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

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

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