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

 

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