Will the Housing Market Crash?
21 Tuesday Mar 2023
21 Tuesday Mar 2023
15 Wednesday Mar 2023
One of the benefits of being a homeowner is that you build equity over time. By selling your house, that equity can be used toward purchasing your next home. But before you can put it to use, you should understand exactly what equity is and how it grows. Bankrate explains it like this:
“Home equity is the portion of your home you’ve paid off – in other words, your stake in the property as opposed to the lender’s. In practical terms, home equity is the appraised value of your home minus any outstanding mortgage and loan balances.”
If you’ve owned your home for a while, you’ve likely built up some equity – and you may not even realize how much. Based on data from the U.S. Census Bureau and ATTOM, the majority of Americans have a substantial amount of equity right now (see graph below):
And having such large amounts of equity is a benefit to homeowners in more ways than one. Rick Sharga, Executive Vice President of Market Intelligence at ATTOM, explains:
“Record levels of home equity provide security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008.”
Over time, your home equity grows. In addition to providing financial stability while you own your house, when you’re ready to sell it, that money could go a long way toward paying for your next home.
07 Tuesday Mar 2023
You may have seen reports in the news recently saying it’s better to rent right now than it is to own your home. But before you let that impact your decisions, you should understand what these claims are based on.
A lot of the time, these reports are assuming things that aren’t realistic for the average household. For example, the methodology behind one of those reports says that renting is the smarter financial option because of the opportunity to invest money elsewhere. It assumes renters take the money they’d spend on costs tied to buying a home and put it in an investment portfolio.
But here’s the thing – most people who rent aren’t making those investments. Ken Johnson, Co-Author of the BH&J National Price-to-Rent Index, explains:
“One of the difficulties with the rent and reinvest model is many people . . . simply rent and spend the difference. . . . That’s wealth destroying.”
The reason homeownership is one of the best investments you can make is the wealth it helps you build. That’s why there’s a significant difference between the net worth of the average homeowner and the average renter (see graph below):
So, before you renew your rental agreement, think about the opportunity to build wealth that homeownership provides.
If you’re unsure whether to continue renting or to buy a home, let’s connect to help you make the best decision.
23 Thursday Feb 2023
According to a recent Harris Poll survey, 8 in 10 Americans say buying a home is a priority, and 28 million Americans actually plan to buy within the next 12 months. Homeownership provides many financial and nonfinancial benefits, so that interest is understandable.
However, it’s unlikely all 28 million Americans will accomplish that goal in the coming year. Experts project a total of around five million homes will be sold in 2023. Why is there such a big difference? It’s partly because there can be challenges to buying a home.
In the same survey, when asked, “Which of the following are preventing you from pursuing homeownership at this time?”:
If you’re aiming to buy a home, here’s what you need to know to accomplish that goal.
Your down payment is a big chunk of what you pay up front for your home. For most home purchases, buyers put down some amount of cash up front (a down payment) and then take out a loan (a mortgage) to pay for the rest.
It’s a longstanding myth that you need to pay 20% of the purchase price for your down payment. In reality, 20% down isn’t always required. In fact, according to the National Association of Realtors (NAR), today’s median down payment is 14% for the average buyer and just 6% for a first-time buyer.
Regardless of how much money you can save for your down payment, know there’s help available. A local lender can show you options to help you get closer to your down payment goal. Plus, there are even loan types, like FHA loans, with down payments as low as 3.5% for some buyers, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.
Beyond assistance programs and different loan types, here are a few other tips to help you as you save for your down payment:
Your credit score is a number that indicates how financially reliable you are to lenders. A higher credit score usually means you’ll be able to borrow more money at a better interest rate. If your credit score is preventing you from getting an affordable mortgage, there are steps you can take to improve it. Here are two:
If you want to purchase a home this year, let’s connect so we can start preparing.
14 Tuesday Feb 2023
67% 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 today’s market is nothing like it was before the housing crash in 2008.
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 data 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.
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.
Another difference is the number of homeowners that were facing foreclosure when the housing bubble burst. Foreclosure activity has been lower since the crash, largely because buyers today are more qualified and less likely to default on their loans. The graph below uses data from ATTOM to show the difference between last time and now:
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, explains 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.”
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 shortage of inventory available overall, primarily due to years of underbuilding homes.
The graph below uses data 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.
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.
01 Wednesday Feb 2023
As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.
Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7% compared to the week before.
So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.
“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”
“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”
“We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.”
“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”
If you’ve been thinking about making a move, now’s the time to get your house ready to sell. Let’s connect so you can learn about buyer demand in our area the best time to put your house on the market.
25 Wednesday Jan 2023
Last year, the housing market slowed down in response to higher mortgage rates, and that had an impact on home prices. If you’re thinking of selling your house soon, that means you’ll want to adjust your expectations accordingly. As realtor.com explains:
“. . . some of the more prominent pandemic trends have changed, so sellers might wish to adjust accordingly to get the best deal possible.”
In a more moderate market, how you price your house will make a big difference to not only your bottom line, but to how quickly your house could sell. And the reality is, homes priced right are still selling in today’s market.
Especially today, your asking price sends a message to potential buyers.
If it’s priced too low, you may leave money on the table or discourage buyers who may see a lower-than-expected price tag and wonder if that means something is wrong with the home.
If it’s priced too high, you run the risk of deterring buyers. When that happens, you may have to lower the price to try to reignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag by some buyers who will wonder what that means about the home.
To avoid either headache, price it right from the start. A real estate professional knows how to determine that ideal asking price. They balance the value of homes in your neighborhood, current market trends, buyer demand, the condition of your house, and more to find the right price. This helps lead to stronger offers and a greater likelihood your house will sell quickly.
The visual below helps summarize the impact your asking price can have:
Homes that are priced at current market value are still selling. To make sure you price your house appropriately, maximize your sales potential, and minimize your hassle, let’s connect.
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THINGS TO DO IN BATON ROUGE THIS MONTH
Cap City Beer Fest
Nov. 7th – Downtown BR
When you sponsor the Cap City Beer Fest, you become a highly visible partner in creating one of the most anticipated events in downtown Baton Rouge while helping the more than 8,000 lost, abandoned, and abused animals who will need Companion Animal Alliance in the coming year.
1 PM VIP ENTRY
2 PM GENERAL ADMISSION
LIVE MUSIC BY THE MICHAEL FOSTER PROJECT IN PARTNERSHIP WITH THE ARTS COUNCIL OF GREATER BATON ROUGE’S SUNDAY IN THE PARK.
For more info visit HERE
Nov. 13th-14th – Lamar Dixon
$6 General Admission. A portion of the proceeds will benefit children in need.
MISTLETOE MARKET HOURS
November 13, 2021, 9 am – 6 pm
November 14, 2021, 10 am – 5 pm
Lamar Dixon Expo Center9039 S. St. Landry Ave, Gonzales, La 70737
Louisiana Book Festival
The Louisiana Center for the Book in the State Library of Louisiana is proud to present the 17th edition of this free, world-class literary celebration. In lieu of our usual live and in-person festival this year, we are pleased to feature over 30 virtual programs with more than 80 authors, poets, and other participants. Check back here or follow us on Facebook for more details!
White Light Night
November 19th – Mid City BR
6:00PM – 10:00PM
White Light Night is Mid City’s largest art festival featuring Louisiana’s best artists, makers, and more. It’s free to attend and the best way to kick off your holiday shopping! Revel under the white lights adorning the streets, meet local artists, enjoy live music, and eat at Mid City’s exceptional and unique restaurants.
Check out the map for parking and a list of all of the participating shops and businesses along the route: HERE!
Men’s Football Schedule
Nov. 6th -@ Alabama – 6PM (ESPN)
Nov. 13th – Arkansas – 6:30PM (SEC Network)
Nov. 20rd – ULM – TBA (TBA)
Nov. 27th – Texas A&M – TBA (TBA)
Men’s Basketball Home Schedule
Nov. 7th – ULM – 7pm
Nov. 12th- Texas State – 7pm
Nov. 15th- Liberty. – 6pm
Nov. 18th – Mcneese. – 7pm
Nov. 22nd- Belmont – 7pm
Women’s Basketball Home Schedule
Nov. 9th – Nicholls – 11am
Nov. 14th – Florida Gulf state – 12:30pm
Sun. Nov. 23rd – Tulane – 6pm
05 Tuesday Oct 2021
Baton Rouge Real Estate, Baton Rouge Real Estate Trends, first time home buyers, home financing, home ownership, Home Ownership Tax Benefits, Housing Market Trend, Mortgages, News you can USE!, Real Estate, Relavent Real Estate News, renting vs buying a home
23 Thursday Sep 2021
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Baton Rouge Real Estate, Baton Rouge Real Estate Trends, home appreciation, home financing, home ownership, Home Ownership Tax Benefits, homebuyer, homes for sale, housing market, Housing Market Trend, Mortgages, News you can USE!, Real Estate, Relavent Real Estate News