The Best Way To Keep Track of Mortgage Rate Trends
The Best Way To Keep Track of Mortgage Rate Trends When considering purchasing a home, it's likely that mortgage rates are a key consideration. Understanding how they affect your monthly mortgage payment and factoring them into your plans is essential when preparing for your move. The problem is, with all the headlines in the news about rates lately, it can be a bit overwhelming to sort through. Here’s a quick rundown of what you really need to know. The Latest on Mortgage Rates Rates have been volatile – that means they’re bouncing around a bit. And, you may be wondering, why? The answer is complicated because rates are affected by so many factors. Things like what’s happening in the broader economy and the job market, the current inflation rate, decisions made by the Federal Reserve, and a whole lot more have an impact. Lately, all of those factors have come into play, and it’s caused the volatility we’ve seen. As Odeta Kushi, Deputy Chief Economist at First American, explains: “Ongoing inflation deceleration, a slowing economy and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may result in higher rates.” Professionals Can Help Make Sense of it All While you could drill down into each of those things to really understand how they impact mortgage rates, that would be a lot of work. And when you’re already busy planning a move, taking on that much reading and research may feel a little overwhelming. Instead of spending your time on that, lean on the pros. They coach people through market conditions all the time. They’ll focus on giving you a quick summary of any broader trends up or down, what experts say lies ahead, and how all of that impacts you. Take this chart as an example. It gives you an idea of how mortgage rates impact your monthly payment when you buy a home. Imagine being able to make a payment between $2,500 and $2,600 work for your budget (principal and interest only). The green part in the chart shows payments in that range or lower based on varying mortgage rates (see chart below): As demonstrated, even minor fluctuations in rates can significantly affect the loan amount within your target budget. Visual aids like these help translate market dynamics into practical implications for your home purchase. Relying on the expertise of a professional is crucial for navigating such insights effectively. You don’t need to be an expert on real estate or mortgage rates, you just need to have someone who is, by your side. Bottom Line Have inquiries about the current housing market trends? Let's connect and dissect how these developments directly impact your situation..
What You Really Need To Know About Home Prices
What You Really Need To Know About Home Prices Recent data from Fannie Mae reveals that nearly one-fourth of individuals still anticipate a decline in home prices. If you're among those concerned, here's some information to consider. A lot of that fear is probably coming from what you’re hearing in the media or reading online. But here’s the thing to remember. Negative news sells. That means, you may not be getting the full picture. You may only be getting the clickbait version. As Jay Thompson, a Real Estate Industry Consultant, explains: “Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.” Here’s a look at the data to set the record straight. Home Prices Rose the Majority of the Past Year Case-Shiller releases a report each month on the percent of monthly home price changes. If you look at their data from January 2023 through the latest numbers available, here’s what you’d see: What stands out to you when examining this graph? Your perception might be influenced by the color you're drawn to. Those focusing on the green notice the overall upward trend in home prices over the past year. Conversely, individuals drawn to the red might fixate on the two minor declines. This tendency to emphasize negative aspects is common in media coverage, sometimes overshadowing the broader perspective. Here’s what this data really says. There’s a lot more green in that graph than red. And even for the two red bars, they’re so slight, they’re practically flat. If you look at the year as a whole, home prices still rose overall. It’s perfectly normal in the housing market for home price growth to slow down in the winter. That’s because fewer people move during the holidays and at the start of the year, so there’s not as much upward pressure on home prices during that time. That’s why, even the green bars toward the end of the year show smaller price gains. The overarching story is that prices went up last year, not down. To sum all that up, the source for that data in the graph above, Case Shiller, explains it like this: “Month-over-month numbers were relatively flat, . . . However, the annual growth was more significant for both indices, rising 7.4 percent and 6.6 percent, respectively.” If one of the expert organizations tracking home price trends says the very slight dips are nothing to worry about, why be concerned? Even Case-Shiller is drawing your attention to how those were virtually flat and how home prices actually grew over the year. Bottom Line The data indicates a general increase in home prices over the past year. If you're curious about how this trend reflects on home prices in our local area, I'd be happy to discuss further.
Myths About the 2024 Housing Market
Myths About the 2024 Housing Market [INFOGRAPHIC] Some Highlights Right now, there are several misconceptions swirling around the current housing market. One of the more common misconceptions is that you should wait for mortgage rates to drop or home prices to fall. Other myths concern the availability of homes for sale and down payment requirements. Let’s connect so you have an expert to help separate fact from fiction in today’s housing market.
Is It Getting More Affordable To Buy a Home?
Is It Getting More Affordable To Buy a Home? In recent times, discussions about the challenges of buying a home have been prominent, particularly regarding tight affordability. However, there are indications that conditions are starting to ease up and may continue to improve over the year. According to Elijah de la Campa, Senior Economist at Redfin, here's what you need to know: “We’re slowly climbing our way out of an affordability hole, but we have a long way to go. Rates have come down from their peak and are expected to fall again by the end of the year, which should make homebuying a little more affordable and incentivize buyers to come off the sidelines.” Here’s a look at the latest data for the three biggest factors that affect home affordability: mortgage rates, home prices, and wages. 1. Mortgage Rates This year, mortgage rates have seen some fluctuation, hovering between the upper 6% and low 7% range. Although these rates are higher than they were a couple of years ago, there is a glimmer of good news. Despite recent ups and downs, current rates are lower than they were last fall when they almost hit 8%. Furthermore, many experts predict that rates will decrease somewhat throughout the year. A recent article from Bright MLS sheds more light on this topic: “Expect rates to come down in the second half of 2024 but remain above 6% this year. Even a modest drop in rates will bring both more buyers and more sellers into the market.” Any drop in rates can make a difference for you. When rates go down, you can afford the home you really want more easily because your monthly payment would be lower. 2. Home Prices The other major factor to consider is home prices. While most experts expect them to continue rising this year, the increase is anticipated to happen at a more moderate rate. This is due to the fact that while there are more homes available on the market this year, the inventory is still insufficient to meet the high demand from potential buyers. The graph below illustrates the latest 2024 home price forecasts from seven different organizations: These forecasts are actually good news for you because it means the prices aren't likely to shoot up sky high like they did during the pandemic. That doesn’t mean they’re going to fall – they'll just rise at a slower pace. 3. Wages One factor helping affordability right now is the fact that wages are rising. The graph below uses data from the Federal Reserve to show how wages have been growing over time: Take a look at the blue dotted line in the graph. It demonstrates how wages generally increase over time. If you focus on the right side of the graph, you can see that wages are currently rising at a pace faster than usual. Here's how this benefits you: If your income has grown, it becomes easier to afford a home because you can allocate a smaller portion of your paycheck towards your monthly mortgage payment. Bottom Line When you consider all these factors together, it becomes clear that there are positive trends for home affordability. Mortgage rates are expected to decrease later this year, home prices are rising at a more moderate pace, and wages are increasing faster than usual. These trends suggest a favorable outlook for your ability to afford a home.
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