, , , , , , ,

3 Key Factors Affecting Home Affordability

, , , , , , ,
 
 

Over the past year, a lot of people have been talking about housing affordability and how tight it’s gotten.

But just recently, there’s been a little bit of relief on that front. Mortgage rates have gone down since their most recent peak in October. But there’s more to being able to afford a home than just mortgage rates.

To really understand home affordability, you need to look at the combination of three important factors: mortgage rates, home prices, and wages. Let’s dive into the latest data on each one to see why affordability is improving.

1. Mortgage Rates

Mortgage rates have come down in recent months. And looking forward, most experts expect them to decline further over the course of the year. Jiayi Xu, an economist at Realtor.com, explains:

“While there could be some fluctuations in the path forward … the general expectation is that mortgage rates will continue to trend downward, as long as the economy continues to see progress on inflation.”

And even a small change in mortgage rates can have a big impact on your purchasing power, making it easier for you to afford the home you want by reducing your monthly mortgage payment.

2. Home Prices

The second important factor is home prices. After going up at a relatively normal pace last year, they’re expected to continue rising moderately in 2024. That’s because even with inventory projected to grow slightly this year, there still aren’t enough homes for sale for all the people who want to buy them. According to Lisa Sturtevant, Chief Economist at Bright MLS:

“More inventory will be generally offset by more buyers in the market. As a result, it is expected that, overall, the median home price in the U.S. will grow modestly . . .”

That’s great news for you because it means prices aren’t likely to skyrocket like they did during the pandemic. But it also means it’ll probably cost you more to wait. So, if you’re ready, willing, and able to buy, and you can find the right home, purchasing before more buyers enter the market and prices rise further might be in your best interest.

3. Wages

Another positive factor in affordability right now is rising income. The graph below uses data from the Federal Reserve to show how wages have grown over time: 

 
 

If you look at the blue dotted trendline, you can see the rate at which wages typically rise. But on the right side of the graph, wages are above the trend line today, meaning they’re going up at a higher rate than normal.

Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage. That’s because you don’t have to put as much of your paycheck toward your monthly housing cost.

What This Means for You

Home affordability depends on three things: mortgage rates, home prices, and wages. The good news is, they’re moving in a positive direction for buyers overall.

Bottom Line

If you're thinking about buying a home, it's important to know the main factors impacting affordability are improving. To get the latest updates on each, connect with a trusted real estate agent.

Read more at KeepingCurrentMatters.com

Related Links

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

Search Homes in Colorado

Search Homes in North Carolina

Search Homes in Oklahoma

Search Homes in Oregon

Search homes in Minnesota

, , , , , , ,

Sorry, Marble: Home Buyers Still Prefer This Kitchen Countertop Material

, , , , , , ,
 
 

Thanks to AI, you no longer have to restrict your online house hunt to a zip code.

You can ask for all the other things that matter to you. And that’s exactly what home buyers did when Zillow introduced its AI-powered natural language search last year. After analyzing more than 250 billion search queries, the company found that people prioritized looking at places with a garage, backyard, fireplaces, and walk-in closets first and foremost. But there was a surprising term that cracked the top 10 in 2023: granite countertops. Not milky white Carrara marble. Not super-durable quartz. Granite. 

While granite has been a popular choice for decades, the construction boom of the early 2000s brought on a new kind of mania. You couldn’t watch an episode of House Hunters without hearing the words granite countertops. But like most design trends, the coarse-grained, igneous rock reached the point of being overdone…or so we thought. DeVol’s creative director, Helen Parker, called it last February when she predicted that granite—specifically, black granite—was bound to bounce back. “Black granite was a staple in the 1990s, and it still has a certain understated luxury, especially when honed,” she told Domino. 

It’s true that when we think of granite countertops, we tend to picture a sandy-colored surface with flecks of black, the kind you’d most likely find in a Tuscan-inspired McMansion. But as Parker points out, there is a world of other granite varieties and finishes out there to explore—ones that sellers could easily put on their home’s résumé without feeling like they’ve sold out. Here are a few slabs we’d happily have in any current (or future!) home.

Read more at Domino.com

Related Links

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

Search Homes in Colorado

Search Homes in North Carolina

Search Homes in Oklahoma

Search Homes in Oregon

Search homes in Minnesota

, , , , , , ,

Signs Point to More Inventory this Spring

, , , , , , ,
 
 

The U.S. real estate housing market signals have been gradually building for a couple of months.

Home sellers are starting to ease back into the market, new listings are finally exceeding the levels of a year ago. As a result, we’re starting to see slightly more available supply of homes on the market. This is an expansion of the market from incredibly restricted levels last year. It’s a positive development. 

The longer we stay with mortgage rates higher, the more inventory will build closer to where it used to be. Each year we’ll have 5 million more people who don’t have crazy low rates that they want to hold onto forever. Mortgage rates are higher than they were a year ago. Higher than they were a month ago. Higher mortgage rates means more inventory. 

If mortgage rates fall into the 5s this spring, you should expect the available inventory to decline as demand picks up rapidly. But as of now, rates are holding in the upper 6s and inventory is building slowly. 

It is important to keep in mind that home sales are climbing with inventory. As supply comes to the market, that’s lifting one of the restrictions that kept the home sales so low last year. The number of homes for sale and the number that are being sold are both climbing into 2024 over last year.

Inventory ticked up

There are just over 505,000 single family homes on the market across the U.S. That’s a 1.2% increase over last week and nearly 7% more than last year at this time. Inventory ticked up this week. This week the supply of active inventory gained over 6000 homes. That would have been a big week any time last year.

These are the signals that point to growing inventory of homes on the market all spring. Even if inventory ticks down next week, it looks like that will be a smaller move down than last year, so the year-over-year percentage gain will continue to widen. 

Slightly more sellers

Inventory is building now because we have slightly more sellers each week. The market had about 49,000 new listings this week. 9,000 of those are already in contract. Leaving 40,000 New listings to add to the market which is about a 5% increase versus last year. 

It sure looks now like we’ll have more sellers each week all year long than we did in 2023.

The other side of the equation to keep watch is the purchase side. I’ve called this a supply constrained market. So as the inventory shortage eases just a bit, we should also see more transactions happening. And sure enough, that’s what we’re seeing. There continues to be more new contracts each week than last year at this same time. The pace of home sales is growing. It’s not a boom. but the market is growing.

Price cuts stable

Let’s move on to the price signals. Remember that in 2023, even though we had very few home sales, home prices inched up a bit nationwide. We’re looking at similar dynamics for 2024.

Price reductions continue to decline with the new inventory after the first of the year. Some 32.2% of the homes on the market have had a price reduction. That’s right in the middle of the normal range. This implies slight home price strength in general for the next few months. If rates fall from here into the 5s, watch demand pick up and we’ll immediately see fewer sellers need to cut their prices. 

Median price just under $420,000

The median price of single-family homes is just a hair under $420,000. Home prices ticked up almost half a percent this week. And the median price of single-family homes right now is 3% higher than last year at this time. In this market where supply and demand is pretty balanced, home prices are not going to skyrocket of course and there is no sign of prices dropping either. As inventory grows, and sales rates grow, home prices are reliably ticking up each week as well. That trend hasn’t changed. 

The median price of the newly listed homes is $389,900. That corrected back down from last week’s big jump.

We should be grateful that the market is expanding with more supply and more sales for more people than in 2023. 

Read more at HousingWire.com

Related Links

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

Search Homes in Colorado

Search Homes in North Carolina

Search Homes in Oklahoma

Search Homes in Oregon

Search homes in Minnesota

, , , , , , ,

As Featured in West + Main Home Magazine: Classic Victorian Made Modern

, , , , , , ,
 

Esther + Thomas Leytush, clients of West + Main Agent Elizabeth Fischer

“When we were buying our house, we chose this one in part because of the many projects it needed, knowing it would be amazing to put in the work to bring it back to beautiful life. ”
— Esther + Thomas Leytush

 “This house is 136 years old and there were numerous changes that were just tacked on, especially in the kitchen - for example it had 2 doors out into the backyard but no windows, a cramped and dark main kitchen area, and two L-corners that broke flow. The original kitchen was really a small kitchen spread over a large footprint. As for inspiration, we have a shared love of the Dark Academia aesthetic and it was a clear fit for this Queen Anne Victorian house - we wanted a modern Victorian feeling.”

“The nature of our project was that our design meant ripping out the entire kitchen as well as breaking and rebuilding walls, fixing structural issues, redoing electric and plumbing layouts, re-leveling and laying a new floor, putting in all new drywall over all new framing and insulation, putting in French doors and a window, and only at the very end putting in new kitchen cabinets and appliances. We spent just under $25k, of which $14k covered contractors and $11k covered materials and appliances. We were able to come in so low on materials and appliances because of choices like buying all our cabinets and countertops from Ikea and putting them together ourselves, as our research showed that Ikea cabinetry is excellent quality and lasts well over their 25-year warranty. We also made choices like buying engineered hardwood planks for flooring and making our own wood accents thanks to Thomas’s love of carpentry projects.”

Before:

“For the main aspects of the kitchen, we stuck with Home Depot and Ikea and have been happy with that, but also spent time hunting for cool brackets and other details from antique stores and salvage centers. I was also shocked and thrilled to discover that we could purchase newly made rosettes and molding from Tabor Millworks https://www.tabormill.com/ that were the same design as the original molding in the house.”

“The final result was much more beautiful and character-full even than we had hoped. We did not realize we would encounter multiple points where our contractors or us would notice details or questions we had missed in our plans, and because our costs were able to stay low we were able to make choices to create cleaner lines, grander openings, better lighting, and much more. In the end, we felt like we could have gone with an even smaller kitchen, even though the footprint of the new kitchen is actually smaller than the original that we had demoed.”

“For Thomas, since we matched the new archway with the rest of the house, it has become so much more inviting to just flow from one room to the next and into the backyard. For Esther, my favorite things are the wood accents that Thomas built - the beautiful large wood shelf with gorgeous Victorian-like routed edges that now hold the majority of our plants, the wood windowsill, the little wood shelves he built to make use of the dead space next to one of the cabinets which now stores all the cutting boards and cookbooks. We also love the bright light in the space, the way the dark green colors of the cabinets create a sense of elegance, and the way it feels so easy to cook in it because the flow is top notch - plenty of counter space, good organization with big drawers instead of standard lower cabinets, a big sink, etc.”

 

Related Links

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

Search Homes in Colorado

Search Homes in Oklahoma

Search Homes in Oregon

 
, , , , , , ,

Why You May Want To Seriously Consider a Newly Built Home

, , , , , , ,
 
 

Are you putting off your plans to sell because you’re worried you won’t be able to find a home you like when you move?

If so, it may be time to consider a newly built home and the benefits that come with one. Here’s why.

Near-Record Percentage of New Home Inventory

Newly built homes are becoming an increasingly significant part of today’s housing inventory. According to the most recent report from the National Association of Home Builders (NAHB):

“Newly built homes available for sale accounted for 31% of total homes available for sale in November, compared to an approximate 12% historical average.”

That means the percentage of the total homes available to buy that are newly built is well over two times higher than the norm. And even more new homes are on the way.

Recent data from the Census shows there’s been an uptick in both housing starts (where builders break ground on more new homes) and housing completions (homes where construction just wrapped).

And while some people may worry builders are building too many homes, that isn’t a concern – if anything, the recent increase is really good news. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“Even more home building will be needed with the housing shortage persisting in most markets . . . Another 30% rise in home construction can easily be absorbed in the marketplace . . .”

How This Helps You 

Since the supply of existing homes for sale is still low right now, the increase of new-home construction can be a game changer because it gives you more options for your search.

Picture yourself in a home that’s new from the ground up: new appliances, fresh paint, fewer maintenance needs because everything is new, and so much more. Doesn’t that sound nice?

And it may be more within reach than you ever imagined. In addition, some builders are offering things like mortgage rate buy-downs for homebuyers right now. This can help offset today’s affordability challenges while also getting you into your dream home. In a recent article, Patrick Duffy, Senior Real Estate Economist at U.S. News, explains:

“Builders have been using mortgage interest rate buydowns for many years as a sales incentive whenever interest rates are relatively high, . . .Today more builders are offering rate buydowns for the entirety of the loan, allowing buyers to finance more home for the same payment amount.”

Just remember, the process of buying from a builder is different from buying from a home seller, so it’s important to partner with a trusted real estate agent who knows the local market. They’ll be your go-to resource for coordinating with the builder, reviewing contracts, and more.

Bottom Line

If you’re trying to sell so you can make a move but you’re having a hard time finding a home you like, connect with a local real estate agent to explore all of your options, including the newly built homes in our area.

Read more at KeepingCurrentMatters.com

Related Links

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

Search Homes in Colorado

Search Homes in North Carolina

Search Homes in Oklahoma

Search Homes in Oregon

Search homes in Minnesota

 
W+M_Logo (1).jpg
 
Cart (0)