.

If you consider that purchasing now will also let you take advantage of the equity you’ll build up over the next calendar year, which is approximately $22,000 for a house with a similar value, then the total net worth increase you could gain from buying this year is over $118,000.

Sound intriguing?? Let’s connect at 508-568-8191 or msennott@todayrealestate.com. Helping our clients make the best decisions for their individual situations has been our full time job for 22 years. We’d be happy to answer your questions.


We’re in Dallas this week attending the Tom Ferry Success Summit 2021. Ferry is the leading real estate coach and trainer in the country and we’ve been involved with his organization for many years. The event has been virtual the last two years, so we’re looking forward to re-connecting with agent friends from around the country and the world, as well as making new contacts. This is a great opportunity to learn about trends and new directions in the housing market from the people directly involved.

We’ll share with you what we learned in upcoming posts.

Have a great week…

Mari and Hank