Why Buying a Newly Constructed Home Might Be More Affordable Than You Think
If you’re in the market to buy a home, there’s some exciting news for you. Many people assume that newly built homes are more expensive than existing ones (houses that have already been lived in), but that’s not always the case. In fact, exploring newly built homes can sometimes lead to more cost-effective options, especially today. Hard to believe, right? But the data doesn’t lie. Here are two key reasons working with your agent to look into new home construction could help you find a more budget-friendly option. Reason 1: Lower Median Prices for Newly Built HomesThe median sales price for newly built homes is lower than the median sales price for existing homes today. This might seem surprising, but it’s true according to the latest data from the Census and the National Association of Realtors (NAR): Why is that? Builders are focused on building what they can sell. And right now, there’s a very real need for smaller and more affordable homes – so that’s what they’ve been bringing to the market. At the same time, there are also more newly built homes already on the market than there have been over the past few years, so builders are motivated to make sure they’re selling what they’ve got available before adding more. Reason 2: Attractive Incentives from Home BuildersAnother big reason to consider a newly built home is the range of incentives that many home builders are offering. Again, since builders are aiming to sell their current inventory, some are providing special deals to sweeten the pot for homebuyers. HousingWire explains today’s trend: “Overall, the usage of sales incentives was up to 61% in June, compared to 59% in May.”One of the most appealing incentives right now is how builders are able to offer competitive mortgage rates. They may also provide other incentives, such as covering closing costs, or offering free upgrades. Why This Matters to YouConsidering a newly built home could open up opportunities you hadn’t thought of before. With competitive pricing and attractive incentives, you might just find that a brand-new home is the most appealing option for you. Bottom LineBuying a home is a big decision, and it’s essential to consider all your options. By looking into newly built homes, you might find a perfect fit for your needs and your budget. Let’s explore the possibilities together. If you have any questions or want to see what’s available, feel free to reach out.
Your Equity Could Make A Move Possible
Your Equity Could Make A Move Possible Many homeowners looking to sell feel like they’re stuck between a rock and a hard place right now. Today’s mortgage rates are higher than the ones they currently have, making it harder to want to sell and make a move. Maybe you’re in the same boat. But what if there was a way to offset these higher borrowing costs? There is. The money you need probably already exists in your current home in the form of equity. What Is Equity? Think of equity as a simple math equation. Freddie Mac explains: “. . . your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.” Your equity grows as you pay down your loan over time and as home prices climb. Thanks to the rapid home price appreciation in recent years, you probably have a lot more equity than you realize. The latest data from the Census and ATTOM shows that more than two out of three homeowners have either completely paid off their mortgages or have at least 50% equity: This means the majority of homeowners have a game-changing amount of equity right now. How Your Equity Can Help Fuel Your Move After you sell your house, that equity can help you move without worrying as much about today’s mortgage rates. As Danielle Hale, Chief Economist for Realtor.com, says: “A consideration today's homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.” Here are a few ways you can use equity to buy your next home: Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without taking out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. Make a larger down payment: Your equity could be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much at today’s rates. The First Step: Determine How Much Equity You Have in Your Home To find out how much equity you have, you’ll need two things: The current mortgage balance on your home The current value of your home You can probably find the mortgage balance on your monthly mortgage statement. To understand the current market value of your house, you can pay for an appraisal, or you can contact a local real estate agent who can provide you with a professional equity assessment report (PEAR) at no charge. Once you’ve connected with a trusted local agent and run the numbers, you’re one step closer to making a move you may not have thought was realistic – all thanks to your equity. Bottom Line If you want to find out how much equity you have and talk more about how it can make your next move possible, let’s connect.
Do elections Affect The Housing Market?
Do elections Affect The Housing Market? With the 2024 Presidential election on the horizon, potential home buyers and sellers are understandably curious about how such a major event might influence the housing market. It's a crucial consideration, as buying or selling a home is a significant decision. Historically, Presidential elections have had only a minor, temporary effect on the housing market. Here’s a closer look at how home sales, prices, and mortgage rates have responded to elections in the past. Home Sales Typically, during Presidential election years, there's a slight dip in home sales in November. Ali Wolf, Chief Economist at Zonda, notes: "Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal." This slowdown is often due to the uncertainty and hesitation some people feel about making large decisions during an election period. However, this slowdown is temporary. Historical data shows that home sales tend to bounce back in December and continue to rise in the following year. For instance, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) reveals that after nine of the last eleven Presidential elections, home sales increased the next year.(see graph below): Home Prices When it comes to home prices, election years don’t typically disrupt the ongoing price trends. Ryan Lundquist, a residential appraiser and housing analyst, explains: "An election year doesn’t alter the price trend that is already happening in the market." Home prices generally continue to rise year-over-year, regardless of elections. Recent data from NAR shows that after seven of the last eight Presidential elections, home prices increased the following year. The only exception was during the housing market crash, which was an atypical year.(see graph below): Mortgage Rates Mortgage rates significantly affect monthly payments for home buyers. Data from Freddie Mac shows that in eight of the last eleven Presidential election years, mortgage rates decreased from July to November.(see chart below): Current forecasts suggest that mortgage rates might ease slightly throughout the remainder of this year, potentially continuing the trend of declining rates seen in most previous election years. For those looking to buy a home, lower rates could result in a more affordable monthly payment. What This Means for You The key takeaway is that while Presidential elections do have some impact on the housing market, these effects are usually minor and temporary. As Lisa Sturtevant, Chief Economist at Bright MLS, summarizes: "Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years." For most buyers and sellers, elections don’t significantly impact their plans. Bottom Line It's natural to feel uncertain during an election year, but history shows that the housing market remains strong and resilient. Whether you're buying or selling, it's essential to stay informed and work with a knowledgeable real estate professional to navigate the market effectively.
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