More Homes, Slower Price Growth: What Buyers Need to Know
The current real estate market has a surprising twist – there are more homes for sale now than in previous years, and this shift could be a game-changer for prospective buyers. Here’s why this matters and what it could mean for your home search. More Choices Than Before One of the biggest perks of today’s market is the variety available. According to Realtor.com: “There were 29.2% more homes actively for sale on a typical day in October compared with the same time in 2023, marking the twelfth consecutive month of annual inventory growth and the highest count since December 2019.” While the number of homes on the market hasn't fully returned to pre-pandemic levels, this rise in inventory is a step in the right direction. With a larger selection, you’re more likely to find a home that fits your needs. The buying process may also feel less rushed, with fewer buyers competing for each home. Hannah Jones, Senior Economic Research Analyst at Realtor.com, adds: “Though still lower than pre-pandemic, burgeoning home supply means buyers have more options…” This shift means less pressure and more time for you to explore homes that meet your unique requirements without feeling hurried by intense competition. Slower Home Price Growth Over the past few years, low inventory drove fierce competition, leading to sharp price increases. However, as more homes come on the market, this trend is easing. In certain areas, inventory levels have even surpassed pre-pandemic counts, and home price growth has slowed or leveled off. Lance Lambert, Co-Founder of ResiClub, notes: “Generally speaking, housing markets where active inventory has returned to pre-pandemic 2019 levels have seen home price growth soften or even decline outright from their 2022 peak.” Slower price growth may help make homes more affordable. Dr. Anju Vajja, Deputy Director at the Federal Housing Finance Agency (FHFA), explains: “For the third consecutive month U.S. house prices showed little movement . . . relatively flat house prices may improve housing affordability.” Remember, though, that market conditions and price trends can vary from one location to another. Having an experienced real estate agent who understands your local market can help you navigate these dynamics effectively and make the most of these new opportunities. Bottom Line With more homes to choose from and slowing price growth, now might be a great time to find a home that aligns with your needs and budget. Reach out to discuss the expanding options available in today’s market and see how we can help make your home search a success.
Renting vs. Buying: The Net Worth Gap That May Surprise You
Deciding between renting or buying a home? One significant factor that could help guide your decision is the impact homeownership can have on your net worth. Every three years, the Federal Reserve Board publishes the Survey of Consumer Finances (SCF), which sheds light on the wealth gap between homeowners and renters – and the difference is substantial. According to recent data, a homeowner’s net worth is, on average, nearly 40 times greater than that of a renter. Take a look at the numbers to see this contrast: Why Homeowner Wealth Outpaces Renting In a past SCF report, the typical homeowner’s net worth was approximately $255,000, while the average renter’s was around $6,300. This was already a large disparity, but in the most recent survey, the gap widened further as homeownership wealth increased (see updated graph below). The SCF noted that: “. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.” One major reason for this increase is home equity. Home equity represents the difference between a home’s market value and the outstanding mortgage balance. As you pay down your mortgage, or as your property appreciates, your equity grows. Over recent years, home prices have risen due to limited supply and high demand, translating into greater home equity and net worth for owners. Should You Rent or Buy? If you’re weighing the decision between renting and buying, here’s something to keep in mind: While inventory has improved in 2024, demand still generally outstrips supply. As a result, experts predict moderate price appreciation in the coming year, which could mean additional equity gains for buyers who act now. This isn’t the unprecedented appreciation seen during the pandemic, but it does point to steady value growth for those looking to build wealth. Economist Ksenia Potapov from First American emphasizes: “Despite the risk of volatility in the housing market, homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.” Of course, price trends and availability vary by area, which is why consulting a local real estate expert is key. They can share valuable insights about your specific market and help you understand both the financial and lifestyle benefits of homeownership. As Bankrate advises: “Deciding between renting and buying a home isn’t just about cost — the decision also involves long-term financial strategies and personal circumstances. If you’re on the fence, speaking with a knowledgeable local real estate agent can help you weigh your options and make a more informed decision.” Bottom Line If you’re uncertain about whether renting or buying is right for you, remember that homeownership could significantly increase your net worth over time. And if affordability is a concern, let’s discuss available programs that might bring homeownership within reach.
Is a Fixer-Upper the Right Choice for You?
Thinking about buying a home but finding it hard to find something within your budget? Here’s the good news: there’s still a way to achieve homeownership—even with rising prices—and that might just be with a fixer-upper. Let’s break down why a fixer-upper could be the solution to owning a home and how to make it a successful project. What’s a Fixer-Upper? A fixer-upper is a property that’s ready to live in but needs some improvements. The level of work varies from house to house—some may just need simple cosmetic touches like fresh paint and flooring, while others may call for more serious repairs, such as roof replacements or plumbing updates. Because fixer-uppers require some renovation, they’re generally priced lower than fully updated homes in the same market. A study by StorageCafe even found that these homes are usually around 29% less expensive than move-in-ready options, making them an attractive choice for buyers looking to stretch their budgets. And right now, more buyers are starting to see the benefits of considering homes that need a little extra love. (see below): Is a Fixer-Upper Right for You? If you're open to rolling up your sleeves and taking on a few projects, buying a fixer-upper can be a smart way to get into the market. Here are a few essential tips to consider before taking the plunge. Tips for Buying a Home That Needs Work Pick the Right Location: Remember, you can change a home, but you can’t change its location. Look for properties in neighborhoods you love or areas with rising property values and nearby amenities. This way, even after investing in repairs, your home’s value will likely increase. Budget for the Unexpected: Renovating can be unpredictable. It’s wise to set aside extra funds for any unforeseen repairs or additional costs that could come up as you work on the home. Get a Thorough Home Inspection: Before finalizing your purchase, hire a home inspector to assess the property. An inspection can reveal essential repairs, helping you avoid costly surprises down the line. Prioritize Your Renovations: Make a clear plan for what you want to tackle first. Think of your home improvements in terms of essentials (must-haves), conveniences (nice-to-haves), and future upgrades (dream items). This will help keep you on track and within budget. Remember, a home doesn’t have to be perfect when you buy it—it’s the potential to make it your own that counts. A fixer-upper offers a chance to personalize a home to your taste while saving on the purchase price. With planning, budgeting, and a creative vision, you can turn a house that needs work into your ideal living space. Real estate agents can be valuable partners in your search, helping you find homes with the right potential. They know the local market and can guide you to properties where smart renovations can boost value, ensuring you find a home within your budget with room to grow. The Bottom Line In today’s housing market, affordability can feel like a barrier to homeownership. But if you’re open to investing time and effort, a fixer-upper could be the answer. With a little vision, patience, and creativity, you can transform a house in need of updates into a home you love. Let’s talk about what’s possible and find a property with potential for you.
Categories
Recent Posts
