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Homebuyer Activity Shows Signs of Warming Up for Spring
The spring season appears to be warming up in housing as more and more buyers enter the market. And after rising mortgage rates sidelined so many buyers last year, that’s a good sign for sellers. Realtor.com has the latest:
“Spring is officially here, and like green shoots emerging from the bleak winter, new data suggests that more buyers are back in the market, although more subdued compared to a year ago.”
We know buyer activity is trending up because of mortgage purchase application data. According to Investopedia:
“A mortgage application is a document submitted to a lender when you apply for a mortgage to purchase real estate.”
That means the number of mortgage applications shows how many buyers are applying for mortgages. Put another way, an increase in mortgage applications means an increase in buyer demand – and as Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explains, application activity started ramping up as mortgage rates fell steadily in March:
“Application activity increased as mortgage rates declined . . . recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”
In fact, we can see how mortgage rates have a direct impact on applications over time. As rates rose dramatically last year, applications fell in response (see graph below):
The recent uptick in mortgage applications, as well as the decline in mortgage rates, is good news for sellers because it means more buyers are actively looking for homes.
What This Means for You
Buyers are coming this spring, which is typically the busiest time of the year in real estate. And as Realtor.com tells us, if you’re a seller, you need to prepare:
“If homeowners are planning to sell in 2023, now is the time to get ready.”
The means working with a local real estate agent to maximize your home’s appeal and get it listed at the ideal price for your area.
Bottom Line
The housing market is warming up for spring. If you’re thinking about selling your house and taking advantage of this recent uptick in buyer activity, let’s connect.
Two Reasons You Should Sell Your House
Wondering if you should sell your house this year? As you make your decision, think about what’s motivating you to consider moving. A recent survey from realtor.com asked why homeowners are thinking about selling their houses this year. Here are the top two reasons (see graphic below):
Let’s break those reasons down and explore how they might resonate with you.
1. I Want To Take Advantage of the Current Market and Make a Profit
When you decide to sell your house, how much you’ll make from the sale will likely be top of mind. So, here’s some good news: according to the latest data, the average seller can expect a strong return on their investment when they make a move. ATTOM explains:
“The $112,000 profit on median-priced home sales in 2022 represented a 51.4% return on investment compared to the original purchase price, up from 44.6% last year and from 32.8% in 2020.”
Even though home prices have declined slightly in some markets, they’re still much higher overall than they were just a few years ago. To understand what’s happening with home prices in your area and the current value of your house, work with a local real estate professional. They can give you the best advice on how much you could gain if you sell this year.
2. My Home No Longer Meets My Needs
The average person has been in their house for ten years. That’s a long time when you think about how much may have changed in your life since you moved in. And typically, those changes have a direct impact on what you need in a home. Whether it’s more (or less) space, different features, or a location closer to your work or loved ones, your current house may no longer check all the boxes of what feels like home to you. If that’s the case, it could be time to work with a real estate agent to find a better fit.
Bottom Line
If you’re thinking about selling your house, there’s probably a good reason for it. Let’s connect so you can make a move that’ll help you accomplish your goals this year.
How Changing Mortgage Rates Can Affect You
The 30-year fixed mortgage rate has been bouncing between 6% and 7% this year. If you’ve been on the fence about whether to buy a home or not, it’s helpful to know exactly how a 1%, or even a 0.5%, mortgage rate shift affects your purchasing power.
The chart below helps show the general relationship between mortgage rates and a typical monthly mortgage payment:
Even a 0.5% change can have a big impact on your monthly payment. And since rates have been moving between 6% and 7% for a while now, you can see how it impacts your purchasing power as rates go down.
What This Means for You
You may be tempted to put your homebuying plans on hold in hopes that rates will fall. But that can be risky. No one knows for sure where rates will go from here, and trying to time them for your benefit is tough. Lisa Sturtevant, Housing Economist at Bright MLS, explains:
“It is typically a fool’s errand for a homebuyer to try to time rates in this market . . . But volatility in mortgage rates right now can have a real impact on buyers’ monthly payments.”
That’s why it’s critical to lean on your expert real estate advisors to explore your mortgage options, understand what impacts mortgage rates, and plan your homebuying budget around today’s volatility. They’ll also be able to offer advice tailored to your specific situation and goals, so you have what you need to make an informed decision.
Bottom Line
Your ability to buy a home could be impacted by changing mortgage rates. If you’re thinking about making a move, let’s connect so you have a strong plan in place.
We’re in a Sellers’ Market. What Does That Mean?
Even though activity in the housing market has slowed from the frenzy we saw over a year ago, today’s low supply of homes for sale is still a sellers’ market. But what does that really mean? And why are conditions today so good if you want to list your house?
It starts with the number of homes available for sale. The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Today, we have a 2.6-month supply of homes at the current sales pace. Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers (see graph below):
What Does This Mean for You?
When the supply of homes for sale is as low as it is right now, it’s much harder for buyers to find one to purchase. That creates increased competition among purchasers and keeps upward pressure on prices. And if buyers know they’re not the only one interested in a home, they’re going to do their best to submit a very attractive offer. As this happens, sellers are positioned to negotiate deals that meet their ideal terms. Lawrence Yun, Chief Economist at NAR, says:
“Inventory levels are still at historic lows. Consequently, multiple offers are returning on a good number of properties.”
Right now, there are still buyers who are ready, willing, and able to purchase a home. If you list your house right now in good condition and at the right price, it could get a lot of attention from competitive buyers.
Bottom Line
Today’s sellers’ market holds great opportunities for homeowners ready to make a move. Listing your house now will maximize your exposure to serious, competitive buyers. Let’s connect to discuss how to jumpstart the selling process.
4 Key Tips for Selling Your House This Spring
Spring has arrived, and that means more and more people are getting their homes ready to sell. But with recent shifts in real estate, this year’s spring housing market will be different from the frenzy of the past several years. To sell your house quickly, without hassles, and for the most money, be sure to follow these four simple tips:
1. Make Sure You Give Buyers Access
One of the biggest mistakes you can make as a seller is limiting the days and times when buyers have access to view your home. In any market, if you want to maximize the sale of your house, you can’t limit potential buyers’ access to view it. If it’s not accessible, it could cost you by sitting on the market longer and ultimately selling for a lower price.
2. Make Your Home Look as Good as Possible on the Inside
For anything to sell, especially your home, it must look inviting. Your real estate agent can give you expert advice on ideal staging for your home. Even updating a room with fresh paint, steam cleaning carpets, or removing clutter from the garage can make a big impact.
3. First Impressions Matter
The old saying “you never get a second chance to make a first impression” matters when selling your house. Often, the first impression a buyer gets is what they see as they walk up to the front door. Putting in the work in on the exterior of your home is just as important as what you stage inside. Freshen up your landscaping to improve your home’s curb appeal so you can make an impact with potential buyers.
4. Price It Right
This is probably the most important aspect of selling your home in today’s real estate market. If a house is priced competitively, it’s going to sell. Period. To do this, you have to know what’s happening with home prices in your area and understand the factors that are affecting the market right now. That’s why it’s best to work with a trusted real estate professional who can ensure you list your house at the right price.
Bottom Line
Everyone selling their home wants three things: to sell it for the most money they can, to do it in a certain amount of time, and to do all of that with the fewest hassles. To accomplish these goals, let’s connect so you can understand the steps you need to take to sell your home this spring.
How Homeownership Is Life Changing for Many Women
Throughout Women’s History Month, we reflect on the impact women have in our lives, and that includes impact on the housing market. In fact, since at least 1981, single women have bought more homes than single men each year, and they make up 17% of all households.
Why Is Homeownership So Important to Women?
The rise in women pursuing homeownership hasn’t just made an impact on the housing market. It’s also been an asset for those buyers and their households. That’s because homeownership has many benefits, both financial and personal.
On the financial side, housing proves to be the key to building wealth for single women. Ksenia Potapov, Economist at First American, says:
“For single women, housing has always made up a large share of total assets. Over the last 30 years, the average single woman’s wealth has increased 88% on an inflation-adjusted basis, from just over $142,000 in 1989 to $267,000 in 2019, and housing has remained the single largest component of their wealth.”
The financial security and independence homeownership provides can be life changing, too. And when you factor in the personal motivations behind buying a home, that impact becomes even clearer.
A recent report from the National Association of Realtors (NAR) shares the top reasons single women are buying a home right now (see chart below):
Bottom Line
Homeownership can be life changing no matter who you are. Let’s connect today to talk about your goals in the housing market.
Get Ready: The Best Time To List Your House Is Almost Here
If you’re thinking about selling this spring, it’s time to get moving – the best week to list your house is fast approaching.
Experts at realtor.com looked at seasonal trends from recent years (excluding 2020 as an uncharacteristic year due to the onset of the pandemic) and determined the ideal week to list a house this year:
“Home sellers on the fence waiting for that perfect moment to sell should start preparations, because the best time to list a home in 2023 is approaching quickly. The week of April 16-22 is expected to have the ideal balance of housing market conditions that favor home sellers, more so than any other week in the year.”
If you’ve been waiting for the best time to sell, this is your chance. But remember, before you put your house on the market, you’ve got to get it ready. And if you haven’t started that process yet, you’ll need to move quickly. Here’s what you should keep in mind.
Work with an Agent To Determine Which Updates To Make
Start by prioritizing which updates you’ll make. In February, realtor.com asked more than 1,200 recent or potential home sellers what updates they ended up making to their house before listing it (see graph below):
As you can see, the most common answers included landscaping and painting. Work with a trusted real estate agent to determine what projects make the most sense for your goals and local market.
If Possible, Plan To Have Your House Staged
Once you’ve made any necessary repairs and updates to your house, consider having it staged. According to the National Association of Realtors (NAR), 82% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home. Additionally, almost half of buyers’ agents said home staging had an effect on most buyers’ view of the home in general. Homes that are staged typically sell faster and for a higher price because they help potential buyers more easily picture their new life in the house.
Bottom Line
Are you ready to sell this spring? Let’s connect to plan your next steps. You can start by making a checklist of what you think your house needs to get ready. Then, we can work together to prioritize your list and move forward together.
Reasons To Consider Condos in Your Home Search
Are you having trouble finding a home that fits your needs and your budget? If so, you should know there’s an option worth considering – condominiums, also known as condos. According to Bankrate:
“A condo can be a more affordable entry point to homeownership than a single-family home. And as a homeowner, you’ll build equity over time and have access to tax benefits that a renter wouldn’t.”
That’s why expanding your search to include additional housing types, like condominiums, could help you accomplish your homeownership goals this spring, especially if you can be flexible about the space you need. Condos are typically smaller than a single-family home, but that’s part of what can make them more budget-friendly (see graph below):
In addition to providing more options in your home search and possibly your price point, there are several other benefits to condo living. They tend to require less upkeep and lower maintenance – and that can give you more time to spend doing the things you enjoy. Plus, since many condos are in or near city centers, they offer the added benefit of being in close proximity to work and leisure.
Remember, your first home doesn’t have to be your forever home. The important thing is to get your foot in the door as a homeowner so you can start building wealth in the form of home equity. In time, the equity you develop can fuel a future purchase if your needs change.
Ultimately, owning and living in a condo can be a lifestyle choice. And if that appeals to you, they could provide the added options you need in today’s market.
The Role of Access in Selling Your House
Once you’ve made the decision to sell your house and have hired a real estate agent to help, they’ll ask how much access to your home you want to give potential buyers. Your answer matters more now than it did in recent years. Here’s why.
At the height of the buying frenzy seen during the pandemic, there was a rise in the number of homebuyers who put offers on houses sight unseen. That happened for three reasons:
- Extremely low housing inventory
- A lot of competition from other buyers wanting to take advantage of historically low mortgage rates
- And general wariness of in-person home tours during a pandemic
Today, the market’s changing, and buyers can usually be more selective and take more time to explore their options.
So, in order to show your house and sell it efficiently, you’ll want to provide buyers with as much access as you can. Before letting your agent know what works for you, consider these five levels of access you can provide. They’re ordered from most convenient for a buyer to least convenient. Remember, your agent will be better able to sell your house if you provide as much access to buyers as possible.
- Lockbox on the Door – This allows buyers the ability to see the home as soon as they are aware of the listing or at their convenience.
- Providing a Key to the Home – This would require an agent to stop by an office to pick up the key, which is still pretty convenient for a buyer.
- Open Access with a Phone Call – This means you allow a showing with just a phone call’s notice.
- By Appointment Only – For example, you might want your agent to set up a showing at a particular time and give you advance notice. That way you can prepare the house and be sure you have somewhere else you can go in the meantime.
- Limited Access – This might mean you’re only willing to have your house available on certain days or at certain times of day. In general, this is the most difficult and least flexible way to show your house to potential buyers.
As today’s housing market changes, be sure to work with your local agent to give buyers as much access as you can to your house when you sell.
What’s Ahead for Home Prices in 2023
Over the past year, home prices have been a widely debated topic. Some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – which hasn’t happened. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.
Selma Hepp, Chief Economist at CoreLogic, says:
“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”
Additionally, every quarter, Pulsenomics surveys a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:
So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider making a move:
- Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has risen consistently. The bottom line is, rent is going up.
- Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
- Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a renter.
Experts are projecting slight price depreciation in the housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.
