Builders Are Building Smaller Homes
Builders Are Building Smaller Homes Affordability remains a challenge for many homebuyers, which may require looking at smaller houses to stay within budget. However, there's good news: builders are prioritizing the construction of these smaller homes and providing incentives. This can provide you with more options that meet your financial goals. Newly Built Homes Are Trending Smaller During the pandemic, homebuyers sought larger homes, and builders met this demand by focusing on constructing bigger properties. This allowed people to have extra space for working from home, setting up home gyms, creating virtual school areas, and more. However, as buyers now face affordability challenges, builders are increasingly turning their attention to constructing smaller single-family homes. Data from the Census highlights how this trend has evolved in recent years: So, why the shift to less square footage? It’s simple. Builders want to build what they know will sell. Basically, they focus on where the demand is strongest. And once mortgage rates started climbing and consumers felt the challenges of affordability creeping in, it became clear there was (and is) a very real need for smaller homes. As the National Association of Home Builders (NAHB) explains: “After a brief increase during the post-covid building boom, home size is trending lower and will likely continue to do so as housing affordability remains constrained.” A recent article in the Real Deal says this about how this helps buyers: “Even a slightly smaller home can be thousands of dollars cheaper — for both builders and buyers. . . In response to affordability challenges, major homebuilders are shifting priorities away from the big ticket homes and towards the cheaper set.” What This Means for You If you’re having a hard time finding something in your budget, it may help to look at smaller homes. And, if you consider new builds specifically, you may find a few other fringe benefits that can help on the affordability front – like price reductions or mortgage rate buy-downs. As NAHB says: “More than one-third of builders cut home prices in 2023. NAHB expects builders to continue offering smaller homes and more affordable designs as housing affordability remains a barrier to homeownership.” As Charlie Bilello, Chief Market Strategist, at Creative Planning, explains: “Homebuilders are adapting to the lowest affordability on record by building smaller homes and offering more incentives/price cuts. The median square footage of a new single-family home in the US has moved down to its lowest level since 2010.” If you explore these options, you’ll also get brand new everything, enjoy a house with fewer maintenance needs, and some of the latest features available. That’s worth looking into, right? Bottom Line Builders building smaller homes can give you more affordable options at a time when you may really need it. If you’re hoping to buy a home soon, let’s connect to look at what’s available in our area.
Should I Move with Today’s Mortgage Rates?
Should I Move with Today’s Mortgage Rates? When mortgage rates surged in recent years, many homeowners delayed their plans to move. If you're among them, you might have hesitated to sell fearing higher rates for your next home. But is this still the best approach for you? In the current market, data indicates that more homeowners are adjusting to prevailing interest rates and considering making a move. According to Mark Zandi, Chief Economist at Moody’s Analytics: “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? Given the motivations of others, ponder what factors would justify a move for you. Is it seizing an opportunity for your dream job, even if it means relocating? Seeking a vibrant community? Craving more space or embarking on a new adventure? Perhaps you aim to invest in a property for rental income. Also, consider this: while mortgage rates are anticipated to decrease, this will likely prompt a surge in buyer activity. Delaying your plans until rates decline may result in heightened competition once that happens. So, does that mean it’s worth it to move now, even with rates where they are? The answer is: that it depends. As you weigh your options, take into account current mortgage rates, their projected trajectory, and the factors motivating your desire for change. Consulting with an expert can provide invaluable guidance in this decision-making process. Bottom Line Let's discuss your priorities and assess whether it's the right time for you to re-enter the market, considering how other homeowners are adapting to current mortgage rates.
The Top 5 Reasons You Need a Real Estate Agent when Buying a Home
The Top 5 Reasons You Need a Real Estate Agent when Buying a Home Recent news may have highlighted discussions surrounding real estate agents' commissions, which can be perplexing to follow. However, it's essential to understand that the guidance provided by a knowledgeable real estate agent holds immense value, particularly in today's market and here's why. A real estate agent does a lot more than you may realize. Your agent plays a pivotal role in navigating the home buying journey, ensuring your best interests are prioritized throughout. They simplify the intricate process, alleviating the stress associated with what could be your most significant investment. It's no wonder that a recent survey by Bright MLS revealed an overwhelming consensus on the importance of agents in the home buying process. (see visual below): To give you a better idea of just a few of the top ways agents add value, check out this list. 1. Deliver Industry Experience A proficient agent will expertly guide you through every stage of the process. Armed with extensive training and knowledge, they are well-versed in the intricacies of buying a home. Given the evolving nature of real estate transactions in today's market, having top-tier guidance is indispensable for making informed decisions. 2. Provide Expert Local Knowledge In today's data-driven world, a skilled agent can decode complex information, distinguish reality from speculation, and elucidate how prevailing market dynamics relate to your individual quest. Whether it's the pace of home sales or the newest listings of significance, they adeptly interpret local market trends, empowering you to navigate with assurance. 3. Explain Pricing and Market Value Agents provide insight into current pricing trends in your locality. What's the market value of a home in your area? How should you strategize your offer? Are there potential hidden issues with the property? Avoiding overpayment is crucial, and having an expert who comprehends the true market worth of specific neighborhoods is invaluable. Crafting an offer that strikes the balance between fairness and competitiveness in today's real estate landscape is paramount, and a knowledgeable local professional can guide you precisely. 4. Review Contracts and Fine Print In a dynamic and highly regulated process, agents assist in deciphering the essential disclosures and documents, ensuring you understand what you're signing. Their expertise in explaining intricate details could determine the success of your transaction, making them indispensable. Attempting to navigate this alone is risky and not advisable. 5. Bring Negotiation Expertise From initial offer to counteroffer, through inspections to closing, a real estate transaction involves numerous stakeholders. Having an advocate who knows both you and the process is invaluable. An agent will represent your interests, navigating each step to secure the best outcome. Bottom Line Real estate agents are experts, educators, and negotiators who adapt to market shifts and keep you updated. When making significant financial decisions, having a trusted professional by your side is crucial. Let's connect today for invaluable guidance.
Don’t Let Your Student Loans Delay Your Homeownership Plans
Don’t Let Your Student Loans Delay Your Homeownership Plans Navigating student loans while considering buying a home can be complex. Let's explore how your student debt impacts your ability to qualify for a mortgage and discuss strategies to help you achieve your homeownership goals. A Bankrate article explains: “Roughly 60 percent of U.S. adults who have held student loan debt have put off making important financial decisions due to that debt . . . For Gen Z and millennial borrowers alone, that number rises to 70 percent.” Making significant financial decisions, like buying a home, can be daunting, especially with existing student loans. However, waiting to purchase a home might not always be necessary. Despite having student debt, homeownership could still be feasible. Let's delve into why this might be the case. Can You Qualify for a Home Loan if You Have Student Loans? According to an annual report from the National Association of Realtors (NAR), 38% of first-time buyers had student loan debt and the typical amount was $30,000. That means other people in a similar situation were able to qualify for and buy a home even though they also had student loans. And you may be able to do the same, especially if you have a steady source of income. As an article from Bankrate says: “. . . you can have student loans and a mortgage at the same time. . . . If you have student loans and want a mortgage, there are multiple home loan programs you might qualify for . . .” The key takeaway is, for many people, homeownership is achievable even with student loans. Navigating the complexities of homeownership with student loans doesn't have to be a solo journey. Consulting with experienced professionals, like a trusted lender, can provide invaluable insights and tailored guidance. They can assess your unique circumstances, outline viable options, and draw from their expertise to illuminate a path forward based on successful strategies employed by others in similar situations. Bottom Line Many individuals burdened with student loan debt successfully achieve homeownership. By engaging with a lender, you can explore personalized options and gain clarity on your readiness to pursue your homeownership aspirations.
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