How to Be a Competitive Buyer in Today’s Housing Market [INFOGRAPHIC]

by | Mar 12, 2021 | Buyers, First Time Home Buyers, Home Search, Infographic, Making Offers on Homes, Move-up Buyers

How to Be a Competitive Buyer in Today’s Housing Market [INFOGRAPHIC] | MyKCM

Some Highlights

  • With so few houses for sale today, it’s important to be prepared when you’re ready to buy a home.
  • Meeting with your lender early, knowing your must-haves and nice-to-haves, preparing for a bidding war, and keeping your emotions in check are all ways to gain confidence in the homebuying process.
  • If you’re looking for an expert guide to help you navigate today’s lightning-fast housing market, let’s connect today.

Will the Housing Market Bloom This Spring?

by | Mar 11, 2021 | Buyers, First Time Home Buyers, Home Search, Interest Rates, Move-up Buyers, New Construction, Sellers, Selling Your Home

Will the Housing Market Bloom This Spring? | MyKCM

Spring is almost here, and many are wondering what it will bring for the housing market. Even though the pandemic continues on, it’s certain to be very different from the spring we experienced at this time last year. Here’s what a few industry experts have to say about the housing market and how it will bloom this season.

Danielle Hale, Chief Economist, realtor.com:

“Despite early weakness, we expect to see new listings grow in March and April as they traditionally do heading into spring, and last year’s extraordinarily low new listings comparison point will mean year over year gains. One other potential bright spot for would-be homebuyers, new construction, which has risen at a year over year pace of 20% or more for the last few months, will provide additional for-sale inventory relief.”

Ali Wolf, Chief Economist, Zonda:

“Some people will feel comfortable listing their home during the first half of 2021. Others will want to wait until the vaccines are widely distributed. This suggests more inventory will be for sale in late 2021 and into the spring selling season in 2022.”

Freddie Mac:

“Since reaching a low point in January, mortgage rates have risen by more than 30 basis points… However, the rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.”

Mark Fleming, Chief Economist, First American:

“As the housing market heads into the spring home buying season, the ongoing supply and demand imbalance all but assures more house price growth…Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”

Bottom Line

The experts are very optimistic about the housing market right now. If you pressed pause on your real estate plans over the winter, let’s chat to determine how you can re-engage in the homebuying process this spring.

How Upset Should You Be about 3% Mortgage Rates?

by | Mar 9, 2021 | Buyer Myths, Buyers, Financing, First Time Home Buyers, Home Search, Housing Market Updates, Interest Rates, Move-up Buyers

How Upset Should You Be about 3% Mortgage Rates? | MyKCM

Last Thursday, Freddie Mac announced that their 30-year fixed mortgage rate was over 3% (3.02%) for the first time since last July. That news dominated real estate headlines that day and the next. Articles talked about the “negative impact” it may have on the housing market. However, we should realize two things:

1. The bump-up in rate should not have surprised anyone. Many had already projected that rates would rise slightly as we proceeded through the year.

2. Freddie Mac’s comments about the rate increase were not alarming:

“The rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.”

A “muted” rise in rates will not sink the real estate market, and most experts agree that it will be “a strong spring sales season.”

What does this mean for you?

Obviously, any buyer would rather mortgage rates not rise at all, as any upward movement increases their monthly mortgage payment. However, let’s put a 3.02% rate into perspective. Here are the Freddie Mac annual mortgage rates for the last five years:

  • 2016: 3.65%
  • 2017: 3.99%
  • 2018: 4.54%
  • 2019: 3.94%
  • 2020: 3.11%

Though 3.02% is not as great as the sub-3% rates we saw over the previous seven weeks, it’s still very close to the all-time low (2.66% in December 2020).

And, if we expand our look at mortgage rates to consider the last 50 years, we can see that today’s rate is truly outstanding. Here are the rates over the last five decades:

  • 1970s: 8.86%
  • 1980s: 12.7%
  • 1990s: 8.12%
  • 2000s: 6.29%
  • 2010s: 4.09%

Being upset that you missed the “best mortgage rate ever” is understandable. However, don’t throw the baby out with the bathwater. Buying now still makes more sense than waiting, especially if rates continue to bump up this year.

Bottom Line

It’s true that you may not get the same rate you would have five weeks ago. However, you will get a better rate than what was possible at almost any other point in history. Let’s connect today so you can lock in a great rate while they stay this low.

How Smart Is It to Buy a Home Today?

by | Mar 3, 2021 | Buyer Myths, Buyers, Down Payment, First Time Home Buyers, Home Search, Interest Rates, Pricing

How Smart Is It to Buy a Home Today? | MyKCMWhether you’re buying your first home or selling your current house, if your needs are changing and you think you need to move, the decision can be complicated. You may have to take personal or professional considerations into account, and only you can judge what impact those factors should have on your desire to move.

However, there’s one category that provides a simple answer. When deciding to buy now or wait until next year, the financial aspect of the purchase is easy to evaluate. You just need to ask yourself two questions:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

From a purely financial standpoint, if the answer is ‘yes’ to either question, you should strongly consider buying now. If the answer to both questions is ‘yes,’ you should definitely buy now.

Nobody can guarantee what home values or mortgage rates will be by the end of this year. The experts, however, seem certain the answer to both questions above is a resounding ‘yes.’ Mortgage rates are expected to rise and home values are expected to appreciate rather nicely.

What does this mean to you?

Let’s look at how waiting would impact your financial situation. Here are the assumptions made for this example:

  • The experts are right – mortgage rates will be 3.18% at the end of the year
  • The experts are right – home values will appreciate by 5.9%
  • You want to buy a home valued at $350,000 today
  • You decide on a 10% down payment

How Smart Is It to Buy a Home Today? | MyKCMHere’s the financial impact of waiting:

  • You pay an extra $20,650 for the house
  • You need an additional $2,065 for a down payment
  • You pay an extra $116/month in your mortgage payment ($1,392 additional per year)
  • You don’t gain the $20,650 increase in wealth through equity build-up

Bottom Line

There are many things to consider when buying a home. However, from a purely financial aspect, if you find a home that meets your needs, buying now makes much more sense than buying next year.

6 Foundational Benefits of Homeownership Today

by | Feb 9, 2021 | Buyers, First Time Home Buyers, Home Search, Move-up Buyers, Rent vs Buy

6 Foundational Benefits of Homeownership Today | MyKCM

Over the past year, our homes have become an integral part of our lives more than ever. They’re much more than the houses we live in. They’re our workplaces, virtual schools, and safe havens that provide shelter, stability, and protection through the evolving health crisis. Today, 65.8% of Americans are fortunate enough to call their homes their own.

As we continue to think about the future, our goals for the year, and what we want to achieve well beyond 2021, it’s a great time to look at the benefits of owning a home. Below are some highlights and quotes on the benefits of homeownership shared by the National Association of Realtors (NAR). From feel-good motivations to economic and social impacts on the local community, these items may give you reason to believe homeownership stretches well beyond your financial investment.

Non-Financial Benefits

Owning a home brings a sense of happiness, satisfaction, and pride.

  • Pride of Ownership: It feels good to have a place that’s truly your own, especially since you can customize it to your liking. “The personal satisfaction and sense of accomplishment achieved through homeownership can enhance psychological health, happiness and well-being for homeowners and those around them.”
  • Civic Participation: Homeownership creates stability, a sense of community, and increases civic engagement. It’s a way to add to the strength of your local area and drive value into your neighborhood.

Financial Benefits

Buying a home is also an investment in your financial future.

  • Net Worth: Homeownership builds your net worth. Today, the median household net worth of all homeowners is $254,900, while the median net worth of renters is only $6,270.
  • Financial Security: Equity, appreciation, and more predictable monthly housing expenses are huge financial benefits of owning a home. Homeownership is truly the best way to improve your long-term financial position.

Economic Benefits

Homeownership is even a local economic driver.

  • Housing-Related Spending: An economic force throughout our nation, housing-related expenses accounted for more than one-sixth of the country’s economic activity over the past three decades.
  • Entrepreneurship: Homeownership is also a form of forced savings that can provide entrepreneurial opportunities. “Owning a home enables new entrepreneurs to obtain access to credit to start or expand a business and generate new jobs by using their home as collateral for small business loans.”

Bottom Line

The benefits of homeownership go well beyond the basics. Homeownership is truly a way to build financial freedom, find greater satisfaction and happiness, and make a substantial impact in your community. If owning a home is part of your dream this year, let’s connect so you can begin the homebuying process today.

Why Owning a Home Is a Powerful Financial Decision

by | Feb 4, 2021 | Buyers, First Time Home Buyers, Home Search, Interest Rates, Rent vs Buy

Why Owning a Home Is a Powerful Financial Decision | MyKCM

In today’s housing market, there are clear financial benefits to owning a home: increasing equity, the chance to build your net worth, and appreciating home values, just to name a few. If you’re a renter, it’s never too early to think about how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater financial security and savings.

1. You Won’t Always Have a Monthly Housing Payment

Personal finance advisor Dave Ramsey explains:

“Every payment brings you closer to owning the house. When you pay your rent, that money is spent. Gone. Bye. Not returning. But when you pay your mortgage, you work toward full ownership.”

As a homeowner, you can eventually eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs begin to work for you as forced savings in the form of equity. When you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Homeownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of homeownership. The same article states:

“You have tax advantages. Many of the costs of owning a home—like property taxes—are tax deductible. And if you’re paying off a mortgage, you’ll get to count your mortgage interest as a deduction when you file your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third benefit is the fact that monthly costs start to become more predictable with homeownership, something that doesn’t happen if you’re renting. Ramsey also notes:

“Rent rates will go up. Even if you found a killer deal in a hot area, inflation, competition, and rising property values will cause your rent to go up year after year.”

With a mortgage, you can keep your monthly housing costs relatively steady and predictable. Your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a longer period of time. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s connect to determine if buying sooner rather than later is right for you.