Over the past few weeks, the average 30-year fixed mortgage rate from Freddie Mac fell by half a percent. The drop happened over concerns about a potential recession. And since mortgage rates have risen dramatically this year, homebuyers across the country should see this decline as welcome news.
Freddie Macreports that the average 30-year rate was down to 5.30% from 5.81% two weeks prior (see graph below):
But why is this recent dip such good news for homebuyers? As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), explains:
“According to Freddie Mac, the 30-year fixed mortgage rate dropped sharply by 40 basis points to 5.3 percent. . . . As a result, home buying is about 5 percent more affordable than a week ago. This translates to about $100 less every month on a mortgage payment.”
That’s because when rates go up (as they have for the majority of this year), they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. The inverse is also true. A decrease in mortgage rates means an increase in your purchasing power.
The chart below shows how a half-point, or even a quarter-point, change in mortgage rates can impact your monthly payment:
Bottom Line
If your home doesn’t meet your needs, this may be the opportunity you’ve been waiting for. Let’s connect to see how you can benefit from the current drop in mortgage rates.
This myth can stop potential homebuyers cold. The median listing price in the U.S. is $385,000 [$1.1 million in Orange County]. You would have to have $77,000 [$220,000 in Orange County] readily available if you wanted to make a 20% down payment, an amount that can be daunting for a lot of people.
“It’s one of the biggest myths out there,” says John Mallett, founder of mortgage broker MainStreet Mortgage. “It stops more people from entering the market or even seeing if they can qualify.”
In reality, 20% down is more of a guideline than a hard and fast rule. In fact, the average down payment equals 12%. For first-time buyers it goes down to 7%.
Government-backed options, such as FHA loans and USDA loans, can be secured with as little as 3.5% down. If you are a member of the armed forces or a veteran and you qualify for a VA loan, you can buy a home with 0% down.
Conventional loans also don’t require a 20% down payment, but with less money down you will generally need to pay for private mortgage insurance. PMI costs 0.5% to 1% of your loan amount per year and is paid in monthly installments. So, if you have the money to pay 20% down, however, it can make sense to do it. Having more equity also protects you if home values fall.
You can also apply for a number of different grants and homebuyer assistance programs that can provide money for a down payment. These programs can include grants, forgivable loans and second mortgages that can provide partial or full down payment help. (Brokerage Redfin has put together a list of down payment assistance programs available nationwide and by state.)
CA Real Estate Group can find solutions for you and connect you with our preferred mortgage experts. Call us today!
When it comes to pricing your house, there’s a lot to consider. The only way to ensure you price it right is by partnering with a local real estate professional.
To find the best price, your agent balances current market demand, the values of homes in your neighborhood, where prices are headed, and your home’s condition.
Don’t pick just any price for your house. If you’re ready to sell, let’s connect to find the perfect price for your house.
💡 Find out if we’re the right Realtor Team for you! Check out @carealestategroup
You may be someone who looks forward to summer each year because it gives you an opportunity to rest, unwind, and enjoy more quality time with your loved ones. Now that summer is just around the corner, it’s worthwhile to start thinking about your plans and where you want to spend your vacations this year. Here are a few reasons a vacation home could be right for you.
Why You May Want To Consider a Vacation Home Today
Over the past two years, a lot has changed. You may be one of many people who now work from home and have added flexibility in where you live. You may also be someone who delayed trips for personal or health reasons. If either is true for you, there could be a unique opportunity to use the flexibility that comes with remote work or the money saved while not traveling to invest in your future by buying a vacation home.
Bankrate explains why a second home, or a vacation home, may be something worth considering:
“For those who are able, buying a second home is suddenly more appealing, as remote working became the norm for many professionals during the pandemic. Why not work from the place where you like to vacation — the place where you want to live?
If you don’t work remotely, a vacation home could still be at the top of your wish list if you have a favorite getaway spot that you visit often. It beats staying in a tiny hotel room or worrying about rental rates each time you want to take a trip.”
How a Professional Can Help You Find the Right One
So, if you’re looking for an oasis, you may be able to make it a second home rather than just the destination for a trip. If you could see yourself soaking up the sun in a vacation home, you may want to start your search. Summer is a popular time to buy vacation homes. By beginning the process now, you could get ahead of the competition.
The first step is working with a local real estate advisor who can help you find a home in your desired location. A professional has the knowledge and resources to help you understand the market, what homes are available and at what price points, and more. They can also walk you through all the perks of owning a second home and how it can benefit you.
A recent article from the National Association of Realtors (NAR), mentions some of the top reasons buyers today are looking into purchasing a second, or a vacation, home:
“According to Google’s data, the top reasons that homeowners cited for purchasing a second home were to diversify their investments, earn money renting, and use as a vacation home.”
If any of the reasons covered here resonate with you, connect with a real estate professional to learn more. They can give you expert advice based on what you need, your goals, and what you’re hoping to get out of your second home.
Bottom Line
Owning a vacation home is an investment in your future and your lifestyle. If this is one of your goals this year, you still have time to buy and enjoy spending the summer in your vacation home. When you’re ready to get started, let’s connect.
Some Highlights
Warmer weather and longer days mean summer is almost here. Celebrate by upgrading to the home of your dreams so you can enjoy all the season has to offer.
When you list your house, you can capitalize on today’s sellers’ market to fuel your upgrade. Then, you can move to a home with the features you want, like space to entertain or rooms for work and play.
If you’re ready to upgrade to a home that matches your changing needs, let’s connect.
💡 Find out if we’re the right Realtor Team for you! Check out @carealestategroup
If you’re a first-time buyer looking to break into the housing market but struggling to find a home to buy, condominiums (or condos) could be a great alternative for you.
Here are a few reasons condos may be something you’ll want to consider.
Exploring Condos Could Add Options That Fit Your Budget
Supply challenges are a reality across the board in today’s housing market. Broadening your home search to include condos could increase your overall pool of options. Just keep in mind, condos generally differ from single-family homes in average space and floorplans.
In a recent article, Bankrate covers some of these differences:
“Condos are generally more affordable because they come with less space — you likely won’t have your own backyard, for example, and the interior tends to be smaller than the square footage of a single-family home.”
But if the size of a condominium meets your needs, they could match your budget as well. Data from the National Association of Realtors (NAR) shows the difference in the median price for both housing types. For single-family homes, the median price is $363,800. And for condominiums, the median price is lower at $305,400.
So, if budget is top of mind for you, a condominium could be a great fit within your target price range.
Not to mention, buying a condo is a great way to break into the market and start building equity that can help power a future move up. The condo you purchase today may not be your forever home, but it can be a great stairstep that can help you buy your dream home later on.
Find Out if Condo Living Is Right for You
In addition, owning and living in a condo is also a lifestyle choice. While it’s true they may be smaller than single-family homes, the amenities condos provide could be a draw for many buyers. Less space in your home might mean minimal upkeep, lower maintenance, and more time for you to spend doing the things you enjoy.
To understand if condo life is for you, Bankrate recommends asking yourself a few simple questions:
“Hate to mow the lawn and trim the hedges? What about pressure washing your driveway? Are your finances such that having to lay out $5,000 or more for a new roof will be a burden? . . . Condos tend to work best for those comfortable with most of the aspects of apartment living, minus the built-in maintenance.”
Ultimately, talking with an expert real estate advisor is the best first step to determining if condo living might work for you.
Bottom Line
Condominiums are a great option for many buyers, especially those looking to buy their first home. If you’re willing to consider condos in your search, you could find something that’s in line with your target numbers and your needs. To learn more, let’s connect so you have an expert in the condo-buying process on your side.
💡 Find out if we’re the right Realtor Team for you! Check out @carealestategroup
Many people are wondering: will home prices fall this year? Whether you’re a potential homebuyer, seller, or both, the answer to this question matters for you. Let’s break down what’s happening with home prices, where experts say they’re headed, and how this impacts your homeownership goals.
“Price appreciation averaged 15% for the full year of 2021, up from the 2020 full year average of 6%.”
So why are prices climbing so much? It’s because there are more buyers than there are homes for sale. This imbalance is expected to maintain that upward pressure on home prices because homes for sale are a hot commodity in today’s low-inventory housing market.
Where Do Experts Say Prices Will Go from Here?
Experts say the housing market isn’t set up for a price decline due to that ongoing imbalance between supply and demand. In the latest home price forecasts for 2022, they’re calling for ongoing appreciation throughout the year (see graph below):
While the experts are forecasting more moderate price appreciation, the 2022 projections show price gains will remain strong throughout this year. First Americanexplains it like this:
“While house price growth is expected to moderate from the rapid pace of 2021, strong home buyer demand against a backdrop of historically tight inventory of homes for sale will likely keep appreciation positive in the coming year.”
What Does That Mean for You?
The biggest takeaway is that none of the experts are projecting depreciation. If you’re a homeowner thinking about selling, the higher price appreciation over the last two years has been great for your home’s value, but it’s also something you should factor in when planning your next steps. If you’ll also be buying a home after selling your current house, you shouldn’t wait for prices to fall. Waiting will only cost you more in the long run because climbing mortgage rates and rising home prices will have an impact on your next home purchase. Freddie Macsays:
“If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices – well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”
Bottom Line
If you’re thinking of selling to move up, you shouldn’t wait for prices to fall. Experts say prices will continue to appreciate this year. That means, if you’re ready, buying your next home before prices climb further may make the most financial sense. Let’s connect to begin the process of selling your current home and looking for your next one before prices rise higher.
Hidden Costs of iBuying
Think of them as digital house flippers who scour mountains of data for typically off-market homes.
iBuying Explained
Known as iBuyers, these platforms buy houses for cash online. If the algorithms align well, homeowners who’ve submitted an online form will receive instant offers from interested iBuyers. The entire process usually takes place with no person-to-person contact. After buying the house sight-unseen (except for photos), iBuyers quickly resell, usually to other investors.
Transaction Fees
While iBuying may sound convenient, it has financial downsides. Industry experts say transaction fees can be significantly higher than in traditional home sales. Expect fee rates of around 7% of the home price, but be prepared for fee rates as high as 13%. Additionally, iBuyers most often make offers below market value.
Trust an Expert
You may think iBuyers can save you time and money. But an experienced real estate professional will work to get the best offer for your property and will be there to help find your next home.
Realtor.com® nailed it when they said the U.S. housing market was in for another whirlwind year. Its 2022 housing forecast predicted continued increases in housing prices, rent and mortgage rates in “a mixed bag of housing affordability challenges and opportunities.”
We’ve heard a lot about rising housing prices over the past few years, but rents are projected to increase at a pace of 7.1% compared to 6.6% for home sale prices. The report even goes so far as to say that buying a starter home would be cheaper than renting in some of the country’s largest metropolitan areas.
Choosing whether to rent or buy is a huge decision in any market. Fear of making “the wrong decision” intensifies as the market tightens. Still, you may be surprised to find that you can afford to buy after looking at your financial picture.
Consider these advantages of buying over renting.
Homeownership Is an Investment
At the end of a lease, you’ll walk away with nothing. At the end of a mortgage, you’ll own property with equity.
Stable Payments
Rent payments can rise with every new lease you sign. A fixed-rate mortgage offers stability.
Creative Freedom
A rental property is not yours to change as you please. But when you buy a house, you have the freedom to turn it into your dream home.
When deciding to buy or rent, carefully examine your budget, and think about your lifestyle and goals. If you’re considering buying but are apprehensive about the current market, a real estate professional can help you understand what’s happening in your community.
It’s no secret real estate values increased during the pandemic, with an unprecedented number of homes selling in bidding wars. Due to material shortages, delivery delays and cost increases, new home construction has struggled to keep up with the demand for housing. Lumber prices tripled from pre-pandemic levels, and these costs are often passed along to home buyers.
Although single-family housing starts have decreased, the number of homes under construction is actually up because houses aren’t getting finished. Besides a shortage of building materials, construction – like other industries – has experienced major labor shortages, a considerable hurdle to completing projects.
Despite current construction woes, experts predict home builders will overcome supply shortages this year, enabling them to speed up construction to meet ongoing demands for new housing. More inventory should help keep prices in check and curb last year’s sizable increases in home values.
Analysts are hoping that a gradual tapering down in housing starts may provide some relief, allowing builders to catch up with the backlog of demand.
Routine maintenance can be just as important after you’ve accepted an offer as it is before listing your home. To keep your house well-maintained throughout the transition, Realtor.com® recommends tending to these six areas.
Carefully maintain the yard and walkways. Clean out flower beds and keep the yard tidy and free from leaves and downed tree limbs.
Keep your gutters cleared to prevent water damage. Check the roof before the inspection.
Service your HVAC system. Check your furnace, clean out ductwork and replace filters.
Keep critters out by covering any holes and vents.
Wash your windows no matter what time of year it is.
Keep up with the current season. Decorations for long-passed holidays and other telltale signs that nobody’s home can be a nuisance to your neighbors.
OK, squint a little. See that? That’s the finish line, just ahead of you! After all the anxiety, hard work and waiting, you’ve almost made it to closing day. Don’t end up disappointed about a deal gone wrong because you skipped a few steps.
As annoying as it is, complete all promised repairs. No, you won’t be able to enjoy them, but they can make or break your sale. Plan to have everything finished and in working order at least one week before closing. This will allow time for any last-minute adjustments. Save receipts and invoices, and take before-and-after photos of repaired or improved items.
When flying through those closing documents, slow down when you get to the settlement statement. Check all of these numbers carefully to make sure they match what you were expecting to receive from the sale.
With a limited number of homes for sale today and so many buyers looking to make a purchase before mortgage rates rise further, bidding wars are common. According to the latest report from the National Association of Realtors (NAR), nationwide, homes are getting an average of 4.8 offers per sale. Here’s a look at how that breaks down state-by-state (see map below):
The same report from NAR shows the average buyer made two offers before getting their third offer accepted. In this type of competitive housing market, it’s important to know what levers you can pull to help you beat the competition. While a real estate professional is your ultimate guide to presenting a strong offer, here are a few things you could consider.
Offering over Asking Price
When you think of sweetening the deal for sellers, the first thought you likely have is around the price of the home. In today’s housing market, it’s true more homes are selling for over asking price because there are more buyers than there are homes for sale. You just want to make sure your offer is still within your budget and realistic for the market value in your area – that’s where a local real estate professional can help you through the process. Bankratesays:
“Simply put, being willing to pay more money than other buyers is one of the best ways to get your offer accepted. You may not have to increase it by a lot — it’ll depend on the area and other factors — so look to your real estate agent for guidance.”
Putting Down a Bigger Earnest Money Deposit
You could also consider putting down a larger deposit up front. An earnest money deposit is a check you write to go along with your offer. If your offer is accepted, this deposit is credited toward your home purchase. NerdWalletexplains how it works:
“A typical earnest money deposit is 1% to 2% of the home’s purchase price, but the amount varies by location. A higher earnest money deposit may catch a seller’s attention in a hot housing market.”
That’s because it shows the seller you’re seriously interested in their house and have already set aside money that you’re ready to put toward the purchase. Talk to a professional to see if this is something you can do in your area.
Making a Higher Down Payment
Another option is increasing how much of a down payment you’re going to make. The benefit of a higher down payment is you won’t have to finance as much. This helps the seller feel like there’s less risk of the deal or the financing falling through. And if other buyers put less down, it could be what helps your offer stand out from the crowd.
Non-Financial Options To Make a Strong Offer
Realtor.compoints out that while increasing these financial portions of the deal can help, they’re not your only options:
“. . . Price is not the only factor sellers weigh when they look at offers. The buyer’s terms and contingencies are also taken into account, as well as pre-approval letters, appraisal requirements, and the closing time the buyer is asking for.”
When it’s time to make an offer, partner with a trusted professional. They have insight into what sellers are looking for in your local market and can give you expert advice on what levers you may or may not want to pull when it’s time to write an offer.
From a non-financial perspective, this can include things like flexible move-in dates or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). For example, you could make an offer that’s not contingent on the sale of your current home. Just remember, there are certain contingencies you don’t want to forego, like your home inspection. Ultimately, the options you have can vary state-to-state, so it’s best to lean on an expert real estate professional for guidance.
Bottom Line
In today’s hot housing market, you need a partner who can serve as your guide, especially when it comes to making a strong offer. Let’s connect so you have a trusted resource and coach on how to make the strongest offer possible for your specific situation.
💡 Find out if we’re the right Realtor Team for you! We’re active in our community…check out @carealestategroup
👩 Michelle Kim @michellejeankim_homes
Realtor DRE # 01885912
714-253-7531 | michelle@carealestategroup.com
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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
With the rocky year we’ve all had, it’s important to have a sanctuary in your own home where you can relax, unwind, and have a “Calgon, take me away” kind of experience. Establishing that personal space can do a lot of good for your mental health and well-being. But did you know it can also help increase your home’s value?
Bathroom renovations remain one of the most valuable home improvements. In fact, a midrange bathroom remodel can return up to 60% of your investment at the time of resale, according to Remodeling magazine’s Cost vs. Value report.
“We believe that a well-designed bathroom can make you a better person, which may seem like a bold statement,” says Joseph A. Tsedaka, principal at Nomi, which specializes in luxury bathroom remodels.“For some, that means including spalike features so you can unwind after a stressful day.”
Creating a luxurious bathroom space that you never want to leave can be done with a few simple tricks. Here’s what the design experts have to say.
Spa additions
Double the showers, double the spa experience.
(True Homes Photography )
If you’re trying to emulate luxury spas and saunas, providing the right shower experience is everything.
“Double showers are a must. We often recommend double showers with rain heads, hand-held features, and multiple faucets to create a truly relaxing experience,” says Tsedaka. He recommends adding a body sprayer, which can be customized to a homeowner’s height.
Other deluxe features to consider include built-in speakers and heated floors, to avoid that nasty shock of stepping onto cold tile with your bare feet.
Tsedaka says another popular addition is a smart home feature that allows everything (including lights, audio, and even the shower) to be controlled from the homeowner’s phone or an iPad on the wall.
“Even a neutral-tone bathroom can be elevated with finishes and hardware,” says Marlaina Teich of Marlaina Teich Designs in New York. “Choose unique tile for the shower, or consider marble chair rail molding around the bathroom for a classy, timeless look.”
Tsedaka says spa bathrooms tend to have more earthy materials like wood floors or natural stone in the shower.
“We love to use ipe wood, a naturally treated wood from Brazil that reacts excellently to water and moisture,” he says. “Teakwood also has a similar effect.”
Mel Bean of Mel Bean Interiors in Tulsa, OK, says thoughtfully curated mirrors can add to the look of your posh bathroom. Consider a classic rectangular mirror with a brass frame (CB2, $229) or something more geometric that’ll bring unique visual interest.
Layout
Dual sinks allow more personal space and privacy.
(True Homes Photography )
From toiletries to towels, the layout of your spa bathroom can add to the pleasing appearance.
“If you have the space, I would recommend installing a double vanity so each person has their own space, storage, and some privacy,” says Tsedaka.
He says it’s important to consider how you live, too. Do you actually take baths, or are you just including a bath for aesthetic reasons?
“We recommend coming from a place of functionality when considering the layout,” says Tsedaka.
For example, he says he prefers to have a drop-down tub if used frequently instead of a free-standing tub, which limits space.
“If you do have a free-standing tub, however, I always like to put it next to a window or a place where you can add a shelf to hold shampoo, soap, etc.,” says Tsedaka.
Lighting
Adjust natural lighting with shades.
(Stoneside Blinds & Shades)
Lighting, whether it’s natural or added, gives your bathroom a calming ambiance and a sense of sophistication.
When working with natural light, you’ll want to pick the right type of shades.
“To let in light when you want it, while also allowing for a darker, relaxing atmosphere, consider transitional or roller shades in the bathroom,” says James Brewer, a design consultant from Stoneside Blinds and Shades.
As for electrical light, Tsedaka recommends three different types of lighting: normal can lights, mood lighting using a dimmer, and chromotherapy lighting for inside the shower. “This is LED lighting that can change to any color you want,” he says.
For mood lighting he suggests using 4 inches for can lights on dimmers instead of the traditional 6-inch can light. He also says under-cabinet lighting or step light can be great for middle-of-the-night use when you don’t want to have direct light.
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