How Does a HELOC Work?

With home values having risen dramatically in the last few years, many homeowners are looking for ways to tap their equity without selling their home or refinancing their primary mortgage. If your home has gained significant value since you purchased it, or you’ve just paid so much of the mortgage down that you’ve got ample equity to work with, a second mortgage on your home might make sense.

Home Equity Lines of Credit (HELOCs) are popular options for homeowners in this very situation. They’re flexible loans that give you a lot of options and time to decide what you want to do with your equity, but they can also be a bit confusing because they don’t work like a more traditional home loan.

HELOCs Are Lines of Credit

The most important thing to keep in mind when it comes to a HELOC is that, unlike a traditional home equity loan, HELOCs are lines of credit. That means that they work much more like a credit card than a mortgage. You’re approved for a line of credit that represents the maximum amount of money you can charge to your HELOC (just like with a credit card), and your payments are based on how much of that line of credit you’ve used.

If you max out your HELOC, you can pay it down and charge again, just like with a credit card. Unlike a credit card, however, your home is being used as the security for this loan, so if you get in over your head, your home is at risk of foreclosure. So you must be very careful with this particular kind of credit line.

HELOCs Have Two Separate Loan Periods

HELOCs start out their lives as open lines of credit, allowing you to charge or pay off as much as you wish at any given time. You’re usually expected to make at least an interest payment each month, but beyond that, you can charge a lot or a little and only pay based on the percentage of the credit line you’ve utilized. This is known as the “draw” period.

This period of the HELOC, where it functions as a line of credit, is usually about 10 years, but can be more or less, depending on the loan you take out. Immediately following this period, your HELOC becomes a set loan, and you can no longer charge anything else to the line of credit.

In the repayment period, your HELOC becomes much more like a traditional second mortgage, with a payment that’s based on the amount of credit you ultimately used during the draw period. From here on, your payment is more or less fixed, but can vary if you have an adjustable rate loan. The repayment period is usually about 20 years, but, again, can be different based on your agreement with your bank.

There is often a balloon payment due at the end of the repayment period, so if this is a concern for you, make sure that your loan either will fully amortize or that you’re paying extra each month to ensure your last payment takes your note to a zero balance.

HELOC Requirements

Like other home equity loans, you’ll need to be able to qualify for a HELOC with a reasonable credit score (ask your lender for specifics), a debt-to-income ratio of about 40% or below, and a high amount of home equity. Most lenders won’t lend more than about 85% of your home’s equity back to you, in case of default.

Of course, there are exceptions to all of these rules of thumb, so it’s very important to consult with multiple lenders before you make your final decision on who will be servicing your HELOC. You’ll also need an appraisal to assess the current value of your home, as well as minimal closing paperwork to finalize and record the loan.

Ready to Find Your HELOC Lender?

There’s no better place to look than HomeKeepr. Not only are all the best mortgage lenders here, they’re also coming to you with recommendations from the people you trust most. Just ask your community for their favorite lenders and you’ll be ready to start your HELOC adventure!

 

What Can You Do With Your Home’s Equity?

If you’re like a lot of long-time homeowners, you’ve probably got a great deal of home equity on your hands right now. If you’ve been considering putting it to work, it’s still a decent time to take out a second mortgage or a HELOC, even as rates are starting to rise. Having so much home equity can enable you to make some very seriously needed changes to your home, either to allow you to age-in-place or to accommodate other lifestyle needs. It’s an opportunity to make major changes or upgrades, but there are certainly some ways that are better than others to use your home’s equity. We’ve got some ideas to get you started.

Freshen Up the Whole Place

There’s nothing better for the value of a house that’s not had much regular care in a while than a general sprucing up. You’ll have to go room by room, as well as take a hard look at your exterior space, to decide which items are tired and in need of repair or replacement. You’d be surprised how much difference some careful clean-up and maintenance work can really make.

A few common exterior items that can really make a tired house look brand new include a new garage door (for houses with street-facing garages), exterior window dressing such as window boxes or updated shutters, tuckpointing for brick homes, or cleaning and resealing your driveway. Interior items that can make a huge impact house-wide include new floor coverings or refinished floors, updated room lighting and under cabinet lighting in kitchens and baths, and a fresh coat of interior paint.

Consider Major Outdoor Upgrades

According to Remodeling Magazine, something simple like adding a wooden deck to your home can improve your home’s value and return as much as 65% of the cost back to you if you were to sell right away. Outdoor living spaces have become all the rage since the pandemic has made vacationing challenging, so it could also be an addition your family would use a lot.

Upgrading your landscaping can also add a lot of curb appeal to the front of your home, which would help if you decided to sell. You could even use your home’s equity to add landscaping that’s far easier to care for than what you have now, like xeriscape plants that require little water or intervention, or simply a better planned landscape that minimizes the need for mowing your lawn.

Make Your Bathroom or Kitchen Universal

Aging in place is becoming a more common goal for people as they age. They want to be in their own homes, and these kinds of upgrades make it possible by creating spaces that will allow for walkers, wheelchairs, and other support tools. Universal bathrooms and kitchens can be amazing ways to use your home’s equity. Universal bathrooms may need wheel-in showers, sinks that are table height, bidets and other sanitary plumbing installed, or even just simple changes like non-slip flooring and better storage added.

Universal kitchens are a bit more involved, often involving sinks, appliances, and workspaces being lowered to a height that can be used by people in wheelchairs or those who simply can’t stand for long periods on hard floors. Better task lighting, more accessible storage in cabinets and other areas, and non-slip tile are also important parts of universal kitchen design.

Still Need Help Deciding?

If you’re not sure how to spend your home’s equity most effectively, it might be time to call in an expert. Your HomeKeepr community can recommend the very best general contractors, plumbers, HVAC, flooring, and even mortgage experts to help you get started on your home’s upgrades. You might be surprised at what someone else sees in your home that can make your life a million times easier (or more fun!) and still fit within your home equity budget. It’s free to join and there’s never any catch when it comes to meeting recommended experts.

Don't Tackle Selling Your Home on Your Own an Agent Can Help

If you're looking to maximize your sale and minimize your effort, you need to work with a real estate professional. In a sellers market like todays, it can be tempting to list your house on your own known as For Sale By Owner (FSBO). But the truth is, a real estate professional can save you time and money by managing every step of the process, from pricing your home to reviewing documents and handling negotiations.

Before you decide to sell your house on your own, here are five reasons why working with an agent is your best bet to maximize the sale of your home.

1. First impressions are everything and an agent knows how to make a great one.

Prepping a house for sale requires a significant amount of time and effort, even though it may seem simple at first glance. Doing it right so it stands out takes expertise and an understanding of what buyers are looking for. An agent considers things like:

• Should you take down any personal art or pictures?
• How much landscaping should you invest in to boost your houses curb appeal?
• What wall colors are most appealing to buyers?

An expert real estate advisor relies on their experience to answer these questions and more so you dont invest in the wrong things. Your time and money are important you shouldn't waste either.

2. Agents have tools to maximize the number of views your home gets.

Put plainly, the more buyers that view your house, the better your return will be. In our current market, homes are receiving 3.8 offers on average per sale, according to recent data from the National Association of Realtors (NAR). While that's promising for the sale of your home, its important to understand your agents role in bringing buyers in.

Agents have multiple tools at their disposal from social media to agency resources to ensure your home is viewed by more prospective buyers. Leveraging the tools available to your agent and your agents expertise may help boost your sale price as well.

3. An agent wont miss anything in the fine print.

Your agent can also save you time by taking any guesswork out of navigating the required documentation. Today, more disclosures and regulations are mandatory, meaning the number of legal documents you need to juggle is growing.

Because there's so much to take care of, it can be hard to truly understand all of the requirements and the fine print. That's where an expert advisor can truly shine. They've been through the process before and can be your guide to avoid any costly missteps.

4. Expert advisors know the market and how to price your home.

Another way your agent maximizes the sale of your home is by making sure its priced right. Real estate professionals have the experience to compare your house to recently sold homes in your area. They also understand the market at large and can factor in any upgrades you've completed to your home. Combining these factors is the key to making sure your home is priced to move quickly and at a competitive price.

When you FSBO, you're operating without this expertise. Even with your own research, you may not find the most up-to-date information and could risk setting a price that's inaccurate or unrealistic. If you price your house too high, you could turn buyers away before they're even in the front door. This could also cause problems when its time for the appraisal.

5. Your agent will be an expert negotiator.

In addition to their experience navigating sales, real estate professionals understand how to negotiate every aspect of a deal. They also know all the parties that will be involved with the sale, including:

• The buyer, who wants the best deal possible.
• The buyers agent, who will use their expertise to advocate for the buyer.
• The inspection company, which works for the buyer and will almost always find concerns with the house.
• The appraiser, who assesses the property's value to protect the lender.

An agent relies on their experience and training to make the right moves during the negotiation. They'll know what levers to pull, how to address each individuals concerns, and when you may want to get a second opinion. Selling your house as a FSBO means you'll need to be prepared to have these conversations on your own.

Bottom Line

Selling a house takes time, effort, and expertise don’t go at it alone. Lets connect to make sure you have an expert on your side to make the most of your sale

Understand Your Options To Avoid Foreclosure

Even though experts agree there's no chance of a large-scale foreclosure crisis, there are a number of homeowners who may be coming face-to-face with foreclosure as a possibility. And while the overall percentage of homeowners at risk is decreasing with time (see graph below), that's little comfort to those individuals who are facing challenges today.If you haven't taken advantage of the forbearance period, it may be time to research and understand your options. It starts with knowing what foreclosure is. Investopedia defines it like this:

Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Typically, default is triggered when a borrower misses a specific number of monthly payments . . .

The good news is, there are alternatives available to help you avoid having to go through the foreclosure process, including:

• Reinstatement
• Loan modification
• Deed-in-lieu of foreclosure
• Short sale

But before you go down any of those paths, its worth seeing if you have enough equity in your home to sell it and protect your investment.

Understand Your Options: Sell Your House

Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

In todays real estate market, many homeowners have far more equity in their homes than they realize. Over the last year, buyer demand has been high, but housing supply has been low. That's led to a substantial increase in home values. When prices rise, so does the amount of equity you have in your house.

According to CoreLogic, on average, homeowners gained 33,400 in equity over the last 12 months, and the average equity on mortgaged homes is now 216,000 (see map below):So, what does that mean for you? Over the past year, chances are your homes value and therefore your equity has risen dramatically. If you've been in your home for a while, the mortgage payments you've made over time chipped away at the balance of your loan. If your homes current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage.

Frank Martell, President and CEO of CoreLogic, elaborates on how equity can help:

Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic. These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market.

Dont Go at It Alone Lean on Experts for Advice

To find out what your house is worth in todays market, work with a local real estate professional. Well be able to give you an estimate of what your house could sell for based on recent sales of similar homes in your area. Since home prices are still appreciating, you may be able to sell your house to avoid foreclosure.

If you find out that you have to pursue other options, your agent can help with that too. Well be able to connect you with other professionals in the industry, like housing counselors who can look into your unique situation and offer advice on next steps if selling isn't the best alternative.

Bottom Line

If you're a homeowner facing hardship, lets connect to explore your options and see if you can sell your house to avoid foreclosure.

Home Price Appreciation Is Skyrocketing in 2021. What About 2022?

One of the major story lines over the last year is how well the residential real estate market performed. One key metric in the spotlight is home price appreciation. According to the latest indices, home prices are skyrocketing this year.

Here are the latest percentages showing the year-over-year increase in home price appreciation:

• The House Price Index (HPI) from the Federal Housing Finance Agency (FHFA): 18.8%
• The S. National Home Price Index from S&P Case-Shiller: 18.6%
• The Home Price Insights Report from CoreLogic: 18%

The dramatic increases are seen at every price point and in all regions of the country.

Increases Are Across Every Price Point

According to the latest Home Price Index from CoreLogic, each price range is seeing at least a 19% increase year-over-year:

Increases Are Across Every Region in the Country

Every region in the country is experiencing at least a 14.9% increase in home price appreciation, according to the Federal Housing Finance Agency (FHFA):

Increases Are Across Each of the Top 20 Metros in the Country

According to the U.S. National Home Price Index from S&P Case-Shiller, every major metro is seeing at least a 13.3% growth in prices (see graph below):

What About Price Appreciation in 2022?

Prices are the result of the balance between supply and demand. The demand for single-family homes has been strong over the last 18 months. The supply of houses available for sale was near historic lows. However, there's some good news on the supply side. Realtor.com reports:

432,000 new listings hit the national housing market in August, an increase of 18,000 over last year.

There will, however, still be a shortage of supply compared to demand in 2022. CoreLogic reveals:

Given the widespread demand and considering the number of standalone homes built during the past decade, the single-family market is estimated to be undersupplied by 4.35 million units by 2022.

Yet, most forecasts call for home price appreciation to moderate in 2022. The Home Price Expectation Survey, a survey of over 100 economists, investment strategists, and housing market analysts, calls for a 5.12% appreciation level next year. Here are the 2022 home appreciation forecasts from the four other major entities:

1. The National Association of Realtors (NAR): 4.4%
2. The Mortgage Bankers Association (MBA): 8.4%
3. Fannie Mae: 5.1%
4. Freddie Mac: 5.3%

Price appreciation is expected to slow in 2022 when compared to the record highs of 2021. However, it is still expected to be greater than the annual average of 4.1% over the last 25 years.

Bottom Line

If you owned a home over the past year, you've seen your household wealth grow substantially, and you'll see another nice boost in 2022. If you're thinking of buying, consider buying now as prices are forecast to continue increasing through at least next year.

 

How Much Paint Do I Need?

Paint, paint, glorious paint! It’s one of the least expensive materials you can buy for your house that delivers one of the biggest visual punches. It also fixes a myriad of problems. Got a tired exterior? Paint. The interior of your home feels like it’s closing in on you? Paint. Bought a couch that you love, but clashes with everything else? PAINT.

In all seriousness, paint is a great way to brighten, enliven, and give your home a serious face lift – inside and out. But once you’ve picked a color, what comes next? How do you choose the right paint and actually buy the right amount for your project?

Choosing Your Perfect Paint

Choosing paint can be overwhelming. There are always a variety of grades and characteristics to choose among, leaving a lot of people very confused and frustrated. Here are a few things to watch out for when picking your paint:

• Composition. There are other options for paint, but for most homeowners, the biggest choice is between latex and oil. Latex paint offers easy clean-up, but can be slightly soft when fully cured, making it a poor choice for high traffic areas. On the other hand, oil is far more difficult to clean up, but will pretty much go over anything and harden much better to handle years and years of abuse.
• Sheen. Your walls are your own, and only you can decide just how shiny they should be. When you’re choosing your paint sheen, it might feel like a no-brainer to go with the shiniest paint out there, but take a moment and consider that glossy paint shows a lot of sins, and few houses are really perfect. So if your walls or other surfaces are less than perfect, the flaws could stand out badly. On the other hand, something like eggshell hides a lot of sins, but can be extremely difficult to clean, should it get dirty.
• Durability. Paint is paint is paint, right? Sadly, not even remotely. There are paints that start around $20 a gallon and there are paints that could be four times as much. Both are priced the way they are because of different characteristics they possess, but durability is a huge factor in the pricing. Cheap paint is just that: cheap. It’s generally not meant to last very long, which will leave you having to redo it again soon. On the other hand, top of the line paint is likely impregnated with UV-resistant materials, weather resistant chemicals, and other fancy stuff to keep your paint looking good for longer.
• Coats to Coverage. Most paints will tell you how many coats it’ll take to cover your wall (generally assuming you’ve properly primed first). This is really important information when it comes to figuring out how much paint you need. One coat coverage from a $50 gallon of paint is often still cheaper than three coat coverage from a $20 gallon.

Doing the Paint Math

As far as how to calculate your paint needs, it’s important to keep in mind that you’re definitely going to have some loss to waste, so your calculations are really more like estimates. Painting isn’t a precise science; it’s more of an art, and how much paint ends up being used is influenced by your tools and techniques, as well as the paint and walls themselves.

To calculate your paint needs, simply multiply your surface height by its length, in feet. So, if you’re painting a 10 foot by 20 foot wall, you’d need coverage for 200 square feet. Check the paint you’re interested in to see how many feet the bucket should cover and in how many coats. A lot of paint gallons cover approximately 250 square feet, which would be great for your first coat on this wall.

If you need two or more coats, you’ll need two or more times that much paint. It’s better to round up than down, since you’re almost certainly going to find spots you want to touch-up later. Plus, if your paint is custom tinted, you’re going to get a much better match if it’s all done together. Even in the age of computerized paint mixing, you can still end up with a day when the machine is feeling a bit off.

Not Ready for Painting and Math?

Absolutely not a problem. This is why so many people trust their HomeKeepr communities to provide recommendations for the very best painters in their area. Just log in to search for the services you need, and you’re done. All you need to do from there is pick your colors!

 6 Reasons to Celebrate National Homeownership Month

Our homes are so much more than the houses we live in. For many, they've also become our workplaces, schools for our children, and safe harbors in which we've weathered the toughest moments of a global pandemic. Today, 65.6% of Americans call their homes their own, a rate that has risen to its highest point in 8 years.

As National Homeownership Month kicks off this June, homeowners have every reason to celebrate. A survey by Gallup just ranked real estate as the best investment you can make for the eighth year in a row. However, unlike other investment options, the benefits of owning a home aren't purely financial. Here are the top ways Americans are winning by owning a home.

Non-Financial Benefits:

1. Civic Participation: Owning a home is owning a part of your neighborhood. Homeowners have a stronger connection to their neighborhoods and are more committed to volunteer work and other ways to get involved.

2. Pride of Ownership: Owning a home is having a space that is uniquely yours. You can customize it to your personal liking and make it reflect your personality and values.

3. A Safe Space: Owning a home gives you a sense of security and privacy two things that have become even more valuable as we've tackled the challenges of the recent health crisis.

Financial Benefits:

1. Forced Savings: Owning a home builds equity. Your equity grows with each payment you make toward your mortgage. This form of forced savings can be used down the road to help you accomplish your biggest financial goals.

2. Appreciation: Owning a home is making an investment that steadily gains value, and experts project home values will continue to rise in the years to come.

3. Stability: Owning a home means having better control over your future housing payments. Over the years, a mortgage stays relatively steady, but rent costs continue to rise.

Bottom Line

If you own your home, take time this June to celebrate the ways homeownership has added value to your life. If you hope to become a homeowner this year, lets connect today to take the first steps toward achieving your goal.

 

Where Do Experts Say the Housing Market Is Heading?

As we enter the middle of 2021, many are wondering if well see big changes in the housing market during the second half of this year. Here's a look at what some experts have to say about key factors that will drive the industry and the economy forward in the months to come.

realtor.com

. . . homes continue to sell quickly in what's normally the fastest-moving time of the year. This is in contrast with 2020 when homes sold slower in the spring and fastest in September and October. While we expect fall to be competitive, this years seasonal pattern is likely to be more normal, with homes selling fastest from roughly now until mid-summer.

National Association of Realtors (NAR)

Sellers who have been hesitant to list homes as part of their personal health safety precautions may be more encouraged to list and show their homes with a population mostly vaccinated by the mid-year.

Danielle Hale, Chief Economist at realtor.com

Surveys showed that seller confidence continued to rise in April. Extra confidence plus our recent survey finding that more homeowners than normal are planning to list their homes for sale in the next 12 months suggest that while we may not see an end to the sellers market, we might see the intensity of the competition diminish as buyers have more options to choose from.

Freddie Mac

We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.

Bottom Line

Experts are optimistic about the second half of the year. Lets connect today to talk more about the conditions in our local market.

 

Sellers Are Ready To Enter the Housing Market

One of the biggest questions in real estate today is, When will sellers return to the housing market? An ongoing shortage of home supply has created a hyper-competitive environment for hopeful buyers, leading to the ultimate sellers market. However, as the economy continues to improve and more people get vaccinated, more sellers may finally be in sight.

The Home Purchase Sentiment Index (HPSI) by Fannie Mae recently noted the percentage of consumer respondents who say its a good time to sell a home increased from 61% to 67%. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, indicates:

Consumer positivity regarding home-selling conditions nearly matched its all-time high. (See graph below):

Fannie Mae isn't the only expert group noticing a rise in the percentage of people thinking about selling. George Ratiu, Senior Economist at realtor.com, shares:

The results of a realtor.com survey . . . showed that one-in-ten homeowners plans to sell this year, with 63 percent of those, looking to list in the next 6 months. Just as encouragingly, close to two-thirds of sellers plan to sell their homes at prices under 350,000, which would offer a tremendous boost to affordable housing for first-time buyers.

Bottom Line

If you're considering selling your house, don't wait for more competition to pop up in your neighborhood. Lets connect today to explore the benefits of selling your house now before more homes come to the market.

 

 

Considering a Yard Pond?

Ponds are increasingly popular water features for homeowners. Having a small decorative pond in your yard can help you unwind, provide a unique ecosystem for certain animals, and just generally add some beauty to your property. With that said, it’s important to realize that installing a yard pond is a bigger task than just digging a hole and adding some water. Before diving into a pond project, it’s important that you stop to consider everything that’s involved with the installation, as well as some of the things you’ll need for upkeep once the pond is finished. This isn’t meant to discourage you, just to make you sure that you’re aware of all of this before you get too far into your planning.

Installing a Yard Pond

Yard ponds can range in size between a small 550-gallon pond to one that holds 2,000 gallons or more, so it’s important to take the time to plan exactly how large you want your pond to be. Try outlining your pond with a rope to get an idea of its dimensions, then add an extra 2 feet or so around the entire border to account for transitionary plants, rocks, and other border features. You’ll want to keep an eye on the area once you have it outlined, since most pond plants require at least six hours of sunlight or more per day to thrive.

You’ll also need to have a way to get power to the pond to power any pumps or fountains that you use to circulate water, and a means to add additional water as needed if your local rainfall isn’t sufficient to counter evaporation. Other necessities include a pond liner to keep the water from simply soaking into the ground, any fish or plants that you want to add to the pond once it’s installed, and a pond net or skimmer to keep leaves, seed pods, and similar items from clogging up your pump in the spring and fall. In addition to all of that, you may also need permits or other legal documents before you can break ground, and you will likely have to have a survey to mark underground pipes and wires to avoid potential fines.

Yard Pond Upkeep

Once a pond is installed, there are some things you should keep in mind as part of your ongoing maintenance plan. You’ll need to check your pond every week for leaves, debris, and other things that might gunk up the works and potentially harm fish or plants, though this can be negated with a pond net during the fall or other times when a lot of potential debris is likely. Checking the water level is also important, especially during the summer. If you have cold winters, you may also need a heater or air bubbler to keep everything from freezing as well. In most cases you will only need to spend around 15 to 30 minutes a week checking on these issues, but that can vary depending on where you live.

Another thing you’ll want to consider is insects. While dragonflies and similar insects are often a welcome sight around ponds, water features like this can also be a breeding ground for mosquitoes if you aren’t careful. Making sure that the water is sufficiently circulated or adding products that are designed to prevent mosquito growth without harming fish or other animals are good ways to take care of this problem, though some of these treatments may have to be repeated multiple times per year. Certain fish may also help to keep the mosquito population under control.

Ready to Build Your Pond?

A yard pond can be a major undertaking, but it can really pay off once it’s finished. If you’re not sure where to start, it’s a good idea to consult with a landscaper or water feature installer in your area to see what will work best for your property. HomeKeepr can help you connect with the pros you need to make your pond dreams a reality; sign up for a free account today to get started.

Experts Say Home Prices Will Continue to Appreciate

Its clear that consumers are concerned about how quickly home values are rising. Many people fear the speed of appreciation may lead to a crash in prices later this year. In fact, Google reports that the search for When is the housing market going to crash? has actually spiked 2450% over the past month.

In addition, Jim Dalrymple II of Inman News notes:

One of the most noteworthy things that came up in Inmans conversations with agents was that every single one said they've had conversations with clients about whether or not the market is heading into a bubble.

To alleviate some of these concerns, lets look at what several financial analysts are saying about the current residential real estate market. Within the last thirty days, four of the major financial services giants came to the same conclusion: the housing market is strong, and price appreciation will continue. Here are their statements on the issue:

Goldman Sachs Research Note on Housing:

Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. … consumer surveys indicate that household buying intentions are now the highest in 20 years. As a result, the model projects double-digit price gains both this year and next.

Joe Seydl, Senior Markets Economist, J.P.Morgan:

Home buyers interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don't expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.

Morgan Stanley, Thoughts on the Market Podcast:

Unlike 15 years ago, the euphoria in today’s home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.

Merrill Lynchs Capital Market Outlook:

There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle. Coronavirus-related preference changes have also sharply boosted home buying demand. At the same time, supply is unusually tight, with available homes for sale at record-low levels. Double-digit price gains are rationing the supply.

Bottom Line

If you're concerned about making the decision to buy or sell right now, lets connect to discuss what's happening in our local market.

 

Planning to Move? You Can Still Secure a Low Mortgage Rate on Your Next Home

This year, mortgage rates have started to slowly climb above recent record-breaking lows. Many homeowners planning to move may feel like they've missed the chance to score a great rate on their next mortgage. In reality, there's still time to secure a rate far below the historic norm. Here's why.

After creeping up for seven consecutive weeks, average mortgage rates have dropped more recently (See graph below). With rates taking a slight dip over the past two weeks at the same time the inventory of houses for sale is so low, homeowners today are sitting in the optimal seat to sell. What's the advantage of selling your house now? Securing a low mortgage rate on your next home.To take advantage of todays real estate market, experts are encouraging homeowners to act now before interest rates climb. Danielle Hale, Chief Economist at realtor.com, explains:

mortgage rates slid for a second week … but we don't expect rates to stay at this level for too long.

Hale continues to say:

For sellers, getting in early optimizes odds of a quick sale at a good price before there's too much competition, but that means acting now In this environment, sellers probably really cant go wrong, and that's especially true in the nations hottest housing markets where homes are selling quickly and getting the greatest number of viewers online.

Most experts agree that rates will continue to trend upward. Sam Khater, Chief Economist at Freddie Mac, states:

Despite the pause in mortgage rates recently, we expect them to increase modestly for the remainder of this year.

In addition, Freddie Mac recently released their Quarterly Forecast, which notes:

We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022. (See graph below):

While buyers everywhere want to secure the lowest rate possible, its important to remember that todays rates are still much lower than the historic norm. Odeta Kushi, Deputy Chief Economist at First American, emphasizes:

While mortgage rates have trended up in recent months, they are still historically low, so relative to one year ago, housing actually is still more affordable and that's really thanks to this low mortgage rate environment we find ourselves in.

Bottom Line

If you're thinking of moving, don't miss the opportunity to score a great rate on your next home mortgage. Lets connect today so you can get your house ready to sell and find your dream home while mortgage rates are still low.