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The stats finally caught up! Year-over-year appreciation is a whomping 19% with a majority of that realized in 2024. BUT we aren’t quite at the peak of 2022…I anticipate appreciation to slow and prices to level out for the rest of the year, but time will tell. At 0.6 months supply of inventory, there simply aren’t enough homes for buyers and supply/demand is what drives prices. But, with prices increasing and no relief in interest rates, affordability is an issue that will slow many buyers.
Mortgage Rates •
April 16, 2024
Should I Move with Today’s Mortgage Rates?
When mortgage rates spiked up over the last few years, some homeowners put their plans to move on pause. Maybe you did too because you didn’t want to sell and take on a higher mortgage rate for your next home. But is that still the right strategy for you?
In today’s market, data shows more homeowners are getting used to where rates are and thinking it may be time to move. As Mark Zandi, Chief Economist at Moody’s Analytics, explains:
“Listings are up a bit as life events and job changes are putting increasing pressure on locked-in homeowners to sell their homes. Homeowners may also be slowly coming to the realization that mortgage rates aren’t going back anywhere near the rate on their existing mortgage.”
A recent study from Bank of America sheds light on some of the things homeowners say would make them sell, even with rates where they are right now (see visual below):
What Would Motivate You To Move?
Now that you know why other people would move, take a minute to think about what would make a move worth it for you. Is it time to take a chance and go for your dream job, even though it’s not local? Are you looking for a neighborhood that has more to offer and a close-knit sense of community? Maybe you just need more space, you’re looking for your next great adventure, or you want a house that opens up rental opportunities to pad your income.
And here’s something else to consider. Mortgage rates are still expected to go down over the course of the year. And once that happens, there’s going to be a big rush of buyers jumping back into the market. While you could delay your plans until rates drop, you’ll only have more competition with those buyers if you do.
So, does that mean it’s worth it to move now, even with rates where they are? The answer is: that it depends.
You’ll want to consider today’s mortgage rates, where they’re expected to go from here, and what would prompt you to want to make a change as you decide on your next steps. An expert can help with that.
Bottom Line
Other homeowners are getting used to rates and deciding to move. Let’s chat to go over what matters most to you and if it’s time for you to jump back into the market too.
Market Advice • Real Estate Forecast •
April 9, 2024
Boomers Moving Will Be More Like a Gentle Tide Than a Tsunami
Have you heard the term “Silver Tsunami” getting tossed around recently? If so, here’s what you really need to know. That phrase refers to the idea that a lot of baby boomers are going to move or downsize all at once. And the fear is that a sudden influx of homes for sale would have a big impact on housing. That’s because it would create a whole lot more competition for smaller homes and would throw off the balance of supply and demand, which ultimately would impact home prices.
But here’s the thing. There are a couple of faults in that logic. Let’s break them down and put your mind at ease.
Not All Baby Boomers Plan To Move
For starters, plenty of baby boomers don’t plan on moving at all. A study from the AARP says more than half of adults aged 65 and older want to stay in their homes and not move as they age (see graph below):
While it’s true circumstances may change and some people who don’t plan to move (the red in the chart above) may realize they need to down the road, the vast majority are counting on aging in place.
As for those who stay put, they’ll likely modify their homes as their needs change over time. And when updating their existing home won’t work, some will buy a second home and keep their original one as an investment to fuel generational wealth for their loved ones. As an article from Inman explains:
“Many boomers have no desire to retire fully and take up less space . . . Many will modify their current home, and the wealthiest will opt to have multiple homes.”
Even Those Who Do Move Won’t Do It All at Once
While not all baby boomers are looking to sell their homes and move – the ones who do won’t all do it at the same time. Instead, it’ll happen slowly over many years. As Freddie Mac says:
“We forecast the ‘tsunami’ will be more like a tide, bringing a gradual exit of 9.2 million Boomers by 2035 . . .”
As Mark Fleming, Chief Economist at First American, says:
“Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they’re going to take about two decades to work their way through.”
Bottom Line
If you’re stressed about a Silver Tsunami shaking the housing market overnight, don’t be. Baby boomers will move slowly over a much longer period of time.
Mortgage Rates •
April 2, 2024
What’s the Latest with Mortgage Rates?
Recent headlines may leave you wondering what’s next for mortgage rates. Maybe you’d previously heard there were going to be cuts this year that would bring rates down. That refers to the Federal Reserve (the Fed) and what they do to their Fed Funds Rate. While cutting, or lowering, the Fed Funds Rate doesn’t directly determine mortgage rates, it does tend to impact them. But when the Fed met last week, a cut didn’t happen — at least, not yet.
There are a lot of factors the Fed considered in their recent decision and most of them are complex. But you don’t need to be bogged down by those finer details. What you really want is the answer to this question: does that mean mortgage rates aren’t going to fall? Here’s what you need to know.
Mortgage Rates Are Still Expected To Drop This Year
While it hasn’t happened yet, that doesn’t mean it won’t. Even Jerome Powell, the Chairman of the Fed, says they still plan to make cuts this year, assuming inflation cools:
“We believe that our policy rate is likely at its peak for this tightening cycle and that, if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.”
When this happens, history shows mortgage rates will likely follow. That means hope isn’t lost. As a recent article from Business Insider explains:
“As inflation comes down and the Fed is able to start lowering rates, mortgage rates should go down, too. . .”
What This Means for You
But you don’t necessarily want to wait for it to happen. Mortgage rates are notoriously hard to forecast. There are so many factors at play and any one of those can change the projections as the economy shifts. And it’s why the experts offer this advice. As Mark Fleming, Chief Economist at First American, says:
“Well, mortgage rate projections are just that, projections, not promises and don’t forget how hard it is to forecast them. . . So my advice is to never try to time the market . . . If one is financially prepared and buying a home aligns with your lifestyle goals, then it could be the right time to purchase. And there’s always the refinance option if mortgage rates are lower in the future.”
Basically, if you’re looking to move and trying to time the market, don’t. If you’re ready, willing, and able to move, it may still be worth it to do it now, especially if you can find the home you’ve been searching for.
Bottom Line
If you’re looking to buy a home, let’s connect so you have someone keeping you up-to-date on mortgage rates and helping you make the best decision possible.
Market Advice •
March 26, 2024
What Are Experts Saying About the Spring Housing Market?
If you’re planning to move soon, you might be wondering if there’ll be more homes to choose from, where prices and mortgage rates are headed, and how to navigate today’s market. If so, here’s what the professionals are saying about what’s in store for this season.
Odeta Kushi, Deputy Chief Economist, First American:
“. . . it seems our general expectation for the spring is that we will see a pickup in inventory. In fact, that already seems to be happening. But it won’t necessarily be enough to satiate demand.”
Lisa Sturtevant, Chief Economist, Bright MLS:
“There is still strong demand, as the large millennial population remains in the prime first-time homebuying range.”
Danielle Hale, Chief Economist, Realtor.com:
“Where we are right now is the best of both worlds. Price increases are slowing, which is good for buyers, and prices are still relatively high, which is good for sellers.”
Skylar Olsen, Chief Economist, Zillow:
“There are slightly more homes for sale than this time last year, and there is still plenty of competition for well-priced houses. Buyers should prep their credit scores and sellers should prep their properties now, attractive listings are going pending in less than a month, and time on market will shrink in the weeks ahead.”
Jiayi Xu, Economist, Realtor.com:
“While mortgage rates remain elevated, home shoppers who are looking to buy this spring could find more affordable homes on the market than they saw at the same time last year. Specifically, there were 20.6% more homes available for sale ranging between $200,000 and $350,000 in February 2024 than a year ago, surpassing growth in other price ranges.”
If you’re looking to sell, this spring might be your sweet spot because there just aren’t many homes on the market. Sure, inventory is rising, but it’s nowhere near enough to meet today’s buyer demand. That’s why they’re still selling so quickly.
If you’re looking to buy, the growing number of homes for sale this spring means you’ll have more choices than this time last year. But be prepared to move quickly since there’ll be plenty of competition with other buyers.
Bottom Line
No matter what you’re planning, let’s team up to confidently navigate the busy spring housing market.
