Thinking About Buying a Home? Ask Yourself These Questions
KCM • January 22, 2024
Thinking About Buying a Home? Ask Yourself These Questions
If you’re thinking of buying a home this year, you’re probably paying closer attention than normal to the housing market. And you’re getting your information from a variety of channels: the news, social media, your real estate agent, conversations with friends and loved ones, the list goes on and on. Most likely, home prices and mortgage rates are coming up a lot.
Here are the top two questions you need to ask yourself as you make your decision, including the data that helps cut through the noise.
1. Where Do I Think Home Prices Are Heading?
One reliable place you can turn to for information on home price forecasts is the Home Price Expectations Survey from Fannie Mae – a survey of over one hundred economists, real estate experts, and investment and market strategists.
According to the most recent release, the experts are projecting home prices will continue to rise at least through 2028 (see the graph below):
So, why does this matter to you? While the percent of appreciation may not be as high as it was in recent years, what’s important to focus on is that this survey says we’ll see prices rise, not fall, for at least the next 5 years.
And home prices rising, even at a more moderate pace, is good news not just for the market, but for you too. It means, by buying now, your home will likely grow in value, and you should gain home equity in the years ahead. But, if you wait, based on these forecasts, the home will only cost you more later on.
2. Where Do I Think Mortgage Rates Are Heading?
Over the past year, mortgage rates spiked up in response to economic uncertainty, inflation, and more. But there’s an encouraging sign for the market and mortgage rates. Inflation is moderating, and here’s why this is such a big deal if you’re looking to buy a home.
When inflation cools, mortgage rates generally fall in response. That’s exactly what we’ve seen in recent weeks. And, now that the Federal Reserve has signaled they’re pausing their Federal Funds Rate increases and may even cut rates in 2024, experts are even more confident we’ll see mortgage rates come down.
Danielle Hale, Chief Economist at Realtor.com, explains:
“. . . mortgage rates will continue to ease in 2024 as inflation improves and Fed rate cuts get closer. . . . a key factor in starting to provide affordability relief to homebuyers.”
As an article from the National Association of Realtors (NAR) says:
“Mortgage rates likely have peaked and are now falling from their recent high of nearly 8%. . . . This likely will improve housing affordability and entice more home buyers to return to the market . . .”
No one can say with absolute certainty where mortgage rates will go from here. But the recent decline and the latest decision from the Federal Reserve to stop their rate increases, signals there’s hope on the horizon. While we may see some volatility here and there, affordability should improve as rates continue to ease.
Bottom Line
If you’re thinking about buying a home, you need to know what’s expected with home prices and mortgage rates. While no one can say for certain where they’ll go, making sure you have the latest information can help you make an informed decision. Let’s connect so you can stay up to date on what’s happening and why this is such good news for you.
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Stay or Sell? How To Make the Right Call as You Age At some point, as you start thinking about the years ahead , this question tends to come up: “Could I stay here long-term… or would it make more sense to move?” It’s not always urgent. It often shows up in small moments, like going up and down the stairs, keeping up with the maintenance, or just thinking about what the next chapter of your life might look like in this home. And for most people, the answer is simple. They want to stay. The USC Leonard Davis School of Gerontology found about 90% of adults over 65 prefer to stay in their homes as they get older (see below): But even if staying feels like the right answer, it’s still worth thinking ahead about what that might actually look like. That’s where the right agent can really help. What You Need To Plan for If You’re Staying in Your Home Aging in place is definitely possible. But it’s better if you have a plan. And here’s why. The home that once worked perfectly may need to change with you over the years. And it’s easier if you can anticipate those expenses. Sometimes that means small updates: like adding grab bars in the shower. Other times, you’ll have to make bigger decisions: like reworking layouts or moving key spaces to the first floor. Some of those changes are going to be simple. Others can be a meaningful investment. And that’s why thinking about it early matters. Not because you need to decide anything right now, but because it gives you time. Time to understand what your home may need. Time to explore your options. Time to find the right contractors. Time to space out the expense of the upgrades. According to ElderLife Financial, here's a rough baseline of what it could cost depending on what needs to be done (see below): And don’t worry. If your heart is really set on staying, but the costs feel like a concern, it helps to know you have options. Depending on your situation, there may be financial assistance programs available, along with tools like home warranties to help manage unexpected costs. Just remember, if you’re thinking about making updates, it’s always worth having a quick conversation before you start. A real estate agent can help you understand which changes tend to make sense for your situation and how they may impact your home’s value based on your local market. When Moving Might Make More Sense But staying isn’t always the best fit for every situation. According to Pegasus Senior Living: “While most seniors hope to age in place, practical considerations sometimes make selling a home the wiser choice.” Sometimes, it comes down to a simple shift: when the home that once made life easier, starts to make it harder. That might look like: Maintenance or yardwork that's starting to feel overwhelming Stairs or layouts that are getting harder to manage day-to-day Or needing more support or care or being too far from loved ones And sometimes, it’s not about necessity at all. It’s about lifestyle. Some homeowners just don’t want to live through major renovations. Others are ready to simplify, downsize , or move somewhere that better fits this next chapter, whether that’s a smaller home, a 55+ community, or a place closer to family. For them, moving simply means making daily life easier. Bottom Line There’s no one-size-fits-all answer here. Some people stay and make updates. Others move to simplify things. Either can be the right choice. The goal isn’t to pick one today. It’s to understand your options early, so when the time comes, you feel confident instead of rushed. And if you ever want a sounding board to think through what the future could look like for you, let’s connect.
Is Late May the Best Time To List Your House? You may have heard April 12-18 was the “best week” to list your house. That’s based on a report from Realtor.com. But now that it’s passed, you may be wondering if you missed your moment. Here's the good news – you didn’t. Because the reality is, there isn’t just one perfect week to sell your house this Spring. There’s a window. And right now, you’re still in it. Your Window To Sell Is Still Wide Open Here’s why. Different organizations run studies like this every year. And they don’t always land on the exact same week. That’s okay. It’s because they're using different research methods and even different definitions of what “best” means. But the fact that the results vary points to a larger trend. While there may be sweet spots, the entire Spring season gives sellers an opportunity to get some of the best conditions (and best sales prices) of the year. And it’s definitely not too late to jump in. Why Listing in Late May Is the Perfect Play According to Zillow, the best time to list your house this year is the last 2 weeks of May. And that’s approaching fast. Based on their analysis, this is the ideal time to do it if you want to make top dollar. Because, in this 2-week window, homes sell for more . Sometimes, quite a bit more. Depending on where you are and the price point in your area, some homeowners may even net tens of thousands of dollars extra in this sweet spot. As Zillow explains: “Why late spring? Buyer demand typically peaks before Memorial Day. Families want to move during the summer and settle in before the new school year. More buyers shopping at once can spark competition and lift prices .” And they’re not the only ones saying listing in May could be the key to selling for more. ATTOM Data analyzed almost 52 million home sales over the past 10 years and found sellers in May are achieving some of the highest returns . That means the ideal window this year is very much still open. What This Means for You If your goal is to sell for the strongest possible price, this is where timing and strategy come together. And you want to be sure you’re ready to make the most of it. So, what should you be doing right now? When prepping for a fast-moving window like this, you don’t want to waste time or money on the wrong prep work. And your agent is your go-to to make sure you’re focusing on the right things. They’ll be able to tell you if the “best week” is slightly different in your market. And what quick repairs or updates can help you get a higher price, without taking a ton of time or effort. Here's a quick example of things an agent may recommend based on information from Redfin: At the end of the day, when your prep time’s short, doing the right things matters more than doing more things. Bottom Line Zillow says the best time to list your house is just around the corner. Are you ready to make the most of it? If you want to take advantage of this Spring sweet spot and get top dollar for your house, let’s talk about what you need to do now to get ready to hit the market.
Think You Have To Put 20% Down? Most First-Time Homebuyers Don’t. According to Google Trends, online searches for down payment information recently hit an all-time high. And that’s a clear sign more buyers are trying to figure out what they really need to save before making a move (see graph below): If you’re wondering the same thing, you can always turn to the internet for answers. But a lot of the time, it’s better to ask a local expert. Because here’s what a pro would tell you. The 20% Down Payment Myth The idea that you need 20% down to buy a home is one of the biggest misconceptions around the homebuying process. And the data debunks the myth. While there are benefits to putting that much money down, most first-time buyers put down far less. Here’s why. Unless it’s stated by your lender, you typically don’t have to have a 20% down payment. There are even some loan options designed to help you get into a home with a much smaller upfront cost. As the Mortgage Reports explains: “The amount you need to put down will depend on a variety of factors, including the loan type and your financial goals. If you don’t have a large down payment saved up, don’t worry—there are plenty of options available, and you don’t need to put down the traditional 20% . . . many homebuyers are able to secure a home with as little as 3% or even no down payment at all . . . ” For example, FHA loans allow down payments as low as 3.5% , while VA and USDA loans offer zero down payment options for qualified applicants, like Veterans. And those options are just one reason so many first-time buyers are able to buy without a 20% down payment. What Buyers Are Actually Putting Down So, if buyers aren’t doing 20%, how much do they actually put down? According to the National Association of Realtors (NAR), the median down payment for first-time homebuyers is only 10%. That’s half of what you probably expected. That means if you’re aiming to save 20% because you think you have to, you may be setting a timeline that’s longer than necessary. And here’s some more good news. It’s not only that you may be able to buy with less money down than you thought, but there are also options to help you get to your down payment goal even faster. Why You Should Look into Down Payment Assistance Programs There are a lot of programs designed to help you save for a down payment – and they can make a big difference in how fast you hit your savings target. Unfortunately, buyers don’t realize how many there are, or that they may qualify for help. Research from Realtor.com shows almost 80% of first-time homebuyers qualify for down payment assistance (DPA), but only 13% actually use it (see chart below): And that’s another big miss holding would-be buyers like you back. In the U.S., there are over 2,600 homeownership programs available, many offering significant financial support. As Down Payment Resource shares : “ With an average benefit of $18,000, down payment assistance (DPA) remains one of the most essential tools for addressing the nation’s affordability challenges. Programs continue to expand in scope, serving a broader range of incomes, property types and borrower needs, including first-generation, military and repeat buyers.” Imagine how much further your savings could go with an extra $18,000 you can use to buy. In some cases, you may even be able to stack multiple programs, giving what you’ve saved an even bigger boost. Bottom Line The simple truth is: most first-time buyers don’t put 20% down . And if you’ve been waiting to buy until you have that saved, you may be setting a timeline that’s longer than necessary. To find out what you really need to save and if you qualify for any help, connect with a trusted lender who can walk you through your options. You may be able to buy sooner than you thought.
