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9 Mistakes To Avoid When Buying New Furniture, According To Designers

April 15, 2024 by rebecca2 Leave a Comment

PHOTO: EMILY FOLLOWILL; DESIGN BY WYETH RAY INTERIORS

Expert advice to thwart uncomfy sofas and buyer’s remorse.

Much to the consternation of our wallets (and our better judgment), a little impulse shopping is hardly the end of the world. That is, unless you’ve gone and made a major, spontaneous purchase. Then, you just might find yourself facing an over-extended budget and buyer’s regret.

Furniture is one thing that should never be bought on a whim. This is one impromptu purchase that is far too expensive, heavy, and burdensome to replace if you decide to return it as quickly as you bought it.

Instead, interior designers recommend taking your time when shopping for furniture, and putting some serious thought and planning in before making any decisions. For example, designer Caroline Agee advises furniture shoppers to consider functionality, style, durability, and cohesiveness before taking anything home with them.

When shopping for new furniture, keep notes with you about ideal dimensions and bring fabric swatches with you while you shop. Anything you can do to feel more confident in your choice will lead to less buyers remorse.

— WHITNEY RAY

To make the smartest furniture buying decisions possible, we’ve compiled a list of mistakes to avoid. Interior designers say that ignoring these oversights may lead to disappointing furniture that’s improperly scaled, low quality, or not meant for the long haul.

Buying First, Planning Later

Before you even begin browsing, a planning stage is essential, designers reveal. Shopping unprepared might just be the biggest furniture woe yet.

“Purchasing furniture isn’t like purchasing artwork,” says Ray. “With art, you can almost always find a home for it. Artwork doesn’t need to necessarily work with anything else in the space. With furniture, it needs to be the right size, color scheme, and style to fit in with your space.”

Agee agrees, sharing her strategy to bypass this miscalculation: “I always determine what dimensions would work best before I begin looking for a piece of furniture,” she says. “It’s best to have a furniture layout for a space so you have a long-term plan. Having a plan not only helps determine what dimensions will work best, but also helps to coordinate the style, fabric, and finishes of multiple pieces. It also helps to avoid ending up with pieces that don’t end up working.”

Overlooking Function

Considering function before shopping is top priority, designers say. With some foresight, you’ll surely save yourself lots of time shopping around and ultimately settle on a more fitting piece of furniture.

“Think about functionality for a space,” says Agee. “For instance, you may have room for a console table, a chest with drawers, or a cabinet with doors. Having an idea of what will function best helps you spend less time searching for the right piece.”

This rule applies to both choosing what kind of furniture you’re on the prowl for, as well as critical details. Agee also says that one common mistake she sees furniture shoppers make is not putting enough thought into what kind of fabric will best suit their functional needs for an upholstered piece. Consider your durability needs, she says, and  interior designer Sarah Brannon recommends that shoppers consider whether or not they wish to choose a performance fabric.

Living Solely In The Moment

When shopping for furniture, think long-term. Interior designers agree that considering longevity is critical—both from a quality and design perspective. Ray recommends avoiding short-lived trends and asking yourself the questions: “Will I love this in 5 years? 10 years?”

At times, thinking long-term might even mean making sacrifices in the short term. These days, furniture can take what feels like ages to arrive, but Agee reassures that timeless, quality furniture will be worth the wait.

“I think people often want what’s available the soonest or they want to save money by buying a less expensive piece of furniture,” she says. “The best way to be happy with furniture for a long time is by carefully weighing the options and being okay with spending a little bit more or waiting slightly longer for it to arrive. Of course, if you spot a one-of-a-kind piece that you love, you should go for it!”

Buying To Fill A Gap

Like decor, furniture shouldn’t be purchased only for the sake of closing a gap. Just because you’re in the market for a new coffee table, doesn’t mean that you should settle for the first one you see.

“Furniture shouldn’t be purchased simply because you have a hole to fill,” says Ray. “It should be something that caught your eye compared to all of the other options. Something that drew you in.”

Taking Furniture At Face Value

Looks aren’t everything. Like for people, beauty has to come from the inside. In fact, if something must slip through the cracks, it should be design over quality. While falling for a short-lived furniture trend isn’t advisable, it’s much easier to fix the look of a piece than its foundation.

“I have consigned pieces that no longer work with my aesthetic,” Agee admits to her own past furniture mistakes. “Quality pieces can be transformed with paint, a new finish, or new hardware too.”

To avoid such missteps, Ray recommends researching a piece rather than simply being satisfied with the look of it online or in a showroom. Once you find a piece of furniture you’re interested in, take a step back and do your due diligence to make sure it’s right for you.

“Do your research on the quality of the piece,” Ray advises. “What materials is the piece made from, for instance is it real wood, and what kind of cushion content does it contain? Even if something is inexpensive, you’re throwing away money if it isn’t going to last you but a year or two.”

Coastal Lowcountry Living Room
PHOTO: LAUREY W. GLENN

Bony Upholstery

Having selected many pieces of furniture in her days as a designer, Ray reveals that there’s a sure-fire way to tell if a piece of upholstery is quality enough to consider buying.

“If you push on the arm or back of upholstery and can feel the wood through the fabric, it’s going to be a no,” she says. “Look for thicker upholstery with plenty of cushion. Remember, when viewing furniture in a store or showroom, you are seeing the best that a piece of furniture is going to look, so you need to feel it’s of good quality.”

When you sit and sample on a showroom piece, if it demonstrates this red flag, then the furniture is immediately out of the running, Ray says—not even worth moving on to the research phase.

One-Stop-Shopping

“Do not one-stop-shop for your room,” Brannon pleads. “Mix it up from various places and select colors, patterns, and textures that are interesting!”

In addition to building a space that’s layered and appealing, considering multiple stores is a reliable way to avoid making an impulsive purchase. Agee recommends shopping around for the best piece to suit your needs, style, and budget before coming to any decisions.

“Once I have an idea of the style and dimensions of the piece I’m looking for, I like to look at multiple stores for similar pieces that I like,” she says. “Then I can compare them based on a number of criteria, like price, finish options, and lead time. Comparing multiple pieces helps me eliminate which ones aren’t my favorite. This helps me feel like I’m making the best decision and prevents buyer’s remorse.”

Pigeon-holing Pieces

When shopping for multiple pieces of furniture, another way to shop for furniture to build an interesting and layered space is to push the boundaries of design. Rather than feeling limited by a strict color palette, design style, or any other constraints (apart from space), creativity is encouraged.

“I love when various design styles are used cohesively in one space,” Agee says. “My favorite rooms incorporate old and new pieces in various finishes. It’s fun to mix a neoclassical antique with a mid-century modern piece, and sleek current upholstered pieces. Mixing styles and finishes helps a space feel collected and personal to the homeowner.”

Bad Bones

A reliable and beautiful piece of furniture that’s in it for the long haul begins with good bones. Cushions can be replaced, wood can be restrained, and fabric reupholstered, but if the foundation of a piece of furniture fails, you’ll be back at square one of the furniture shopping dilemma.

“It’s important to pick furniture pieces with good lines,” says Agee. “A new coat of paint or fabric can’t fix a bad silhouette. I look for silhouettes that are sleek and timeless.”

By

Hallie Milstein

Filed Under: Uncategorized

Mortgage Rate Drops After Four-Week Climb

April 8, 2024 by rebecca2 Leave a Comment

The average rate on 30-year and 15-year fixed-rate mortgages dropped this week and applications rose for the first time in six weeks, a Freddie Mac economist reported.

LOS ANGELES — The average long-term U.S. mortgage rate edged lower for the first time in five weeks, a welcome shift for home shoppers this spring homebuying season.

The average rate on a 30-year mortgage slipped to 6.88% from 6.94% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.73%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, pulling the average rate down to 6.22% from 6.26% last week. A year ago it averaged 5.95%, Freddie Mac said.

“Evidence that purchase demand remains sensitive to interest rate changes was on display this week, as applications rose for the first time in six weeks in response to lower rates,” said Sam Khater, Freddie Mac’s chief economist.

Mortgage rates ticked higher for most of February as stronger-than-expected reports on inflation and the economy fueled speculation among bond investors that the Federal Reserve would have to hold off on cutting interest rates longer than expected.

Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

Federal Reserve Chair Jerome Powell said Wednesday rate cuts are likely to begin this year, but the central bank first needs to see more evidence that inflation is cooling. The Fed’s main interest rate is at its highest level since 2001.

Despite the choppy trajectory in mortgage rates this year, the average rate on a 30-year home loan is still down from the 23-year high of 7.79% it reached in late October.

The decline in rates since their peak last fall has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale.

Lower rates helped lift sales of previously occupied U.S. homes by 3.1% in January versus the previous month to the strongest sales pace since August.

Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

By Alex Veiga

Filed Under: Blog

What today’s buyers and sellers want in 2024

April 1, 2024 by rebecca2 Leave a Comment

Understanding who today’s buyers and sellers are, what motivates them to move, and what features buyers are looking for in a home will help you expand your marketing reach, provide customers with valuable insights, and turn the focus on the right real estate imagery to help your listing resonate with your target market.

Who are today’s prospective buyers and sellers?

According to Zillow Consumer Housing Trends Data 2023, today’s typical buyer is a married or partnered young adult in their 30s or 40s, has some college education, owns at least one pet and is likely to live in the South (34 percent) or the West (29 percent).

Similar to buyers, today’s typical U.S. seller is 45 years old; partnered, married or previously married; has some college education; and is most likely to sell in the South (40 percent). In mid-2023, the typical seller’s home was a single-family detached house with three bedrooms, 2.5 bathrooms and between 2,000 and 3,000 square feet.

Why are buyers and sellers looking to move?

One of the first questions you may want to ask a prospective client during a digital listing presentation is why they want to purchase a new home or sell.

In the latest Zillow Consumer Housing Trends Report, about 82 percent of sellers reported that at least one life event had an impact on their decision to move and sell their home. More than half (56 percent) cited a change in household or family size, while 41 percent reported remote work, and 37 percent said a new job or job transfer were influential factors triggering their move. For buyers, affordability and job relocations top their motivating factors to move.

What are today’s home buyer looking for in real estate?

Home Office or Flex Space. One consequence of remote-based work is the continued desire for a home office or flex space in a home. According to the Zillow Consumer Housing Trends Report, most prospective homeowners (64 percent) report having an extra room for use as a home office as “very or extremely important” in their search.

Energy-efficient features. The increased awareness of environmental concerns and rising energy costs are helping raise the bar on a home’s energy-efficient features among prospective buyers. According to a Zillow study, homes with energy-efficient features, such as double-pane windows and solar panels, are not only more appealing to buyers but may also sell for more and, sometimes, faster.

Tech in the home search. According to Zillow’s trends data report, today’s buyer wants digital tools that assist remote viewings. A majority (72 percent) report that 3D tours would give them a better feel for the home space than static photos.

Digital options, such as remote viewings and 3D tours, like Listing Showcase’s virtual tour and interactive floor plan, also curry favor with sellers. The Zillow report found that sellers are more likely to hire an agent who includes virtual tours and/or interactive floor plans in their services (78 percent).

Outdoor living spaces. The pandemic triggered a national trend toward outdoor kitchens, patios, decks and al fresco entertainment spaces. Agents can help highlight these coveted features by widening the lens in their listing imagery to show the full property, including adjacent exterior landscaping, pool spaces and outdoor kitchens, with hi-res photography and aerial photography from Listing Media Services.

By checking in often and staying updated with your customers’ changing family dynamics and needs, you’ll be more likely to develop long-term client relationships, win more listings and ultimately help them find home when they’re motivated to move.

 

BY INMAN CONTENT STUDIO
for ShowingTime+

Filed Under: Blog

How 50 years of equal credit spurred women’s homeownership

March 30, 2024 by rebecca2 Leave a Comment

New Inman contributor Bobbie Wasserman writes that in the 50 years since passage of the Equal Credit Opportunity Act, women have become an intergenerational economic powerhouse.

This January marks Inman’s fifth annual Agent Appreciation Month, which culminates at Inman Connect New York in a celebration of agents at the end of January. Plus, we’re rolling out the coveted Inman Power Player Awards, as well as the New York Power Brokers and MLS Innovators awards.

The Equal Credit Opportunity Act was enacted on October 28, 1974.  In this compelling two-part series, Bobbie Wasserman, founder and CEO of SingleLadyEstates, delves into the surging trend of single women in the housing market. In our first article, we unravel the journey that has led to this significant shift. The upcoming second part is a must-read exploration, offering valuable insights into capitalizing on this emerging intergenerational economic force.  

Since the early 1980s, a quiet revolution has been unfolding in the real estate market. Women, once sidelined, are now leading the charge in homeownership. Legislative advances, increased demand for skilled workers, the narrowing wage gap and changing societal views and lifestyles have helped women harness new financial opportunities like never before.

Women’s homeownership has moved from a niche market to an essential segment with growing influence and potential.

The real estate industry’s attention to this trend is crucial for its own growth, adaptation to changing market dynamics, and to meet the evolving needs and preferences of women homebuyers.

Buy the house. Don’t wait for a spouse

In a 2021 Bank of America survey, 87 percent of single women agree that “it’s an outdated idea that someone must be married to buy a home.” Furthermore, 92 percent of single women “agree that it would be a great accomplishment [to purchase a home on their own].”

Women are reaching that goal. According to the National Association of Realtors 2023 Home Buyers and Sellers Profile, the typical homebuyer is more likely than before to be a single woman.

Breaking barriers

Younger, single professional women have continually faced greater challenges in purchasing an affordable home compared to their male counterparts, primarily due to lower wages than their male peers, which can lead to lower credit scores and financing issues.

Yet, even with these barriers, younger women purchase homes at a higher rate, 19 percent, than their male counterparts at 9 percent, according to the National Association of Realtors Profile of Home Buyers and Sellers.

Younger women’s increasing homeownership rates can be partly attributed to a shift in generational advice, with a new emphasis on financial self-reliance passed from mothers to daughters.

Before 1974, women were often denied legal access to fundamental financial tools like credit cards and bank accounts. The Equal Credit Opportunity Act revolutionized this landscape, yet women remain with the slowly dissipating remnants of a societal bias against women’s financial abilities that goes back centuries.

Homeownership gains across ages and races

Older women are also making significant financial strides that are shifting the landscape of homeownership. According to the Urban Institute, the ranks of married women who have become heads of households over the past 30 years has soared, increasing to 43 percent in 2021 compared to just 8 percent in 1990.

Women are earning more and paying for more than half the household expenses. And, when it comes to the “gray divorce,” women opt to forge a new life on their own, purchasing new homes and investing in real estate in their 50s, 60s and 70s.

What’s more encouraging for women is that this trend, though at different percentages, reaches across all racial groups. Continued societal shifts in how women choose to live their lives are accelerating homeownership toward unmarried women.

Sheconomy

Coined in 2007 in China, the term “Sheconomy” recognizes the surge in female consumers around the globe. In the U.S. alone, women’s economic impact reached $8.95 billion in 2023 according to IMB.org. Higher levels of education (39.1 percent of women have a college degree compared to men at 36.6 percent); delayed marriage (28.6 years old compared to 20.2 years old in 1960);  and fewer children (1.3 compared to 3.5 in 1960) have bolstered women’s economic standing.

Yet younger women’s purchasing power has yet to peak. A 2019 study by Morgan Stanley shows the full impact of the Sheconomy will not be felt until 2030, the year that could see the generational swell of prime working-age women (defined as ages 25-45) in the labor market.

The forecast is that 45 percent of those women will be single and childless. Millennial and Gen-Z women need a home and can purchase that home independently of traditional family planning.

In general, these women are tech-savvy and confident, do their homework and ask a lot of questions. They also expect to be treated with the respect and sophistication they have earned.

The Great Wealth Transfer

On the mature end of the age scale, women are also experiencing significant lifestyle shifts as The Great Wealth Transfer is underway. Approximately $30 trillion in U.S. assets that baby boomers currently possess is currently transitioning to the next generations, with women poised to inherit a significant portion through inheritance, widowhood and divorce.

These women are forging new lives, buying their first homes and investing in real estate in their 50s, 60s and 70s. McKinsey estimates that women will hold more than two-thirds (67 percent) of wealth by 2030.

Today, roughly 70 percent of US affluent-household investable assets are controlled by baby boomers … As men pass, many will cede control of these assets to their female spouses, who tend to be both younger and longer lived. In the United States, women outlive men by an average of 5 years, and heterosexual women marry partners roughly 2 years older than they. By 2030, American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess. 

As for homebuyers, older women generally demonstrate financial acumen but may feel less assured in financial matters. Most likely, their first house was purchased with a spouse, and this is their first purchase alone. However,  they are unlikely to tolerate any patronizing education from men or women.

The combination of the Sheconomy and the Great Wealth Transfer is transforming women into an intergenerational economic powerhouse. As the real estate industry adapts to these shifts, understanding the motivations and preferences of women homebuyers becomes critical for future success.

BY BOBBIE WASSERMAN

Bobbie Wasserman is the founder and CEO  of Single Lady Estates, a company that empowers women through the entire homeownership journey – buying, selling and life in between. 

Filed Under: Uncategorized

The Real Estate Landscape: A Brief Overview

March 6, 2024 by rebecca2 Leave a Comment

In the ever-evolving realm of real estate, the current landscape is nothing short of dynamic. A whirlwind of factors has shaped the market, creating a ripe environment for homeowners to seize exciting opportunities. Let’s take a captivating journey through the elements that have transformed the real estate arena.

Riding the Low-Interest Wave

Picture this: near-record low interest rates beckoning aspiring homeowners into a world of affordability. The financial stars have aligned, making home financing more accessible than ever. It’s a golden era for those looking to step onto the property ladder or make a savvy move in the market.

The Inventory Conundrum

However, it’s not all smooth sailing. A constant drumbeat in the real estate symphony is the low inventory blues. The scarcity of available homes has become a defining trend, turning the home-buying experience into a competitive sport. Buyers, armed with determination, are battling it out for their dream dwellings in a market where supply is the hottest commodity.

High Demand, Higher Stakes

Enter the era of high demand—a confluence of low interest rates and a collective yearning for more comfortable living spaces during lockdowns. The result? A surge in buyer demand that has sent shockwaves through the real estate cosmos. It’s a seller’s market, and homes are commanding attention like never before.

The Ripple Effect on Home Values

The interplay of these dynamics has given rise to a noteworthy consequence: a significant escalation in home values. Chances are, your property has felt the impact of this upward trend. The question now is, how can you leverage this to your advantage?

Seize Your Opportunities

1. Bid Farewell to PMI

Did you put down less than 20% when you purchased your home? Now might be the opportune moment to bid farewell to Private Mortgage Insurance (PMI). The surge in your home’s value could empower you to eliminate PMI, paving the way for lower monthly payments. Curious if this applies to you? A comprehensive market analysis holds the answers.

2. Harness Your Home Equity

Eyeing a new abode? Your increased equity is your golden ticket. Let’s embark on a conversation about your equity position and explore what the exciting journey of purchasing a new home looks like for you.

3. Right-Size Your Home

Life is a series of changes, and so are housing needs. Whether you’re ready to upsize, downsize, or simply crave something new, I’m here to guide you through the process. Let’s align your dreams with your home’s value and make your housing aspirations a reality.

In a real estate landscape that’s alive with possibilities, it’s time to turn the page and explore the exciting chapters waiting for you. Let’s navigate the thriving market together and unlock the full potential of your real estate journey

Filed Under: Blog

MARKET UPDATE: 2024 Loan Limits

March 4, 2024 by rebecca2 Leave a Comment

Your Guide to the Housing Market

Home loans that conform to the Fannie Mae and Freddie Mac guidelines tend to have better terms than non-conforming loans. That’s why it’s good news that the Federal Housing Finance Agency (FHFA) recently announced that the conforming loan limits have increased to $766,550 for 2024. This is a $40,350 increase from the $726,200 loan limits of 2023. In some higher-cost areas, the loan limits could be as high as $1,149,825, which is a $60,525 increase from the $1,089,300 high-cost loan limits of 2023. Click here to view a map of all the loan limits across the US. Here are two ways to benefit from this increase:

BUY A HOME

It may make sense for you to consider a new home purchase using the higher loan amounts. This may be the perfect time for you to lock in your interest rate before interest rates move higher.

REFINANCE

It may be worth it to consider a home loan refinance if:

  • You currently have a home loan that is near the loan limit
  • You’d like to make some home improvements
  • You’d like to consolidate other debts into your home loan (such as home equity loans or credit cards)
  • You’re paying mortgage insurance and your home has increased in value from the time you purchased the home
  • You anticipate a change in your cash flow situation in the coming months (college funding, retirement, elder care, etc.)

Credit/Original Source: CertfiedRealEstateAdvisor

Filed Under: Blog

Is This a Good Time to Buy a House? Your Guide to the Housing Market THREE QUESTIONS TO DECIDE IF THIS IS A GOOD TIME FOR YOU TO BUY A HOUSE

March 1, 2024 by rebecca2 Leave a Comment

WHAT’S THE ALTERNATIVE?

Where will you live if you don’t buy a house? If you rent a house instead of purchasing a house, you’ll likely be subject to rising rent costs with no real benefit. That’s because none of your rent payments are going toward building equity. On the other hand, if you buy a house, at least a portion of your monthly payment is going toward a principal reduction on the mortgage balance. This means you’ll be building equity even if the home doesn’t go up in value.

 WHAT’S YOUR TIME HORIZON FOR LIVING IN THE HOME?

If your time horizon is more than 4 years, buying a home in a market like this would likely make sense for you. Here’s why: home price appreciation has slowed down a little from the break-neck speed of the past few years. Keep in mind that the fundamentals of the housing market are still strong: demand is greater than supply and will be so for quite some time because we have a housing shortage in the US. This means that even if house prices decline in the near term, they’ll likely start to climb again during the next few years.

In the meantime, what happens if you want to sell the property and the next buyer doesn’t want to pay you as much or more than what you paid? Here’s a potential scenario to consider: let’s say you buy a home and home values immediately drop by 10%, then they start going up by 4.46% per year, which is the long-term average home appreciation rate in the US. It would take roughly 4 years for you to break even and start building wealth through homeownership. In a potentially bad-case scenario like that, are you willing to keep the house for at least 4 years?

 

IS THE HOME AFFORDABLE FOR YOU?

Wages have increased considerably in the past year and are likely to keep rising because there are over 9 million job openings in today’s economy. If you tune out all the noise that’s not specific to you, is the home you want to buy affordable for you given your specific income/employment situation? There’s no one-size-fits-all solution in today’s market. That’s why it’s important to run the numbers for yourself, consider the alternatives, and make your own decision. I’m here to help in any way I can!

Credit/Original Source: CertfiedRealEstateAdvisor

 

Filed Under: Blog

Home Designer Shares ‘Ins’ and ‘Outs’ for 2024

February 28, 2024 by rebecca2 Leave a Comment

Interior design expert Morgan Olsen says these are the fads to watch.

What home improvement projects should your clients take on this year? After crunching the latest data from Thumbtack, a home services website, design expert Morgan Olsen chimes in with her picks for the “ins” and “outs” of the new year.

IN: Smarter homes

Photo credit: ArchiViz / Getty Images

Engineering and technical design services have jumped 105% year over year as more homeowners seek to invest in smart-home upgrades. This may include everything from remotely controlled appliances to smart thermostats and light installations. Olsen predicts these installations will continue to be “hot” in 2024, with homeowners interested in adding convenient and cost-efficient capabilities to their everyday lifestyle.

OUT: Climate change destroying homes

Climate change has been blamed on bringing more unpredictable weather to cities across the U.S., from historic floods to devastating tornadoes. Many homeowners are investing in upgrades and repairs to keep their houses immune to nature’s wrath. Home waterproofing is up 86% year over year, foundation repairs have risen 64%, window installations and repairs are both up 53%, and general structural engineering services are up 61%.

IN: Scented design

 

 

 

 

 

 

Photo credit: Veranika Smirnaya / Getty Images

Olsen believes a room’s scent will become a key design feature for homeowners. Much like a new mirror or accent chair, scent is strongly influencing design aesthetics in 2024. Odor removal requests are up 46% from a year ago, according to Thumbtack data.

OUT: White

The maximalist, grandma-chic style will reign supreme in 2024, as more homeowners get louder with the colors and patterns they choose to decorate their home. Instead of all-white homes, Olsen predicts more tans and almonds, ushering back in the brown feel that took over the 2010s. On the other hand, some homeowners are ditching paint entirely—paint removal is up 60% compared to a year ago—and turning to other materials, like wooden accents, to switch up their home’s design.

Credit/Original Source: National Association of Realtors

Filed Under: Blog

Wait, What? Things Are Looking Up for Homebuyers? By Holden Lewis

February 26, 2024 by rebecca2 Leave a Comment

Buyers have had it rough, but some experts think 2024 will see improvement in mortgage rates, home prices and availability of both new and existing homes for sale.

You feel demoralized about the housing market, right? Hold on. After a grim 2022 and 2023, it looks like 2024 is shaping up to be less hostile to home buyers.

Here’s a summary of what’s been rotten in the state of housing: Home prices skyrocketed from the middle of 2020 to mid-2022. Then, mortgage rates took off, and the 30-year fixed-rate home loan crested at almost 8% in October 2023. Home buyers struggled with affordability as high-interest rates eroded their borrowing power. They had few homes to choose from, anyway.

Meanwhile, rising rents made it harder to save up a down payment – or simply to find an affordable place to rent. The typical tenant’s annual rent went up 6% in 2022, and another 8% in 2023, after rising less than 4% each year in the previous 14 years.

It’s been a rough few years. But 2024 might see improvement in mortgage rates, home prices, and availability of both new and existing homes for sale. Buying a home won’t be easy in 2024, but it might be less frustrating than in 2022 and 2023.

Mortgage rates should keep falling

The most important development involves mortgage rates. They have improved since autumn. In January, the average rate on the 30-year fixed-rate mortgage was 6.64% in Freddie Mac’s weekly survey. That was down from October’s average of 7.62%.

That drop of nearly one percentage point makes a big difference in affordability: It would cut $198 off the monthly payment on a $300,000 loan.

If inflation finally cools off, as it’s expected to, forecasters believe mortgage rates will fall further. Fannie Mae and the Mortgage Bankers Association predict the 30-year mortgage will average somewhere around 6% in the fourth quarter of 2024, down from 7.3% at the end of 2023.

Consumers feel pretty optimistic about rates, too. In Fannie Mae’s latest monthly survey of consumers, 36% of respondents said they expect mortgage rates to fall over the next 12 months. That’s the highest proportion in the National Housing Survey’s history, going back to June 2010.

Home prices are rising more slowly

Home prices, unlike mortgage rates, probably won’t fall in 2024. But they won’t go up as fast as they did from August 2020 through June 2022, when prices rose a startling 33.3% in less than two years.

The price increases have already slowed down. In December 2023, the median resale price of an existing home was $382,600, according to the National Association of Realtors. That was only 4.4% higher than the same month a year earlier.

Even though price increases have tapped the brakes, home buyers are still struggling from those two years of accelerated prices.

“Because the country is still faced with affordability challenges, it’s really hard to see any force that would push home prices dramatically higher this year,” said Mike Simonsen, president of Altos Research, a real estate analytics firm, in a mid-January YouTube commentary.

Builders sell homes at lower price points

Another factor promises to prevent prices from running away: Home builders are diligently adding to the housing stock. They completed a little over a million single-family houses in 2023 and 450,000 multi-unit dwellings (everything from duplexes to high-rise apartments).

Construction is still going strong. Going into 2024, 1.65 million housing units were being built, and builders were breaking ground on more houses and fewer apartments.

The pace of construction helps buyers who want more homes to choose from. At the end of 2022, a total of 1.42 million new and existing homes were for sale. At the end of 2023, the number was 1.45 million. Not a ton of improvement, but at least the number of homes for sale is moving in favor of home buyers.

In another positive development, home builders have shifted to lower price points, according to the U.S. Census Bureau. The change happened quickly. In December 2022, 38% of newly built single-family houses cost less than $400,000. In December 2023, that portion had grown to 47%. We’re talking single-family houses, not condos.

But will sellers show up?

When you combine these trends – falling interest rates, moderation in house prices and vigorous home construction – it’s easy for an optimist to conclude that houses will become more affordable in 2024. The question is: Will homeowners continue to limit progress by keeping their homes off the resale market?

Of homeowners with mortgages, almost half have home loans with rates of 3.5% or lower, according to data compiled by the Urban Institute, an economic policy think tank. With mortgage rates well above 6% today, these homeowners have an incentive to stay where they are instead of selling, then swapping their low mortgage rates for higher rates on their next home. This phenomenon, known as rate lock-in, restricts the supply of homes available for sale, even as demand remains strong.

“By and large, inventory is still going to be pretty low as people are kind of staying in their homes,” says Lisa Sturtevant, chief economist for Bright MLS, a real estate database in the mid-Atlantic region. “And so prices, you know, will probably still go up in most places.”

She adds: “If you’re a buyer, I think it’s still going to be a tricky market, a tight market, particularly if you’re coming in as a first-time buyer.”

Yet there’s room for hope. Yes, people want to keep their low-rate mortgages. But people outgrow their homes, or feel the urge to downsize, or need to relocate, or just plain get sick and tired of where they’re living and long for new digs.

Simonsen, in a YouTube commentary on Feb. 12, pointed to an 18% jump in home listings in the first week of February compared with the previous week. “Each week, we can see more sellers testing the market. More buyers are finding their opportunities as well,” he said. The upshot is that the inventory of unsold homes keeps building. That gives buyers more selection to choose from and should limit the rise of prices.

Get ready to rumble

If this partly sunny outlook is accurate, the topmost advice when buying a house in 2024 is to prepare for competition when you make an offer on a home. Get preapproved for a mortgage, get ready to settle for a “good enough” place instead of a dream home, and if you lose a bidding war, brush yourself off and keep looking.

© 2024 WCMH, Nexstar Broadcasting, Inc. All rights reserved.

Credit/Original Source: FloridaRealtors.Org

 

Filed Under: Blog

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