Metro Atlanta Real Estate BlogRecently posted or modified blog posts in the category - Market Updateshttps://www.andorarealtygroup.com/blog/Copyright AndoraRealtyGroup.com2023-12-15T09:22:28-07:00tag:andorarealtygroup.com,2012-09-20:6024The Surprising Trend in the Number of Homes Coming onto the Market
If you're thinking about moving, it's important to know what's happening in the housing market. Here's an update on the supply of homes currently for sale. Whether you're buying or selling, the number of homes in your area is something you should pay attention to.
In the housing market, there are regular patterns that happen every year, called <a href="https://www.mykcm.com/2023/11/22/home-prices-still-growing-just-at-a-more-normal-pace/" rel="noopener noreferrer" target="_blank">seasonality</a>. Spring is the peak homebuying season and also when the most homes are typically listed for sale (homes coming onto the market are known in the industry as new listings). In the second half of each year, the number of new listings typically decreases as the pace of sales slows down.
The graph below uses <a href="https://www.realtor.com/research/data/" rel="noopener noreferrer" target="_blank">data</a> from Realtor.com to provide a visual of this seasonality. It shows how this year (the black line) is breaking from the norm (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231212/20231213-New-Listings-Stabilizing.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231212/20231213-New-Listings-Stabilizing.png" /></a>
Looking at this graph, three things become clear:
2017-2019 (the blue and gray lines) follow the same general pattern. These years were very typical in the housing market and their lines on the graph show normal, seasonal trends.
Starting in 2020, the data broke from the normal trend. The big drop down in 2020 (the orange line) signals when the pandemic hit and many sellers paused their plans to move. 2021 (the green line) and 2022 (the red line) follow the normal trend a bit more, but still are abnormal in their own ways.
This year (the black line) is truly unique. The steep drop off in new listings that usually occurs this time of year hasn’t happened. If 2023 followed the norm, the line representing this year would look more like the dotted black line. Instead, what’s happening is the number of new listings is stabilizing. And, there are even more new listings coming to the market this year compared to the same time last year.
What Does This Mean for You?
For buyers, new listings stabilizing is a positive sign. It means you have a more steady stream of options coming onto the market and more choices for your next home than you would have at the same time last year. This opens up possibilities and allows you to explore a variety of homes that suit your needs.
For sellers, while new listings are breaking seasonal norms, inventory is still well below where it was before the pandemic. If you look again at the graph, you’ll see the black line for this year is still lower than normal, meaning inventory isn’t going up dramatically and prices aren’t heading for a crash. And with less competition from other sellers than you’d see in a more typical year, your house has a better chance to be in the spotlight and attract eager buyers.
Whether you're on the hunt for your next home or thinking of selling, now might just be the perfect time to make your move. If you have questions or concerns about the availability of homes in our local area, let’s connect.
2023-12-15T09:19:55-07:002023-12-15T09:22:28-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5987Why the Economy Won’t Tank the Housing Market
If you’re worried about a coming recession, you’re not alone. Over the past couple of years, there’s been a lot of recession talk. And many people worry, if we do have one, it would cause the unemployment rate to skyrocket. Some even fear that a spike in unemployment would lead to a rash of foreclosures similar to what happened 15 years ago.
However, the latest Economic Forecasting Survey from the Wall Street Journal (WSJ) reveals that, for the first time in over a year, less than half (48%) of economists believe a recession will actually occur within the next year:
“Economists are turning optimistic on the U.S. economy . . . economists lowered the probability of a recession within the next year, from 54% on average in July to a more optimistic 48%. That is the first time they have put the probability below 50% since the middle of last year.”
If over half of the experts no longer expect a recession within the next year, you might naturally think those same experts also don’t expect the unemployment rate to jump way up – and you’d be right. The graph below uses <a href="https://www.wsj.com/economy/economic-forecasting-survey-archive-11617814998" rel="noopener noreferrer" target="_blank">data</a> from that same WSJ survey to show exactly what the economists project for the unemployment rate over the next three years (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Projections-for-the-next-3-Years.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Projections-for-the-next-3-Years.png" /></a>
If those expert projections are correct, more people will lose their jobs in the upcoming year. And job losses of any kind are devastating for those people and their loved ones.
However, the question here is: will there be enough job losses to cause a wave of foreclosures that will crash the housing market? Based on historical context from Macrotrends and the Bureau of Labor Statistics (BLS), the answer is no. That’s because the unemployment rate is currently near all-time lows (see graph below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Rate-Near-All-Time-Lows.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231129-Unemployment-Rate-Near-All-Time-Lows.png" /></a>
As the orange bar in the graph shows, the average unemployment rate dating back to 1948 is 5.7%. The red bar shows, the last time the housing market crashed, in the immediate aftermath of the 2008 financial crisis, the average unemployment rate was up to 8.3%. Both of those bars are much higher than the unemployment rate today (shown in the blue bar).
Moving forward, projections show the unemployment rate is likely to stay beneath the 75-year average. And that means we won’t see a wave of foreclosures that would severely impact the housing market.
Most economists no longer expect a recession to occur in the next 12 months. That’s why they also don’t expect a dramatic rise in the unemployment rate that would lead to a rash of foreclosures and another housing market crash. If you have questions about unemployment and its impact on the housing market, <a href="https://www.andorarealtygroup.com/contact/" target="_blank">let’s connect</a>.
2023-12-04T12:07:21-07:002023-12-04T12:09:32-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5982Are the Top 3 Housing Market Questions on Your Mind?
When it comes to what’s happening in the housing market, there’s a lot of confusion going around right now. You may hear one thing in conversation with your friends, see something totally different on the news, and read something on social media that contradicts both of those thoughts. And, if you’re thinking about making a move, that can leave you with a lot of lingering questions. That’s where a trusted local real estate agent comes in.
Here are the top 3 questions people are asking about today’s housing market, and the data to help answer them.
1. What’s Next for Mortgage Rates?
Mortgage rates are higher than they’ve been in recent years. And, if you’re looking to buy a home, that impacts how much you can afford. That’s why so many buyers want to know what’s ahead for mortgage rates. The answer to that question is: no one can say for certain, but here’s what we know based on historical trends.
There’s a long-standing relationship between mortgage rates and <a href="https://www.mykcm.com/2023/08/03/how-inflation-affects-mortgage-rates/" rel="noopener noreferrer" target="_blank">inflation</a>. Basically, when inflation is high, <a href="https://www.mykcm.com/2023/09/06/mortgage-rates-past-present-and-possible-future/" rel="noopener noreferrer" target="_blank">mortgage rates</a> tend to follow suit. Over the past year, inflation was up, so mortgage rates were as well. But inflation is easing now. And this is why the Federal Reserve has recently paused their federal funds rate hikes, which means many experts believe mortgage rates will begin to come down.
And in some ways, we’ve started to see hints of slightly lower <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">mortgage rates</a> in recent weeks. But it’s certainly been volatile and will likely continue to be that way going into next year. Some ongoing variation is to be expected, but the anticipation is, that in 2024, we’ll see a downward trend. As Aziz Sunderji, Strategist at Home Economics, <a href="https://www.home-economics.us/p/mortgage-rates-are-set-to-fall" rel="noopener noreferrer" target="_blank">says</a>:
“The bottom line is that interest rates are likely to be lower-perhaps even lower than many optimists think - in the weeks and months to come.”
2. Where Are Home Prices Headed?
While there’s been a <a href="https://www.mykcm.com/2023/11/02/dont-believe-everything-you-read-about-home-prices/" rel="noopener noreferrer" target="_blank">lot of concern</a> prices would come crashing down this year, data shows that didn’t happen. In fact, home prices are rising in most of the nation. Experts say that trend will continue, just at a slower pace that’s much more <a href="https://www.mykcm.com/2023/11/22/home-prices-still-growing-just-at-a-more-normal-pace/" rel="noopener noreferrer" target="_blank">normal</a> for the housing market – and that’s a good thing.
To help show just how confident experts are in this continued appreciation, take a look at the <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" target="_blank">Home Price Expectation Survey</a> from Pulsenomics. It’s a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. As the graph below shows, the consensus is, that prices will keep climbing next year, and in the years to come.
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231128-Estimated-Home-Price-Performance.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231128-Estimated-Home-Price-Performance.png" /></a>
3. Is a Recession Around the Corner?
While recession talk has been a common thing over the past few years, there’s good news on that front.
The <a href="https://www.wsj.com/economy/economic-forecasting-survey-archive-11617814998" rel="noopener noreferrer" target="_blank">Wall Street Journal</a> (WSJ) polls experts on this topic regularly. And last year at this time, most of them thought a recession would have happened by now. But as experts look at all the leading indicators today, they’re changing their minds and saying a recession is getting less and less likely. The latest results show that more experts now think we’re not headed for another recession (see chart below):
<a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231128-Do-Experts-Think-a-Recession-is-Coming.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20231127/20231128-Do-Experts-Think-a-Recession-is-Coming.png" /></a>
This is big news for the housing market. And while the 48% to 52% split may seem close to half and half, the key thing to focus on is that the majority of these experts think we’ve avoided a recession already.
The big takeaway? The data shows there isn’t cause for concern – there are actually more signs of hope. Let’s connect to talk more about the housing market questions on your mind as we head into the new year.
2023-12-01T09:06:04-07:002023-12-01T09:08:04-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5975These Top Cities Show Home Prices Are Still Climbing
If you’re considering buying a home or selling your current one to find something that better suits your needs, you may have questions about what’s happening with home prices today. Here’s what you need to know.
There’s still a lot of confusion and misinformation out there. So, no matter what you may have heard, the national <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#news-research" rel="noopener noreferrer" target="_blank">data</a> shows they've actually been climbing again (see graphs below):
<a href="https://www.mykcm.com/content/images/20231113/20231114-Percent-Change-in-Home-Values.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231113/20231114-Percent-Change-in-Home-Values.png" /></a>
As you can see, in the first half of 2022, home prices went way up. Those increases were dramatic and unsustainable. So, in the second half of 2022, prices adjusted. Those dips were small and didn't last very long. Still, the news made a big deal about these slight declines, which may have made you worry.
But what's important to know is that, in 2023, prices are going up again, and this time it's at a more <a href="https://www.mykcm.com/2023/10/20/home-price-growth-is-returning-to-normal-infographic/" rel="noopener noreferrer" target="_blank">normal pace</a>. The fact that all three reports now show more typical price increases this year is good news for the housing market.
Home Prices Are Rising Across the Top Cities in the U.S.
After seeing steady home price growth at the national level for the last several months, you may wonder if prices are going up in your local area, too. Know this: while this will vary from one area to the next, home prices are appreciating in these top cities <a href="https://www.spglobal.com/spdji/en/index-announcements/article/sp-corelogic-case-shiller-index-continues-to-trend-upward-in-august/" rel="noopener noreferrer" target="_blank">Case-Shiller</a> reports on in their monthly price index (see chart below):
<a href="https://www.mykcm.com/content/images/20231113/20231114-Case-Shiller-Home-Price-Movement.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231113/20231114-Case-Shiller-Home-Price-Movement.png" /></a>
That’s why so many experts are able to forecast home prices will end the year in the positive and continue going up in 2024.
Here’s How This Affects You
For Buyers: If you've been waiting to buy a home because you were concerned it might lose value, the fact that home prices are going up should ease your worries. Buying a home before prices climb higher can be a smart move since home values typically appreciate over time.
For Sellers: If you've been postponing selling your house because you were worried about how changing home prices would affect its value, now might be a good time to work with a real estate agent to put your house on the market. You don't have to wait any longer because the data shows home prices are in your favor.
If you delayed moving because you were concerned home prices would drop, don't worry – the numbers show they're going up nationally. To better understand how home prices are changing in your local area, <a href="https://www.andorarealtygroup.com/contact/">let’s connect</a>.
2023-11-15T09:28:00-07:002023-11-30T09:30:40-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5912Don’t Believe Everything You Read About Home Prices
According to the latest data from <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey/national-housing-survey-archive" rel="noopener noreferrer" target="_blank">Fannie Mae</a>, 23% of Americans still think <a href="https://www.mykcm.com/2023/09/26/the-return-of-normal-seasonality-for-home-price-appreciation/" rel="noopener noreferrer" target="_blank">home prices</a> will go down over the next twelve months. But why do roughly 1 in 4 people feel that way?
It has a lot to do with all the negative talk about home prices over the past year. Since late 2022, the media has created a lot of fear about a <a href="https://www.mykcm.com/2023/09/27/why-todays-housing-inventory-shows-a-crash-isnt-on-the-horizon/" rel="noopener noreferrer" target="_blank">price crash</a> and those concerns are still lingering. You may be hearing people in your own life saying they’re worried about home prices or see on social media that some influencers are saying prices are going to come tumbling down.
If you’re someone who still thinks prices are going to fall, ask yourself this: Which is a more reliable place to get your information – clickbait headlines and social media or a trusted expert on the housing market?
The answer is simple. Listen to the professionals who specialize in residential real estate.
Here’s the latest data you can actually trust. Housing market experts acknowledge that nationally, prices did dip down slightly late last year, but that was short-lived. <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/fannie-mae-home-price-index" rel="noopener noreferrer" target="_blank">Data</a> shows prices have <a href="https://www.mykcm.com/2023/10/03/home-prices-are-not-falling/" rel="noopener noreferrer" target="_blank">already rebounded</a> this year after that slight decline in 2022 (see graph below):
<a href="https://www.mykcm.com/content/images/20231030/20231102-Percent-Change-in-Home-Prices.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231030/20231102-Percent-Change-in-Home-Prices.png" /></a>
But it’s not just Fannie Mae that’s reporting this bounce back. Experts from across the industry are showing it in their data too. And that’s why so many forecasts now project <a href="https://www.mykcm.com/2023/09/12/what-experts-project-for-home-prices-over-the-next-5-years/" rel="noopener noreferrer" target="_blank">home prices</a> will net <a href="https://www.mykcm.com/2023/09/08/home-price-forecasts-revised-for-2023-infographic/" rel="noopener noreferrer" target="_blank">positive</a> this year – not negative. The graph below helps prove this point with the latest forecasts from each organization:
<a href="https://www.mykcm.com/content/images/20231030/20231102-2023-Year-End-Home-Price-Forecasts.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20231030/20231102-2023-Year-End-Home-Price-Forecasts.png" /></a>
What’s worth noting is that, just a few short weeks ago, the Fannie Mae <a href="https://www.fanniemae.com/research-and-insights/forecast" rel="noopener noreferrer" target="_blank">forecast</a> was for 3.9% appreciation in 2023. In the forecast that just came out, that projection was updated from 3.9% to 6.7% for the year. This increase goes to show just how confident experts are that home prices will net positive this year.
So, if you believe home prices are falling, it may be time to get your insights from the experts instead – and they’re saying prices aren’t falling, they’re climbing.
There’s been a lot of misleading information about home prices over the past year. And that’s still having an impact on how people are feeling about the housing market today. But it’s best not to believe everything you hear or read.
If you want information you can trust, turn to the real estate experts. Their data shows home prices are on the way back up and will net positive for the year. If you have questions about what’s happening in our local area, let’s connect.
2023-11-08T08:19:00-07:002023-11-08T08:20:41-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5757Gen Z: The Next Generation Is Making Moves in the Housing Market
Generation Z (Gen Z) is eager to put down their own roots and achieve financial independence. As a result, they’re turning to <a href="https://www.mykcm.com/2023/07/04/americans-still-view-homeownership-as-the-american-dream/" rel="noopener noreferrer" target="_blank">homeownership</a>. According to the latest <a href="https://www.nar.realtor/sites/default/files/documents/2023-home-buyers-and-sellers-generational-trends-report-03-28-2023.pdf" rel="noopener noreferrer" target="_blank">Home Buyers and Sellers Generational Trends Report</a> from the National Association of Realtors (NAR), 30% of Gen Z buyers transitioned straight from living under their parents' roofs to owning their own homes.
If you’re a member of this generation, and you’re interested in pursuing your own <a href="https://www.mykcm.com/2023/08/02/how-to-know-if-youre-ready-to-buy-a-home/" rel="noopener noreferrer" target="_blank">dream of homeownership</a>, here’s some information you may find helpful on why and where your peers are buying.
The Reasons Gen Z Want To Become Homeowners
A recent survey by Rocket Mortgage <a href="https://www.rocketmortgage.com/learn/gen-z-home-buying#:~:text=Of%20those%20surveyed%2C%2034%25%20said,eager%20to%20establish%20a%20household." rel="noopener noreferrer" target="_blank">identifies</a> some of the top <a href="https://www.mykcm.com/2023/06/02/reasons-to-own-your-home-infographic/" rel="noopener noreferrer" target="_blank">motivators</a> driving Gen Z buyers to purchase a home:
“Of those surveyed, 34% said that starting or growing their family was their main motivation to buy a home. . . . Along with growing a family comes establishing a home base.”
Another key reason the survey says Gen Z wants to buy is because <a href="https://www.mykcm.com/2023/05/24/owning-a-home-helps-protect-against-inflation/" rel="noopener noreferrer" target="_blank">homeownership</a> can give them more stability (20.8%). That’s because buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost.
When you have a fixed-rate mortgage on your home, you can lock in your monthly payment for the duration of your loan, often 15 to 30 years. If you keep renting, you don’t have that same benefit, and you won’t be protected from rising housing costs.
So, if you’re ready to start a new chapter in your life or if you’re craving more <a href="https://www.mykcm.com/2023/07/21/real-estate-continues-to-be-the-best-investment-infographic/" rel="noopener noreferrer" target="_blank">stability</a>, know that your peers feel the same way, and those motivators are why they’re turning to <a href="https://www.mykcm.com/2023/07/20/owning-your-home-helps-you-build-wealth/" rel="noopener noreferrer" target="_blank">homeownership</a>.
Gen Z's Next Stop: Where Are They Making Their Moves?
If those reasons have you feeling ready to buy, here’s some information on <a href="https://www.mykcm.com/2023/08/14/where-are-people-moving-today-and-why/" rel="noopener noreferrer" target="_blank">where</a> your peers are finding their homes that could help you with <a href="https://www.mykcm.com/2023/08/17/people-want-less-expensive-homes-and-builders-are-responding/" rel="noopener noreferrer" target="_blank">your search</a>. According to a recent Lending Tree <a href="https://www.lendingtree.com/home/mortgage/the-most-popular-us-cities-for-gen-z-homebuyers-ranked/" rel="noopener noreferrer" target="_blank">survey</a>, Gen Z buyers are focusing on more affordable areas to help boost their buying power and offset the challenges that come with today’s <a href="https://www.mykcm.com/2023/08/03/how-inflation-affects-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a>.
Many Gen Z buyers still want the convenience and excitement of city life, but also value the affordability, open air, and space more suburban areas offer. Jacob Channel, Senior Economist at LendingTree, <a href="https://www.nytimes.com/2023/06/15/realestate/gen-z-home-buying.html" rel="noopener noreferrer" target="_blank">explains</a>:
“. . . they want to live in a city, but they also want to be close to nature.”
Locating a home that offers both of those things requires expertise. Working with a trusted <a href="https://www.mykcm.com/2023/08/23/why-you-need-a-true-expert-in-todays-housing-market/" rel="noopener noreferrer" target="_blank">real estate professional</a> can help you find a home in your budget and desired area. Your agent will know the most affordable neighborhoods to search in. They can also highlight the amenities and features that location offers and how those are aligned with <a href="https://www.mykcm.com/2023/07/03/evaluating-your-wants-and-needs-as-a-homebuyer-matters-more-today/" rel="noopener noreferrer" target="_blank">your goals</a>. They’ll also be able to walk you through how things like <a href="https://www.mykcm.com/2023/07/13/how-remote-work-expands-your-homebuying-horizons/" rel="noopener noreferrer" target="_blank">remote work</a> can help you cast a broader net for <a href="https://www.mykcm.com/2023/07/26/tips-for-making-your-best-offer-on-a-home/" rel="noopener noreferrer" target="_blank">your search</a>.
Bottom Line
If you’re a member of Gen Z and are just getting started on your homebuying journey, or if you want to learn more about the process, let’s connect. That way, you have a guide to help you find a home that fits both your lifestyle and your budget.
2023-09-01T09:30:26-07:002023-09-01T09:32:05-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5756Why Median Home Sales Price Is Confusing Right Now
The National Association of Realtors (NAR) is set to release its most recent Existing Home Sales (EHS) report tomorrow. This monthly release provides information on the volume of sales and price trends for homes that have previously been owned. In the upcoming release, it’ll likely say <a href="https://www.mykcm.com/2023/07/25/dont-fall-for-the-next-shocking-headlines-about-home-prices/" rel="noopener noreferrer" target="_blank">home prices</a> are down. This may seem a bit confusing, especially if you’ve been following along and reading the blogs saying home prices have hit the bottom and have since <a href="https://www.mykcm.com/2023/08/11/home-prices-are-back-on-the-rise-infographic/" rel="noopener noreferrer" target="_blank">rebounded</a>.
So, why would this say <a href="https://www.mykcm.com/2023/06/12/are-home-prices-going-up-or-down-that-depends/" rel="noopener noreferrer" target="_blank">home prices </a>are falling when so many other price reports say they’re going back up? It all depends on the methodology of each one. NAR reports on the median home sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.
The Center for Real Estate Studies at Wichita State University <a href="https://realestate.wichita.edu/question/hpi-vs-median-price/#:~:text=The%20median%20sale%20price%20measures,and%20half%20sold%20for%20less" rel="noopener noreferrer" target="_blank">explains</a> median sales prices like this:
“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”
Investopedia helps define what a repeat sales approach <a href="https://www.investopedia.com/terms/r/repeatsales-method.asp" rel="noopener noreferrer" target="_blank">means</a>:
“Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.”
The Challenge with the Median Home Sales Price Today
As the quotes above say, the approaches can tell different stories. That’s why median home sales price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are <a href="https://www.mykcm.com/2023/07/17/home-prices-are-rebounding/" rel="noopener noreferrer" target="_blank">appreciating again</a>.
Bill McBride, Author of the Calculated Risk blog, <a href="https://calculatedrisk.substack.com/p/case-shiller-national-house-price-747" rel="noopener noreferrer" target="_blank">sums</a> the difference up like this:
“Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.”
To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.
<a href="https://www.mykcm.com/content/images/20230814/20230821-How-Median-Price-Works.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230814/20230821-How-Median-Price-Works.png" /></a>In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.
That’s why using the median home sales price as a gauge of what’s happening with home values may be confusing right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When <a href="https://www.mykcm.com/2023/08/03/how-inflation-affects-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a> are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable.
That’s why a greater number of ‘less-expensive’ houses are selling right now – and that’s causing the median home sales price to decline. But that doesn’t mean any single house lost value.
When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median home sales price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by <a href="https://www.mykcm.com/2023/08/02/how-to-know-if-youre-ready-to-buy-a-home/" rel="noopener noreferrer" target="_blank">affordability</a> and current <a href="https://www.mykcm.com/2023/07/19/explaining-todays-mortgage-rates/" rel="noopener noreferrer" target="_blank">mortgage rates</a>.
Bottom Line
For a more in-depth understanding of home price trends and reports, let’s connect.
2023-08-31T06:04:00-07:002023-09-01T06:07:36-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5670Don’t Fall for the Next Shocking Headlines About Home Prices
If you’re thinking of <a href="https://www.mykcm.com/2023/07/13/how-remote-work-expands-your-homebuying-horizons/" rel="noopener noreferrer" target="_blank">buying</a> or <a href="https://www.mykcm.com/2023/07/14/low-housing-inventory-is-a-sweet-spot-for-sellers-infographic/" rel="noopener noreferrer" target="_blank">selling a home</a>, one of the biggest questions you have right now is probably: what’s happening with home prices? And it’s no surprise you don’t have the clarity you need on that topic. Part of the issue is how <a href="https://www.mykcm.com/2023/06/20/why-the-median-home-price-is-meaningless-in-todays-market/" rel="noopener noreferrer" target="_blank">headlines</a> are talking about prices.
They’re basing their negative news by <a href="https://www.mykcm.com/2023/06/12/are-home-prices-going-up-or-down-that-depends/" rel="noopener noreferrer" target="_blank">comparing</a> current stats to the last few years. But you can’t compare this year to the <a href="https://www.mykcm.com/2023/05/30/todays-real-estate-market-the-unicorns-have-galloped-off/" rel="noopener noreferrer" target="_blank">‘unicorn’ years</a> (when home prices reached record highs that were unsustainable). And as prices begin to normalize now, they’re talking about it like it’s a bad thing and making people fear what’s next. But the worst <a href="https://www.mykcm.com/2023/07/17/home-prices-are-rebounding/" rel="noopener noreferrer" target="_blank">home price declines</a> are already behind us. What we’re starting to see now is the return to more normal <a href="https://www.mykcm.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/" rel="noopener noreferrer" target="_blank">home price appreciation</a>.
To help make home price trends easier to understand, let’s focus on what’s typical for the market and omit the last few years since they were anomalies.
Let’s start by talking about seasonality in real estate. In the housing market, there are predictable ebbs and flows that happen each year. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.
That’s why, before the abnormal years we just experienced, there was a reliable long-term home price trend. The graph below uses data from <a href="https://www.spglobal.com/spdji/en/indices/indicators/sp-corelogic-case-shiller-us-national-home-price-nsa-index/#overview" rel="noopener noreferrer" target="_blank">Case-Shiller</a> to show typical monthly home price movement from 1973 through 2021 (not <a href="https://www.census.gov/construction/nrs/faqs/faqs_seas.html#quest2" rel="noopener noreferrer" target="_blank">adjusted</a>, so you can see the seasonality):
<a href="https://www.mykcm.com/content/images/20230724/20230725-48-year-average-monthly-home-price-movement.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230724/20230725-48-year-average-monthly-home-price-movement.png" /></a>
As the data from the last 48 years shows, at the beginning of the year, home prices grow, but not as much as they do entering the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.
Why This Is So Important to Understand
In the coming months, as the housing market moves further into a more predictable seasonal rhythm, you’re going to see even more headlines that either get what’s happening with home prices wrong or, at the very least, are misleading. Those headlines might use a number of price terms, like:
Appreciation: when prices increase.
Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
Depreciation: when prices decrease.
They’re going to mistake the slowing home price growth (deceleration of appreciation) that’s typical of market seasonality in the fall and winter and think prices are falling (depreciation). Don’t let those headlines confuse you or spark fear. Instead, remember it’s normal to see a deceleration of appreciation, slowing home price growth, as the months go by.
Bottom Line
If you have questions about what’s happening with home prices in our local area, let’s connect.
2023-08-08T08:47:42-07:002023-08-08T08:49:40-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5655Explaining Today’s Mortgage Rates
If you’re following <a href="https://www.mykcm.com/2023/07/03/evaluating-your-wants-and-needs-as-a-homebuyer-matters-more-today/" rel="noopener noreferrer" target="_blank">mortgage rates</a> because you know they impact your <a href="https://www.mykcm.com/2023/05/19/the-impact-of-changing-mortgage-rates-infographic/" rel="noopener noreferrer" target="_blank">borrowing costs</a>, you may be wondering what the future holds for them. Unfortunately, there’s no easy way to answer that question because mortgage rates are notoriously hard to <a href="https://www.mykcm.com/2023/07/05/two-questions-to-ask-yourself-if-youre-considering-buying-a-home/" rel="noopener noreferrer" target="_blank">forecast</a>.
But, there’s one thing that’s historically a good indicator of what’ll happen with rates, and that’s the relationship between the 30-Year Mortgage Rate and the <a href="https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart" rel="noopener noreferrer" target="_blank">10-Year Treasury Yield</a>. Here’s a graph showing those two metrics since Freddie Mac started keeping mortgage rate <a href="https://www.freddiemac.com/pmms/pmms_archives" rel="noopener noreferrer" target="_blank">records</a> in 1972:
<a href="https://www.mykcm.com/content/images/20230717/20230719-For-50-years-the-30-year-mortgage-rate-has-moved-in-unison-with-the-10-year-treasury-yield.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230717/20230719-For-50-years-the-30-year-mortgage-rate-has-moved-in-unison-with-the-10-year-treasury-yield.png" /></a>
As the graph shows, historically, the average spread between the two over the last 50 years was 1.72 percentage points (also commonly referred to as 172 basis points). If you look at the trend line you can see when the Treasury Yield trends up, mortgage rates will usually respond. And, when the Yield drops, mortgage rates tend to follow. While they typically move in sync like this, the gap between the two has remained about 1.72 percentage points for quite some time. But, what’s crucial to notice is that <a href="https://www.freddiemac.com/pmms" rel="noopener noreferrer" target="_blank">spread</a> is <a href="https://www.wsj.com/market-data/quotes/bond/BX/TMUBMUSD10Y/historical-prices" rel="noopener noreferrer" target="_blank">widening</a> far beyond the norm lately (see graph below):
<a href="https://www.mykcm.com/content/images/20230717/20230719-30-year-fixed-mortgage-rate-and-10-year-treasury-yield.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230717/20230719-30-year-fixed-mortgage-rate-and-10-year-treasury-yield.png" /></a>
If you’re asking yourself: what’s pushing the spread beyond its typical average? It’s primarily because of uncertainty in the financial markets. Factors such as <a href="https://www.mykcm.com/2023/06/23/homeownership-helps-protect-you-from-inflation-infographic/" rel="noopener noreferrer" target="_blank">inflation</a>, other economic drivers, and the policy and decisions from the Federal Reserve (The Fed) are all influencing mortgage rates and a widening spread.
Why Does This Matter for You?
This may feel overly technical and granular, but here’s why <a href="https://www.mykcm.com/2023/06/27/why-homeownership-wins-in-the-long-run/" rel="noopener noreferrer" target="_blank">homebuyers</a> like you should understand the spread. It means, based on the normal historical gap between the two, there’s room for mortgage rates to improve today.
And, experts think that’s what lies ahead as long as inflation continues to cool. As Odeta Kushi, Deputy Chief Economist at First American, <a href="https://blog.firstam.com/economics/mind-the-gap-between-mortgage-rates-and-the-10-year-treasury-yield" rel="noopener noreferrer" target="_blank">explains</a>:
“It’s reasonable to assume that the spread and, therefore, mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal . . . However, it’s unlikely that the spread will return to its historical average of 170 basis points, as some risks are here to stay.”
Similarly, an article from Forbes <a href="https://www.forbes.com/advisor/mortgages/mortgage-interest-rates-forecast/" rel="noopener noreferrer" target="_blank">says</a>:
“Though housing market watchers expect mortgage rates to remain elevated amid ongoing economic uncertainty and the Federal Reserve’s rate-hiking war on inflation, they believe rates peaked last fall and will decline—to some degree—later this year, barring any unforeseen surprises.”
Bottom Line
If you’re either a first-time home buyer or a current homeowner thinking of moving into a home that better fits your current needs, keep on top of what’s happening with mortgage rates and what experts think will happen in the coming months.
2023-08-01T08:30:17-07:002023-08-01T08:31:40-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5645Avoid This Mistake When Buying or Selling
One of the biggest mistake that home buyers and sellers make is not watching the market.
So if you are looking to buy or sell within the next year you need to watch the market.
Register on my website and we will make sure you are informed of what happening in your neighborhood or whats happening around the area you want to live in.
When you are educated on the market you can make faster informed decisions, you can identify a deal and you don’t miss you opportunity to make the move you have been wanting.
<a href="https://bit.ly/AndoraGroupRegister">Register here</a> so we can make your vision a reality. 2023-07-28T09:07:05-07:002023-07-31T06:54:47-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5534Are Home Prices Going Up or Down? That Depends…
Media coverage about what’s happening with home prices can be confusing. A large part of that is due to the type of data being used and what they’re choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here's an explanation of each.
Year-over-Year (Y-O-Y):
This comparison measures the change in home prices from the same month or quarter in the previous year. For example, if you're comparing Y-O-Y home prices for April 2023, you would compare them to the home prices for April 2022.
Y-O-Y comparisons focus on changes over a one-year period, providing a more comprehensive view of long-term trends. They are usually useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating.
Month-over-Month (M-O-M):
This comparison measures the change in home prices from one month to the next. For instance, if you're comparing M-O-M home prices for April 2023, you would compare them to the home prices for March 2023.
Meanwhile, M-O-M comparisons analyze changes within a single month, giving a more immediate snapshot of short-term movements and price fluctuations. They are often used to track immediate shifts in demand and supply, seasonal trends, or the impact of specific events on the housing market.
The key difference between Y-O-Y and M-O-M comparisons lies in the time frame being assessed. Both approaches have their own merits and serve different purposes depending on the specific analysis required.
Why Is This Distinction So Important Right Now?
We’re about to enter a few months when <a href="https://www.mykcm.com/2023/05/12/the-worst-home-price-declines-are-behind-us-infographic/" rel="noopener noreferrer" target="_blank">home prices</a> could possibly be lower than they were the same month last year. April, May, and June of 2022 were three of the best months for home prices in the history of the American housing market. Those same months this year might not measure up. That means, the Y-O-Y comparison will probably show values are depreciating. The <a href="https://cdn.nar.realtor/sites/default/files/documents/ehs-04-2023-breakouts-of-single-family-condo-and-co-op-2023-05-18.pdf" rel="noopener noreferrer" target="_blank">numbers</a> for April seem to suggest that’s what we’ll see in the months ahead (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-comparing-now-to-last-years-record-numbers.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-comparing-now-to-last-years-record-numbers.png" /></a>
That’ll generate troubling headlines that say home <a href="https://www.mykcm.com/2023/06/05/oops-home-prices-didnt-crash-after-all/" rel="noopener noreferrer" target="_blank">values are falling</a>. That’ll be accurate on a Y-O-Y basis. And, those headlines will lead many consumers to believe that home values are currently cascading downward.
However, on a closer look at M-O-M home prices, we can see prices have actually been appreciating for the last several months. Those M-O-M numbers more accurately reflect what’s truly happening with home values: after several months of depreciation, it appears we’ve hit bottom and are bouncing back.
Here’s an example of M-O-M home price movements for the last 16 months from the CoreLogic Home Price Insights <a href="https://www.corelogic.com/tag/home-price-index/" rel="noopener noreferrer" target="_blank">report</a> (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-home-prices-appear-to-have-bottomed-out.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230609/20230612-home-prices-appear-to-have-bottomed-out.png" /></a>
Why Does This Matter to You?
So, if you’re hearing negative headlines about home prices, remember they may not be painting the full picture. For the next few months, we’ll be comparing prices to last year’s record peak, and that may make the Y-O-Y comparison feel more negative. But, if we look at the more immediate, M-O-M trends, we can see home prices are actually on the way <a href="https://www.mykcm.com/2023/05/16/the-worst-home-price-declines-are-behind-us/" rel="noopener noreferrer" target="_blank">back up</a>.
There’s an advantage to buying a home now. You’ll buy at a discount from last year’s price and before prices start to pick up even more momentum. It’s called “buying at the bottom,” and that’s a good thing.
Bottom Line
If you have questions about what’s happening with home prices, or if you’re ready to buy before prices climb higher, let’s connect.
2023-06-22T06:34:07-07:002023-06-22T06:35:43-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5526This Real Estate Market Is the Strongest of Our Lifetime
When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point.
1. The Current Mortgage Rate on Existing Mortgages
First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (<a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" rel="noopener noreferrer" target="_blank">FHFA</a>), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-current-rate-on-existing-mortgages.png" /></a>
Now, there’s a lot of talk in the media about a potential <a href="https://www.mykcm.com/2023/04/27/why-todays-foreclosure-numbers-are-nothing-like-2008/" rel="noopener noreferrer" target="_blank">foreclosure</a> crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can't go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they <a href="https://www.mykcm.com/2023/05/04/how-homeowners-win-when-they-downsize/" rel="noopener noreferrer" target="_blank">downsize</a>, with today’s higher mortgage rates, it could cost more.
Here's why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.
2. The Amount of Homeowner Equity
Second, Americans are sitting on tremendous equity right now. According to the <a href="https://data.census.gov/cedsci/all?q=mortgage" rel="noopener noreferrer" target="_blank">Census</a> and <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q1-2023-u-s-home-equity-and-underwater-report/" rel="noopener noreferrer" target="_blank">ATTOM</a>, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230608/20250608-americans-sitting-on-tremendous-equity.png" /></a>
In the industry, the term for this is <a href="https://www.mykcm.com/2023/05/15/homeowners-have-incredible-equity-to-leverage-right-now/" rel="noopener noreferrer" target="_blank">equity</a> rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.
But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.
Bottom Line
We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.
2023-06-20T08:32:15-07:002023-06-20T08:33:29-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5392Confused About the Housing Market? Lean on a Professional!
Thinking about buying or selling a home this year?
If so, I bet you want to know what's really going on with things like home prices, mortgage rates, and more. That's a lot to try to figure out on your own, especially when the headlines in the media can be pretty confusing.
But here's the thing - you don't have to figure this stuff out on your own. Local experts can help you separate fact from fiction. We explain what's really going on in the market. And when it's time for you to make your move, I can walk you through what today's trends mean for your goals.
The next time you have questions about the housing market, let me help you with the answers. I'll pair my expertise with data you can trust so you have everything you need to know about our local area.
Don't let confusing headlines impact your plans. <a href="https://www.andorarealtygroup.com/contact/">Let's chat</a> today so you can get the best answers to your questions.2023-05-10T06:58:21-07:002023-05-10T07:02:15-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5386Why Today’s Housing Market Is Not About To Crash
There’s been some concern lately that the housing market is headed for a crash. And given some of the <a href="https://www.mykcm.com/2023/04/26/the-three-factors-affecting-home-affordability-today/" rel="noopener noreferrer" target="_blank">affordability</a> challenges in the housing market, along with a lot of <a href="https://www.mykcm.com/2023/05/02/a-recession-doesnt-equal-a-housing-crisis-2/" rel="noopener noreferrer" target="_blank">recession</a> talk in the media, it’s easy enough to understand why that worry has come up.
But the data clearly shows today’s market is very different than it was before the housing crash in 2008. Rest assured, this isn’t a repeat of what happened back then. Here’s why.
It’s Harder To Get a Loan Now
It was much easier to get a home loan during the lead-up to the 2008 housing crisis than it is today. Back then, banks had different lending standards, making it easy for just about anyone to qualify for a home loan or refinance an existing one. As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices.
Things are different today as purchasers face increasingly higher standards from mortgage companies. The graph below uses <a href="https://www.mba.org/news-and-research/newsroom/news/2023/04/11/mortgage-credit-availability-increased-in-march" rel="noopener noreferrer" target="_blank">data</a> from the Mortgage Bankers Association (MBA) to show this difference. The lower the number, the harder it is to get a mortgage. The higher the number, the easier it is.
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-lending-regulations-are-steady.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-lending-regulations-are-steady.png" /></a>Unemployment Recovered Faster This Time
While the pandemic caused unemployment to spike over the last couple of years, the jobless rate has already recovered back to pre-pandemic levels (see the blue line in the graph below). Things were different during the Great Recession as a large number of people stayed <a href="https://fred.stlouisfed.org/series/UNRATE" rel="noopener noreferrer" target="_blank">unemployed</a> for a much longer period of time (see the red in the graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-length-of-crisis-different-than-last-time.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-length-of-crisis-different-than-last-time.png" /></a>
Here’s how the quick job recovery this time helps the housing market. Because so many people are employed today, there’s less risk of homeowners facing hardship and defaulting on their loans. This helps put today’s housing market on stronger footing and reduces the risk of more foreclosures coming onto the market.
There Are Far Fewer Homes for Sale Today
There were also too many homes for sale during the housing crisis (many of which were short sales and <a href="https://www.mykcm.com/2023/04/27/why-todays-foreclosure-numbers-are-nothing-like-2008/" rel="noopener noreferrer" target="_blank">foreclosures</a>), and that caused prices to fall dramatically. Today, there’s a shortage of inventory available overall, primarily due to years of underbuilding homes.
The graph below uses data from the <a href="https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales" rel="noopener noreferrer" target="_blank">National Association of Realtors</a> (NAR) and the <a href="https://fred.stlouisfed.org/series/HOSSUPUSM673N" rel="noopener noreferrer" target="_blank">Federal Reserve</a> to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 2.6-months’ supply. There just isn’t enough inventory on the market for home prices to come crashing down like they did in 2008.
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-housing-supply-is-lower-than-before.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-housing-supply-is-lower-than-before.png" /></a>
Equity Levels Are Near Record Highs
That low inventory of homes for sale helped keep upward pressure on home prices over the course of the pandemic. As a result, homeowners today have near-record amounts of equity (see graph below):
<a href="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-americans-have-record-amounts-of-equity.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230508/20230509-americans-have-record-amounts-of-equity.png" /></a>
And, that equity puts them in a much stronger position <a href="https://fred.stlouisfed.org/series/OEHRENWBSHNO#0" rel="noopener noreferrer" target="_blank">compared</a> to the Great Recession. Molly Boesel, Principal Economist at CoreLogic, <a href="https://www.corelogic.com/intelligence/loan-performance-insights-january-2023/" rel="noopener noreferrer" target="_blank">explains</a>:
“Most homeowners are well positioned to weather a shallow recession. More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments.”
Bottom Line
The graphs above should ease any fears you may have that today’s housing market is headed for a crash. The most current data clearly shows that today’s market is nothing like it was last time.
2023-05-09T10:22:31-07:002023-05-09T10:23:54-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5366A Recession Doesn’t Equal a Housing Crisis
Everywhere you look, people are talking about a potential recession. And if you’re planning to buy or sell a house, this may leave you wondering if your plans are still a wise move. To help ease your mind, experts are saying that if we do officially enter a recession, it’ll be mild and short. As the Federal Reserve <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20230322.pdf" rel="noopener noreferrer" target="_blank">explained</a> in their March meeting:
“. . . the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years.”
While a recession may be on the horizon, it won’t be one for the housing market record books like the crash in 2008. What we have to remember is that a recession doesn’t always lead to a housing crisis.
To prove it, let’s look at the historical data of what happened in real estate during previous recessions. That way you know why you shouldn’t be afraid of what a recession could mean for the housing market today.
A Recession Doesn’t Mean Falling Home Prices
To show that home prices don’t fall every time there’s a recession, it helps to turn to <a href="https://www.thebalance.com/the-history-of-recessions-in-the-united-states-3306011" rel="noopener noreferrer" target="_blank">historical data</a>. As the graph below illustrates, looking at recessions going all the way back to 1980, home prices appreciated in four of the last six of them. So historically, when the economy slows down, it doesn’t mean home values will always fall.
<a href="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-does-not-mean-falling-prices.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-does-not-mean-falling-prices.png" /></a>
Most people remember the housing crisis in 2008 (the larger of the two red bars in the graph above) and think another recession will be a repeat of what happened to housing then. But today’s housing market isn’t about to crash because the fundamentals of the market are different than they were in 2008. Back then, one of the big reasons why prices fell was because there was a surplus of homes for sale at the same time distressed properties flooded the market. Today, the number of homes for sale is low, so while home prices may see slight declines in some areas and slight gains in others, a crash simply isn’t in the cards.
A Recession Means Falling Mortgage Rates
What a recession really means for the housing market is falling mortgage rates. As the graph below shows, <a href="https://mtg-specialists.com/recession-interest-rates-and-real-estate/" rel="noopener noreferrer" target="_blank">historically</a>, each time the economy slowed down, mortgage rates decreased.
<a href="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-means-falling-mortgage-rates.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content-images-20230428-20230502-a-recession-means-falling-mortgage-rates.png" /></a>
Bankrate <a href="https://www.bankrate.com/real-estate/buying-home-during-recession/" rel="noopener noreferrer" target="_blank">explains</a> mortgage rates typically fall during an economic slowdown:
“During a traditional recession, the Fed will usually lower interest rates. This creates an incentive for people to spend money and stimulate the economy. It also typically leads to more affordable mortgage rates, which leads to more opportunity for homebuyers.”
This year, <a href="https://www.mykcm.com/2023/04/03/how-changing-mortgage-rates-can-affect-you/" rel="noopener noreferrer" target="_blank">mortgage rates</a> have been quite volatile as they’ve responded to high inflation. The 30-year <a href="https://www.freddiemac.com/pmms/archive" rel="noopener noreferrer" target="_blank">fixed mortgage rate</a> has hovered between roughly 6-7%, and that’s impacted <a href="https://www.mykcm.com/2023/04/26/the-three-factors-affecting-home-affordability-today/" rel="noopener noreferrer" target="_blank">affordability</a> for many potential homebuyers.
But, if there is a recession, history tells us mortgage rates may fall below that threshold, even though the days of 3% are behind us.
Bottom Line
You don’t need to fear what a recession means for the housing market. If we do have a recession, experts say it will be mild and short, and history shows it also means mortgage rates go down.
2023-05-04T11:04:22-07:002023-05-04T11:05:56-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5294Is the Housing Market Heading for a Crash?
Worried the housing market is headed for a crash? You aren't alone. Two in three Americans think there’ll be a crash in the next few years.
But here's the reality: a crash like we saw in 2008 is far from likely and here's why: Today's housing market isn't like it was fifteen years ago.
First of all it was much easier to get a home loan back them. Mortgage standards are much tighter now, which means buyers are more qualified.
Second there are fewer foreclosures happening today. Because buyers are more qualified, homeowners are less likely to default on their loans.
And third, back then, there were far more homes for sale compared to the number of buyers in the market. That's one reason why home prices have started to drop.
Now, there are too few homes on the market, mainly due to under-building. And thats a key reason why home prices are still strong.
When we look at the facts, it's clear today's housing market is very different from last time, so there is no need to fear a crash.2023-04-18T07:43:17-07:002023-04-18T07:48:53-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5263Why Aren’t Home Prices Crashing?
There have been a lot of shifts in the housing market recently. Mortgage rates rose dramatically last year, impacting many people’s ability to buy a home. And after several years of rapid price appreciation, home prices finally peaked last summer. These changes led to a rise in headlines saying prices would end up crashing.
Even though we’re no longer seeing the buyer frenzy that drove home values up during the pandemic, prices have been relatively flat at the national level. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), doesn’t <a href="https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/" rel="noopener noreferrer" target="_blank">expect</a> that to change:
“[H]ome prices will be steady in most parts of the country with a minor change in the national median home price.”
You might think sellers would have to lower prices to attract buyers in today’s market, and that’s part of why some may have been waiting for prices to come crashing down. But there’s another factor at play – low inventory. And <a href="https://www.bankrate.com/real-estate/is-the-housing-market-about-to-crash/" rel="noopener noreferrer" target="_blank">according</a> to Yun, that’s limiting just how low prices will go:
“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”
As you can see in the graph below, we’ve been at or near record-low inventory levels for a few years now.
<a href="https://files.keepingcurrentmatters.com/content/images/20230404/20230405-months-inventory-of-homes-for-sale-MEM.png" rel="noopener noreferrer" target="_blank"><img src="https://files.keepingcurrentmatters.com/content/images/20230404/20230405-months-inventory-of-homes-for-sale-MEM.png" /></a>
That lack of available homes on the market is putting upward pressure on <a href="https://www.mykcm.com/2023/03/20/whats-ahead-for-home-prices-in-2023/" rel="noopener noreferrer" target="_blank">prices</a>. Bankrate <a href="https://www.bankrate.com/real-estate/is-the-housing-market-about-to-crash/#crash" rel="noopener noreferrer" target="_blank">puts</a> it like this:
“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”
If more homes don’t come to the market, a lack of supply will keep prices from crashing, and, <a href="https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/" rel="noopener noreferrer" target="_blank">according</a> to industry expert Rick Sharga, inventory isn’t likely to rise significantly this year:
“I believe that we’re likely to see low inventory continue to vex the housing market throughout 2023.”
Sellers are under no pressure to move since they have plenty of equity right now. That equity acts as a cushion for homeowners, lowering the chances of distressed sales like foreclosures and short sales. And with many homeowners locked into low mortgage rates, that equity cushion isn’t going anywhere soon.
With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.
Bottom Line
A lot of people expected prices would crash this year thanks to low buyer demand, but that isn’t happening. Why? There aren’t enough homes for sale. If you’re thinking about moving this spring, let’s connect.
2023-04-07T08:46:34-07:002023-04-07T08:48:51-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5195Market Watch
One of the biggest mistake that home buyers and sellers make is not watching the market.
So if you are looking to buy or sell within the next year you need to watch the market.
Register on my website and we will make sure you are informed of what happening in your neighborhood or whats happening around the area you want to live in.
When you are educated on the market you can make faster informed decisions, you can identify a deal and you don’t miss you opportunity to make the move you have been wanting.
<a href="https://bit.ly/AndoraGroupRegister">Click here</a> so we can make your vision a reality. 2023-03-15T07:18:06-07:002023-03-15T07:21:52-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5130The Two Big Issues the Housing Market’s Facing Right NowThe biggest challenge the housing market’s facing is how few homes there are for sale. Mark Fleming, Chief Economist at First American, <a href="https://blog.firstam.com/economics/why-housing-market-potential-increased-for-the-second-straight-month" title="explains" target="_blank" rel="noopener noreferrer">explains</a> the root causes of today’s low supply:
“Two dynamics are keeping existing-home inventory historically low – rate-locked existing homeowners and the fear of not finding something to buy.”
Let’s break down these two big issues in today’s housing market.
Rate-Locked Homeowners
According to the Federal Housing Finance Agency (FHFA), the <a href="https://www.fhfa.gov/DataTools/Downloads/Pages/National-Mortgage-Database-Aggregate-Data.aspx" title="average interest rate" target="_blank" rel="noopener noreferrer">average interest rate</a> for current homeowners with mortgages is less than 4% (see graph below):
<a href="https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" width="960" height="720" class="aligncenter wp-image-107542" src="https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM.png" srcset="https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM.png 960w, https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM-600x450.png 600w, https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM-768x576.png 768w, https://files.mykcm.com/2023/02/16150439/average-mortgage-rate-is-less-than-4-percent-MEM-100x75.png 100w" sizes="(max-width: 960px) 100vw, 960px" /></a>
But today, the typical mortgage rate offered to buyers is <a href="https://www.freddiemac.com/pmms" title="over 6%" target="_blank" rel="noopener noreferrer">over 6%</a>. As a result, many homeowners are opting to stay put instead of moving to another home with a higher borrowing cost. This is a situation known as being rate locked.
When so many homeowners are rate locked and reluctant to sell, it’s a challenge for a housing market that needs more inventory. However, experts project <a href="https://www.mykcm.com/2023/01/17/think-twice-before-waiting-for-3-mortgage-rates/" title="mortgage rates">mortgage rates</a> will gradually fall this year, and that could mean more people will be willing to move as that happens.
The Fear of Not Finding Something To Buy
The other factor holding back potential sellers is the fear of not finding another home to buy if they move. Worrying about where they’ll go has left many on the sidelines as they wait for more homes to come to the market. That’s why, if you’re on the fence about selling, it’s important to consider all your <a href="https://www.mykcm.com/2023/01/30/where-will-you-go-if-you-sell-you-have-options/" title="options">options</a>. That includes newly built homes, especially right now when builders are offering concessions like mortgage rate <a href="https://www.mykcm.com/2023/2/15/should-you-consider-buying-a-newly-built-home/" title="buydowns">buydowns</a>.
What Does This Mean for You?
These two issues are keeping the supply of homes for sale lower than pre-pandemic levels. But if you want to sell your house, today’s market is a <a href="https://www.mykcm.com/2023/2/17/the-spring-housing-market-could-be-a-sweet-spot-for-sellers-infographic" title="sweet spot">sweet spot</a> that can work to your advantage.
Be sure to work with a local real estate professional to explore the options you have right now, which could include leveraging your current home equity. According to <a href="https://www.attomdata.com/news/market-trends/home-sales-prices/attom-q4-2022-u-s-home-equity-and-underwater-report/" title="ATTOM" target="_blank" rel="noopener noreferrer">ATTOM</a>:
“. . . 48 percent of mortgaged residential properties in the United States were considered equity-rich in the fourth quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than 50 percent of their estimated market values.”
This could make a major difference when you move. Work with a local real estate expert to learn how putting your equity to work can keep the cost of your next home down.
Bottom Line
Rate-locked homeowners and the fear of not finding something to buy are keeping housing inventory low across the country. But as mortgage rates start to come down this year and homeowners explore all their options, we should expect more homes to come to the market.2023-02-22T07:45:41-07:002023-02-22T07:48:40-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5127The Spring Housing Market Could Be a Sweet Spot for Sellers<img src="https://assets.site-static.com/userfiles/2365/image/The-Spring-Housing-Market-Could-Be-A-Sweet-Spot-For-Sellers-MEM.png" width="1300" height="3025" />
Some Highlights:
The <a href="https://www.mykcm.com/2023/02/08/number-of-homes-for-sale-up-from-last-year-but-below-pre-pandemic-years/" title="biggest challenge">biggest challenge</a> in the housing market is how few houses there are for sale compared to the number of people who want to buy.
The number of <a href="https://www.realtor.com/research/january-2023-data/" title="homes for sale" target="_blank" rel="noopener noreferrer">homes for sale</a> is up from last year but below pre-pandemic numbers, and that means we’re still in a sellers’ market.
The housing market needs more homes for sale to meet the demand of today’s buyers. If you’ve thought about <a href="https://www.mykcm.com/2023/02/06/the-top-reasons-for-selling-your-house/" title="selling">selling</a>, let’s connect today.
2023-02-21T09:37:58-07:002023-02-21T09:41:51-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5124Wondering What’s Going on with Home Prices?The recent changes in home prices are top of mind for many as the <a href="https://www.mykcm.com/2023/02/02/experts-forecast-a-turnaround-in-the-housing-market-in-2023/" title="housing market">housing market</a> begins gearing up for spring. It can be hard to navigate misleading headlines and confusing data, so here’s what you should know about today’s home prices.
Local price trends still vary by market. But looking at national data, Nataliya Polkovnichenko, Ph.D., Supervisory Economist at the Federal Housing Finance Agency (FHFA), <a href="https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA-HPI-Monthly-1312023.pdf" title="explains" target="_blank" rel="noopener noreferrer">explains</a>:
“U.S. house prices were largely unchanged in the last four months and remained near the peak levels reached over the summer of 2022. While higher mortgage rates have suppressed demand, low inventories of homes for sale have helped maintain relatively flat house prices.”
Month-over-month home price changes can be seen in the chart below. The data also shows that price depreciation peaked around August. Since then, any depreciation has been even milder. In other words, today’s home prices aren’t in a freefall.
<a href="https://files.mykcm.com/2023/02/15123720/us-house-prices-largely-unchanged-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" width="960" height="720" class="aligncenter wp-image-107489" src="https://files.mykcm.com/2023/02/15123720/us-house-prices-largely-unchanged-MEM.png" srcset="https://files.mykcm.com/2023/02/15123720/us-house-prices-largely-unchanged-MEM.png 960w, https://files.mykcm.com/2023/02/15123720/us-house-prices-largely-unchanged-MEM-600x450.png 600w, https://files.mykcm.com/2023/02/15123720/us-house-prices-largely-unchanged-MEM-768x576.png 768w, https://files.mykcm.com/2023/02/15123720/us-house-prices-largely-unchanged-MEM-100x75.png 100w" sizes="(max-width: 960px) 100vw, 960px" /></a>
What Does This Mean for You?
If you currently own your house, you may be concerned about even the <a href="https://www.mykcm.com/2023/02/09/why-todays-housing-market-isnt-headed-for-a-crash/" title="smallest decline">smallest decline</a> in prices. But keep in mind how much home values grew over the last few years. Compared to that growth, any declines we’re seeing nationally are likely to be minimal. Selma Hepp, Chief Economist at CoreLogic, <a href="https://www.cnbc.com/2023/02/10/home-prices-mortgage-rates-fall.html" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“. . . while prices continued to fall from November, the rate of decline was lower than that seen in the summer and still adds up to only a 3% cumulative drop in prices since last spring’s peak.”
It’s also important to remember that every local market is different. That’s why it’s essential to lean on an expert for the latest information on the home prices in your area if you’re planning to make a move this spring.
Bottom Line
To understand what’s going on with home prices in our market and how they could impact your goals, let’s connect today.2023-02-20T08:27:07-07:002023-02-20T08:28:17-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5101Why Today’s Housing Market Isn’t Headed for a Crash<a href="https://www.nerdwallet.com/article/mortgages/2023-home-buyer-report" title="67%" target="_blank" rel="noopener noreferrer">67%</a> of Americans say a housing market crash is imminent in the next three years. With all the talk in the media lately about shifts in the housing market, it makes sense why so many people feel this way. But there’s good news. Current data shows <a href="https://www.mykcm.com/2023/02/02/experts-forecast-a-turnaround-in-the-housing-market-in-2023/" title="today’s market">today’s market</a> is nothing like it was before the housing crash in 2008.
Back Then, Mortgage Standards Were Less Strict
During the lead-up to the housing crisis, it was much easier to get a home loan than it is today. Banks were creating artificial demand by lowering lending standards and making it easy for just about anyone to qualify for a home loan or refinance an existing one.
As a result, lending institutions took on much greater risk in both the person and the mortgage products offered. That led to mass defaults, foreclosures, and falling prices. Today, things are different, and purchasers face much higher standards from mortgage companies.
The graph below uses <a href="https://www.mba.org/news-and-research/newsroom/news/2023/01/10/mortgage-credit-availability-decreased-in-december" title="data" target="_blank" rel="noopener noreferrer">data</a> from the Mortgage Bankers Association (MBA) to help tell this story. In this index, the higher the number, the easier it is to get a mortgage. The lower the number, the harder it is.
<a href="https://files.mykcm.com/2023/02/08135553/lending-regulations-remain-stable-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" width="960" height="720" class="aligncenter wp-image-107334" src="https://files.mykcm.com/2023/02/08135553/lending-regulations-remain-stable-MEM.png" srcset="https://files.mykcm.com/2023/02/08135553/lending-regulations-remain-stable-MEM.png 960w, https://files.mykcm.com/2023/02/08135553/lending-regulations-remain-stable-MEM-600x450.png 600w, https://files.mykcm.com/2023/02/08135553/lending-regulations-remain-stable-MEM-768x576.png 768w, https://files.mykcm.com/2023/02/08135553/lending-regulations-remain-stable-MEM-100x75.png 100w" sizes="(max-width: 960px) 100vw, 960px" /></a>
This graph also shows just how different things are today compared to the spike in credit availability leading up to the crash. Tighter lending standards have helped prevent a situation that could lead to a wave of foreclosures like the last time.
Foreclosure Volume Has Declined a Lot Since the Crash
Another difference is the number of homeowners that were facing foreclosure when the housing bubble burst. Foreclosure activity has been <a href="https://www.mykcm.com/2023/01/25/why-you-shouldnt-fear-todays-foreclosure-headlines/" title="lower">lower</a> since the crash, largely because buyers today are more qualified and less likely to default on their loans. The graph below uses <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-year-end-2022-u-s-foreclosure-market-report/" title="data" target="_blank" rel="noopener noreferrer">data</a> from ATTOM to show the difference between last time and now:
<a href="https://files.mykcm.com/2023/02/08135922/foreclosure-starts-past-and-present-MEM-1.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" width="960" height="720" class="aligncenter wp-image-107335" src="https://files.mykcm.com/2023/02/08135922/foreclosure-starts-past-and-present-MEM-1.png" srcset="https://files.mykcm.com/2023/02/08135922/foreclosure-starts-past-and-present-MEM-1.png 960w, https://files.mykcm.com/2023/02/08135922/foreclosure-starts-past-and-present-MEM-1-600x450.png 600w, https://files.mykcm.com/2023/02/08135922/foreclosure-starts-past-and-present-MEM-1-768x576.png 768w, https://files.mykcm.com/2023/02/08135922/foreclosure-starts-past-and-present-MEM-1-100x75.png 100w" sizes="(max-width: 960px) 100vw, 960px" /></a>
So even as foreclosures tick up, the total number is still very low. And on top of that, most experts don’t expect foreclosures to go up drastically like they did following the crash in 2008. Bill McBride, Founder of Calculated Risk, <a href="https://calculatedrisk.substack.com/p/the-housing-bubble-and-mortgage-debt-76d" title="explains" target="_blank" rel="noopener noreferrer">explains</a> the impact a large increase in foreclosures had on home prices back then – and how that’s unlikely this time.
“The bottom line is there will be an increase in foreclosures over the next year (from record level lows), but there will not be a huge wave of distressed sales as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.”
The Supply of Homes for Sale Today Is More Limited
For historical context, there were too many homes for sale during the housing crisis (many of which were short sales and foreclosures), and that caused prices to fall dramatically. Supply has increased since the start of this year, but there’s still a <a href="https://www.mykcm.com/2023/02/08/number-of-homes-for-sale-up-from-last-year-but-below-pre-pandemic-years/" title="shortage of inventory">shortage of inventory</a> available overall, primarily due to years of underbuilding homes.
The graph below uses <a href="https://www.nar.realtor/sites/default/files/documents/ehs-12-2022-overview-2023-01-20.pdf" title="data" target="_blank" rel="noopener noreferrer">data</a> from the National Association of Realtors (NAR) to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just 2.7-months’ supply at the current sales pace, which is significantly lower than the last time. There just isn’t enough inventory on the market for home prices to come crashing down like they did last time, even though some overheated markets may experience slight declines.
<a href="https://files.mykcm.com/2023/02/08135550/housing-supply-is-lower-than-last-time-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" width="960" height="720" class="aligncenter wp-image-107332" src="https://files.mykcm.com/2023/02/08135550/housing-supply-is-lower-than-last-time-MEM.png" srcset="https://files.mykcm.com/2023/02/08135550/housing-supply-is-lower-than-last-time-MEM.png 960w, https://files.mykcm.com/2023/02/08135550/housing-supply-is-lower-than-last-time-MEM-600x450.png 600w, https://files.mykcm.com/2023/02/08135550/housing-supply-is-lower-than-last-time-MEM-768x576.png 768w, https://files.mykcm.com/2023/02/08135550/housing-supply-is-lower-than-last-time-MEM-100x75.png 100w" sizes="(max-width: 960px) 100vw, 960px" /></a>
Bottom Line
If recent headlines have you worried we’re headed for another housing crash, the data above should help ease those fears. Expert insights and the most current data clearly show that today’s market is nothing like it was last time.2023-02-13T08:37:26-07:002023-02-13T08:40:51-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:5091How Experts Can Help Close the Gap in Today’s Homeownership RateAs we celebrate Black History Month, we reflect on the past and present experiences of Black Americans. This includes the path toward investing in a home of their own. And while equitable access to housing has come a long way, homeownership can be a steeper climb for households of color. It’s an important experience to talk about, along with how it can make all the difference for diverse homebuyers to work with the right real estate experts.
We know it’s more challenging for some to <a href="https://www.mykcm.com/2023/01/24/the-3-factors-that-affect-home-affordability/" title="buy a home">buy a home</a> because there’s still a measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, the lowest homeownership rate persists in the Black community (see graph below):
<a href="https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM.png" rel="noopener noreferrer" class="use_kcm_lightbox" target="_blank"><img loading="lazy" width="960" height="720" class="aligncenter wp-image-107290" src="https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM.png" srcset="https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM.png 960w, https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM-600x450.png 600w, https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM-768x576.png 768w, https://files.mykcm.com/2023/02/06143109/20230207-Homeownership-Rate-MEM-100x75.png 100w" sizes="(max-width: 960px) 100vw, 960px" /></a>
Homeownership is an essential piece for building household wealth that can be passed down to future generations. However, there are obstacles in the <a href="https://www.mykcm.com/2023/02/03/you-may-not-need-as-much-as-you-think-for-your-down-payment-infographic/" title="homebuying">homebuying</a> process that can negatively impact certain groups. This can delay or prevent many from achieving homeownership, challenging their ability to benefit from everything owning a home offers. A <a href="https://www.nar.realtor/sites/default/files/documents/2022-snapshot-of-race-and-home-buying-in-the-us-04-26-2022.pdf" title="recent report" target="_blank" rel="noopener noreferrer">recent report</a> from the National Association of Realtors (NAR) explains:
“. . . not all [households] have the same opportunities to homeownership, with many of them facing more constraints in their effort to achieve the American Dream. . . . Given that homeownership contributes to wealth accumulation and the homeownership rate is lower in minority groups, data shows that the net worth for these groups is also lower.”
However, with the right support and resources, there are solutions if you’re part of this community and planning to <a href="https://www.mykcm.com/2023/01/19/pre-approval-in-2023-what-you-need-to-know/" title="buy a home">buy a home</a>. Jacob Channel, Senior Economist at LendingTree, <a href="https://www.cnbc.com/2022/08/27/black-borrowers-mortgage-denial-rate-twice-that-of-overall-population.html" title="shares" target="_blank" rel="noopener noreferrer">shares</a>:
“The problem does exist. We have data that back that up. But there are solutions, and Black homebuyers shouldn’t lose faith that they’ll never be able to become homeowners.”
That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process. These professionals aren’t only experienced advisors who understand the local <a href="https://www.mykcm.com/2023/01/17/think-twice-before-waiting-for-3-mortgage-rates/" title="market">market</a> and give the best advice. They’re also compassionate allies who will advocate for your best interests every step of the way.
Bottom Line
Access to housing improves every day, but there are still equity challenges that some buyers face. <a href="https://www.andorarealtygroup.com/contact/">Let’s connect</a> to make sure you have an advocate on your side as you walk the path to homeownership.2023-02-09T07:30:06-07:002023-02-09T07:32:39-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:4886Not the 2007 Crash
This market is not like the 2007 market crash.
Some people feel like the 2-1 buy down is going back to the 2007 market and the same mistakes we made back then.
Watch Ronald Stanley explain the difference in today’s market. 2022-12-15T06:06:42-07:002022-12-15T06:08:43-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:4851Mortgage Rates
Let me introduce Ron Stanley! He's the VP of mortgage lending at Guaranteed Rate.
Ron has 15 years of experience. Guaranteed Rate is the second largest retail mortgage lender in the country.
Watch our video as Ron explains some predictions for the mortgage industry.
Mellanda Reese | 404.217.6005
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2022-12-05T08:20:56-07:002022-12-05T08:31:58-07:00Mellanda Reesetag:andorarealtygroup.com,2012-09-20:4774How's the Market?
How's the Market?
The burning question that is on everyone's mind!
How is the real estate market?
What's stopping you from selling your home or buying a home?
What are some of your concerns? Contact me today and let's talk!
Mellanda Reese | 404.217.6005
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2022-11-11T07:38:33-07:002022-11-11T07:49:45-07:00Mellanda Reese