Tag Archives: #marisennottplus #todayrealestate

Questions Homebuyers Should Be Asking Right Now

The increase in interest rates has started to slow the overheated housing market as potential monthly mortgage payments have pushed — at least temporarily — some buyers to the sidelines. This is leaving some people, who want to purchase a home or sell their current one, wondering if now is really the right time.

If this sounds like you, here are two questions you should be asking yourself.

1. Where Do I Think Home Prices Are Heading?

There are two places to turn for answers to this question. If you look at what experts are projecting for home prices in 2023, they’re forecasting home price appreciation around 2%. While it’s true that a few are calling for depreciation, most are calling for appreciation in home values over the next year.

The second spot to turn to for information is the Home Price Expectation Survey from Pulsenomics – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists. According to the latest release, the experts surveyed are also calling for home price appreciation for the next several years (see graph below):

Two Questions Every Homebuyer Should Ask Themselves Right Now | MyKCM

2. Where Do I Think Interest Rates Are Heading?

Most experts see mortgage rates rising over the next several months. According to Mark Fleming, Chief Economist at First American: “While mortgage rates are expected to continue to drift higher over the coming months, much of the rapid increase in rates is likely behind us.”

To date, we’ve seen mortgage interest rates generate head-line grabbing increases only to inch back with little or no fanfare. It’s important to remember that mortgage rates remain lower than they have in years, and while they won’t return to historical lows, rates also won’t spike to the historic highs of the late 90s.

Buyers should keep in close contact with their lenders to stay up-to-date on what they can afford.

If you’re thinking about buying a home, asking yourself about prices and mortgage rates will help you make a powerful and confident decision. The alternative is renting, but they’re also increasing and are often higher than what your mortgage could be. That may mean buying a home makes more sense. And don’t forget that when you rent, you’re really just paying your landlord’s mortgage. So, you might as well pay your own.

Questions? We’re happy to sit down with you and review your options. We can also put you in touch with qualified lenders, who can discuss with you financial options. It’s important that you speak with experts in order to make an informed decision and not your Mother’s cousin Gretchen, who sold a few houses 20 years ago.

So, let’s connect at 508-360-5664 or msennott@todayrealestate.com. Let’s talk soon…

Mari and Hank

But Where Will I Go?

That’s a question we frequently hear from homeowners who are sitting on the fence about selling.

The answer: wherever you want.

That’s because today’s market is undergoing a shift, and the supply of homes for sale is slowly increasing as a result. That means you may have a better chance of finding a home that will meet your current need, whether upsizing, downsizing or moving to that “someday” community. Here are some options to consider.

Buying an Existing Home Can Give You That Lived-in Charm

According to the National Association of Realtors (NAR), the supply of existing homes nationally has steadily increased since the beginning of the year. The graph below indicates inventory levels are rising, and that’s largely due to more homes coming onto the market and the pace of sales slowing:

Wondering Where You’ll Move if You Sell Your House Today? | MyKCM

As the graph shows, if you’re looking for a home with lived-in charm, supply is rising, and that’s great news for you.

There are several benefits to buying an existing home. Many buyers want to purchase a home with history, and the character of older houses is hard to reproduce. Existing homes can often be part of an established neighborhood featuring mature landscaping that can give you additional privacy and boost your curb appeal.

Plus, timing can be a consideration as well. With an existing home, you can move in based on the timeline you agree to with the sellers, rather than building a new home and waiting for construction to finish. This is something to keep in mind, especially if you need to move sooner rather than later.

Just remember, while more sellers are listing their homes, supply is still low overall. That means you’ll have more options to choose from as you search for your next home, but you’ll still need to be prepared for a fast-moving market.

Purchasing a Newly Built or Under Construction Home Means Brand New Everything

Census data shows there’s an increasing number of new homes available for sale. It includes homes that are under construction, soon to be completed, and fully built. As the graph below highlights, the supply of new homes for sale has also grown this year:

Wondering Where You’ll Move if You Sell Your House Today? | MyKCM

When building a new home, you can create your perfect living space and customize it to your lifestyle. That could mean everything from requesting energy efficient options to specific design features. Plus, you’ll have the benefit of all new appliances, windows, roofing, and more. These can all help lower your energy costs, which can add up to significant savings over time.

The lower maintenance that comes with a newer home is another great advantage. When you have a new home, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. And with new construction, you’ll also have warranty options that may cover portions of your investment for the first few years.

But, keep in mind purchasing a new home could mean waiting a considerable amount of time before you can move. That’s an important factor when making your decision and depends on your personal time line.

Anecdotally, the number of homes available for sale on Cape appears to be increasing based on the time spent at our office and company-wide meetings discussing new listings. We’re also receiving more emails announcing price reduction announcements. Sometimes they involve properties where homeowners waited too long to sell and, as a result, the sale price that a neighbor received six months ago — that the seller wants today — isn’t realistic.

So, is it finally time to make your move? We put our Sandwich home under contract at the end of April and last month moved to an area in Mashpee that we had been thinking about for years. You can do it, too!. (And we received no special consideration from anyone, because we’re realtors.)

We’re happy to answer your questions about the current housing market. Let’s connect at 508-360-5664 or msennott@todayrealestate.com. We’ll provide you with the most up-to-date marketing data, as well as our thoughts based on our experience as sellers and buyers. Talk soon…

Please continue to be careful in the warm weather and pay attention to the kids and adults, who are not familiar with water. Thanks…

Mari and Hank

Mortgage Rates Pushing Buyers Off the Fence

If you’re thinking about buying a home, you’re no doubt aware that mortgage rates are rising and you’re probably wondering what that means for you. Since mortgage rates have increased over two percentage points this year, it’s natural to think about how this will impact your homeownership plans.

Buyers are reacting in one of two ways: they’re either making the decision to buy now before rates climb higher or they’re waiting it out in hopes rates will fall. Here’s some context that can help you understand why so many buyers are making their move and taking action instead of waiting.

How the Current Mortgage Rate Compares to Historical Data

One factor that could help you make your decision to buy now is how today’s mortgage rates compare to historical data. While higher than the average 30-year fixed rate in recent years, the latest rates are still comparatively low when you look at the bigger picture of where rates have been since 1971 (see graph below):

Why Rising Mortgage Rates Push Buyers off the Fence | MyKCM

If you’re deciding whether to buy now or wait, this is important context to have. Today’s mortgage rate still gives you a window of opportunity to lock in a number that’s significantly lower than decades past.

Not every lender is offering the same rate right now. The differences can be 1% or more. So, be sure to compare. We work with several reputable lenders and are happy to pass along their contact information.

We remember when interest rates were at their highest. We had a rate of 14%! But people still bought homes, because they understood that real estate has always been the safest investment and that waiting was, well, just waiting.

A Look Ahead: What Happens if Rates Climb Further

The buyers who are springing into action now are motivated to make their move because they know rates have risen steadily this year, and they’re eager to get ahead of any further increases.

Why? When mortgage rates climb, they impact the monthly mortgage payment you’ll have on the home you’re buying. Basically, it’ll likely cost you more to buy if you wait.

Experts say mortgage rates will rise (although more moderately) in the months ahead. Odeta Kushi, Deputy Chief Economist at First Americanexplains: “…ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”

So, if you’re ready and financially able to buy now, it may make more sense to get off the fence and make your purchase sooner rather than later.

That’s what we’ve done. We’ve sold our home where we’ve lived for the past 28 years and are purchasing a ranch style condo. We have an mortgage interest rate that would have been laughed off as fantasy when we were younger.

At the end of the day, there is no perfect advice on when to buy a home. What you should do depends on your goals, your finances, and your personal situation.

Please use this information to make an informed decision about what’s best for you. And let’s connect at 508-360-5664 or msennott@todayrealestate.com. We’re be happy to answer your questions.

Happy Memorial Day. Never forget…

Mari and Hank

It’s Not a Housing Bubble

We hear occasionally from potential buyers or sellers, who say that they’re going to make their move “after the bubble bursts.”

Many of us have memories — usually bad ones — of 2006-2008. Some younger investors are being given advice about what they should do by good old Uncle Harry, who “knows a little something about real estate” and remembers his own bad experience from back then.

Talking head housing experts on your favorite cable news network — who get paid to say controversial things — are also suggesting the worst might be yet to come.

But, here’s why today is not an example of history repeating itself.

The housing market isn’t driven by risky mortgage loans.

3 Charts That Show This Isn’t a Housing Bubble | MyKCM

Back in 2006, nearly everyone could qualify for a loan. The Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers’ Association is an indicator of the availability of mortgage money. The higher the index, the easier it is to obtain a mortgage. The MCAI more than doubled from 2004 (378) to 2006 (869). Today, the index stands at 130.

Homeowners aren’t using their homes as ATMs this time.

During the housing bubble, as prices skyrocketed, people were refinancing their homes and pulling out large sums of cash. As prices began to fall, that caused many to spiral into a negative equity situation (where their mortgage was higher than the value of the house).

Today, homeowners are letting their equity build. Tappable equity is the amount available for homeowners to access before hitting a maximum 80% combined loan-to-value ratio (thus still leaving them with at least 20% equity). In 2006, that number was $4.6 billion. Today, that number stands at over $8 billion.

3 Charts That Show This Isn’t a Housing Bubble | MyKCM

Yet, the percentage of cash-out refinances (where the homeowner takes out at least 5% more than their original mortgage amount) is half of what it was in 2006.

This time, it’s simply a matter of supply and demand.

FOMO (the Fear Of Missing Out) dominated the housing market leading up to the 2006 housing bubble and drove up buyer demand. Back then, housing supply more than kept up as many homeowners put their houses on the market, as evidenced by the over seven months’ supply of existing housing inventory available for sale in 2006. Today, that number is barely two months nation-wide.

Builders also overbuilt during the bubble but pulled back significantly over the next decade.

To put it simply, there’s simply not enough homes to keep up with current demand.

On Cape Cod, despite a general trend towards an increase in the amount of single family homes coming onto the market, June 2021 saw the lowest number of new listings for a June in 18 years.

Condominium sales are on the rise

However, condominium sales are showing signs of real life. Year to date, pending sales are up 31%; closed sales are up 26%, and median sales price is up 15%.  These strong numbers are probably fueled by the lack of single-family inventory and rising single-family home prices as well.

BTW…Mari was quoted last week in an article in Banker and Tradesman, a leading publication for the financial services and real estate professions. The article is linked here.

As always, we’re available to assist you in reviewing your options. Please contact us at 508-568-8191 or msennott@todayrealestate.com. We’re happy to help.

Enjoy today’s sun…

Mari and Hank