Homeowner Wealth Increases Through Growing Equity This Year

Building financial wealth and stability remains one of the top reasons Americans choose to own a home, and as a homeowner, your wealth often grows without you even realizing it. In a recent paper published by the Urban Institute, Home Ownership is Affordable Housing, author Mike Loftin illustrates how homeowners increase their equity and their wealth simply by making monthly mortgage payments:

The principal portion that reduces the loan balance builds the homeowners equity. In doing so, the principal payments behave like an automatic savings account. The principal payment is not money going out; it is money staying in.

But home equity the difference between the value of your home and what you currently owe isn't just built through your monthly principal payments. Home price appreciation plays a vital role in growing your equity and, ultimately, your wealth.

As Freddie Mac explains:

Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This wealth is built, in large part, through the creation of equity Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.

Homeowners Continue To See Equity Increase

CoreLogic recently published their latest Homeowner Equity Insights Report, and it shows continued growth in equity amidst record home price appreciation. The report provides several key takeaways, all of which point to rising wealth for homeowners:

1. The average equity gain of mortgaged homes during the past year was 33,400
2. The current average equity of mortgaged homes is greater than 216,000
3. There was a 6% increase in total homeowner equity over the past year
4. Total U.S. homeowner equity has reached nearly 1.9 trillion

Here, you can see the equity gains by state:

Equity Provides Homeowners with Flexibility

In addition to being a critical tool in building wealth, a homeowners equity also provides significant flexibility. When you sell your house, the accumulated equity comes back to you in the sale. Recent increases in home equity coupled with record-low mortgage rates mean it could be the perfect time for homeowners looking to make a move.

Mark Fleming, Chief Economist at First American, notes:

Existing homeowners today are sitting on record amounts of equity. As homeowners gain equity in their homes, the temptation grows to list their current home for sale and use the equity to purchase a larger or more attractive home.

Increasing equity also helps families facing challenges brought on by the pandemic. Frank Martell, President and CEO of CoreLogic, explains in the recent Homeowner Equity Insights Report:

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, especially for older homeowners and baby boomers who’ve experienced years of price appreciation.

Bottom Line

Home equity has always been a powerful wealth-building tool, and homeowners continue to see their financial stability increase. Lets connect today so you can better understand how much equity you have in your current home or if youre ready to take the next step in building your savings as a homeowner.

 

 Homebuyers: Hang in There

 

Some Highlights

• Todays sellers market provides unique challenges and benefits for buyers.
• Current low interest rates wont last forever, and home prices are forecast to rise.
• If you're a homebuyer, hang in there. Homeownership improves your quality of life, and the long-term benefits outweigh the short-term challenges.

 

The Right Expert Will Guide You Through This Unprecedented Market

In a normal market, its good to have an experienced guide coaching you through the process of buying or selling a home. That person can advise you on important things like pricing your home correctly or the first steps to take when you're ready to buy. However, the market were in today is far from normal. As a result, an expert isn't just good to have by your side an expert is essential.

Todays housing market is full of extremes. Mortgage rates hovering near record-lows are driving high buyer demand. On the other hand, an absence of sellers is creating record-low housing inventory. This imbalance in supply and demand is leading to a skyrocketing rate of bidding wars and more houses selling over their asking price. This is driving home price appreciation and gains in home equity. These market conditions aren't just extreme they can be overwhelming. Having a trusted expert to coach you through the process of buying and selling a home gives you clarity, confidence, and success through each step.

Here are just a few of the ways a real estate expert is invaluable:

• Contracts We help with the disclosures and contracts necessary in todays heavily regulated environment.
• Experience Were well-versed in real estate and experienced with the entire sales process, including how its changed over the past year.
• Negotiations We act as a buffer in negotiations with all parties throughout the entire transaction while advocating for your best interests.
• Education We simply and effectively explain todays market conditions and decipher what they mean for your individual goals.
• Pricing We help you understand todays real estate values when setting the price of your home or making an offer to purchase one.

A real estate agent can be your essential guide through this unprecedented market, but truth be told, not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding the right agent should be your top priority when you're ready to buy or sell a home.

So, how do you choose the right expert?

It starts with trust. You'll have to be able to trust the advice your agent is going to give you, so make sure you're connected to a true professional. An agent cant give you perfect advice because its impossible to know exactly what's going to happen at every turn especially in this unique market. A true professional expert can, however, give you the best possible advice based on the information and situation at hand, helping you make the necessary adjustments and best decisions along the way. The right agent the professional will help you plan the steps to take for success, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions toward your goals. That's exactly what you want and deserve.

Bottom Line

Its crucial right now to work with a real estate expert who understands how the market is changing and what that means for home buyers and sellers. If you're planning to make a move this year, lets connect so you have someone who can answer your questions, give you the best advice, and guide you along the way.

 

 

Clever Uses for Useless Spaces

There are a lot of areas around the home that may seem kind of useless or wasted. Partial dividing walls, areas below (or even above) a staircase, or little nooks or alcoves that were created by the house’s unique design are all common examples. You might not think much about these areas, but if you consider them for a moment, you might see how they could be some serious missed opportunities. With a little bit of creativity, though, you can change all of that for the better.

That blank wall around a doorway doesn’t have to stay empty, and the space under the stairs isn’t just for boy wizards anymore. There are a number of ways that you can revamp these empty and otherwise useless spaces and make your home more functional and fun in the process. Here are just a few ideas to get you started.

Surfaces and Seating

Look around your home at the various nooks and crannies that seem to just be empty space. With a little bit of work, it’s easy to add seating, tables, desks, and more to these areas and make them much more functional. Once you start thinking creatively, a whole wealth of options opens up.

Some of the open space in your foyer could have benches added for you and your family to sit and get your shoes on in the morning, possibly with bins that slide under the benches to keep those shoes in when they’re not being worn. A little alcove could be a great place to install a small desk or computer workstation for homework, bill paying, creative writing, or even grabbing a quick bite to eat. You could even stick a chaise lounge or part of a sectional couch in a largely unused corner to give people a private place to wind down or relax. And this is just the tip of the iceberg.

Storage and Organization

Some of these seemingly useless places can be a great place to add storage solutions to your home. Shelves and cabinets can instantly transform empty walls, giving you additional storage even in the small spaces around doorways or in closets. Drawers are also great additions, as are sliding cabinet racks that pull out and then slide fully back into the wall. There are even more options available if you really want to get creative.

If your kitchen has a small dividing wall separating it from other rooms, consider adding a built-in wine rack within it to hold a few of your favorite bottles. A pull-out vertical cabinet next to the sink or stove can also be a great area to add a spice rack or store cutting boards. Bookcases are relatively easy to install, and if you have a large unused area, it might even be an ideal place to add a built-in pantry. Not only do details like these really liven up your home, but they can also help reduce clutter in other areas and make everything a bit more organized in general.

A Use for Every Space

You might be surprised at just how much space there is in your home for these types of projects. The options can increase even more if you start looking at the outside of your home or in the garage, too. While some projects might require a bit of work, others are simple modifications that can really go a long way toward improving both the look and functionality of your home.

If you aren’t sure where to start, consider bringing in an interior designer or general contractor to discuss what you want and see what your options are. HomeKeepr can help you find the right pro for the job, too. Sign up for a free account today to get connected with professionals in your area that can help make your renovation dreams come true. They may even be able to offer up suggestions you haven’t even thought of yet.

Hope Is on the Horizon for Todays Housing Shortage

The major challenge in todays housing market is that there are more buyers looking to purchase than there are homes available to buy. Simply put, supply cant keep up with demand. A normal market has a 6-month supply of homes for sale. Anything over that indicates its a buyers market, but an inventory level below that threshold means were in a sellers market. Todays inventory level sits far below the norm.

According to the Existing Home Sales Report from the National Association of Realtors (NAR):

Total housing inventory at the end of April amounted to 1.16 million units, up 10.5% from March’s inventory and down 20.5% from one year ago (1.46 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, slightly up from March’s 2.1-month supply and down from the 4.0-month supply recorded in April 2020. These numbers continue to represent near-record lows.

Basically, while we are seeing some improvement, were still at near-record lows for housing inventory (as shown in the graph below). Here's why. Since the pandemic began, sellers have been cautious when it comes to putting their homes on the market. At the same time that fewer people are listing their homes, more and more people are trying to buy them thanks to todays low mortgage rates. The influx of buyers aiming to capitalize on those rates are purchasing this limited supply of homes as quickly as they're coming to market. This inventory shortage doesn't just apply to existing homes that are already built. When it comes to new construction, builders are trying to do their part to bring more newly built homes into the market. However, due to challenges with things like lumber supply, they're also not able to keep up with demand. In their Monthly New Residential Sales report, the United States Census Bureau states:

The seasonally adjusted estimate of new houses for sale at the end of April was 316,000. This represents a supply of 4.4 months at the current sales rate.

Sam Khater, Chief Economist at Freddie Mac, elaborates:

In the span of five decades, entry level construction fell from 418,000 units per year in the late 1970s to 65,000 in 2020.

While in 2020 only 65,000 entry-level homes were completed, there were 2.38 million first-time homebuyers that purchased homes. Not all renters looking to purchase their first home were in the market for entry-level homes, however, the large disparity illustrates the significant and rapidly widening gap between entry-level supply and demand.

Despite todays low inventory, there is hope on the horizon.

Regarding existing home sales, Sabrina Speianu, Senior Economic Research Analyst at realtor.com, explains:

In May, newly listed homes grew by 5.4% on a year-over-year basis compared to the earlier days of the COVID-19 pandemic last year

In May, the share of newly listed homes compared to active daily inventory hit a historical high of 44.4%, 17.3 percentage points higher than last year and 15.1 percentage points above typical levels seen in 2017 to 2019. This is a reflection of quickly selling homes and, for buyers, it means that while they can expect fresh new listings every week, they will have to be prepared to move quickly on desirable homes.

As for newly built homes, builders are also confident about what's ahead for housing inventory. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), shares:

Builder confidence in the market remains strong due to a lack of resale inventory, low mortgage interest rates, and a growing demographic of prospective home buyers.

Things are starting to look up for residential real estate inventory. As the country continues to reopen, more houses are likely to be listed for sale. However, as long as buyer demand remains high, it will take time for the balance between supply and demand to truly neutralize.

Bottom Line

Although it may be challenging to find a house to buy in todays market, there is hope on the horizon. Lets connect to talk about your home search so we can find your dream home this summer.

 

Don't Wait To Sell Your House

Were in the ultimate sellers market right now. If you're a homeowner thinking about selling, you have a huge advantage in todays housing market. High buyer demand paired with very few houses for sale makes this the optimal time to sell for those who are ready to do so. Whatever the move you want to make looks like, here's an overview of what's creating the prime opportunity to sell this summer.

High Buyer Demand

Demand is strong, and buyers are actively searching for homes to purchase. In the Realtors Confidence Index Survey published monthly by the National Association of Realtors (NAR), buyer traffic is considered very strong in almost every state. Homebuyers aren't just great in number right now they're also determined to find their dream home. NAR shows the average home for sale today receives five offers from hopeful buyers. These increasingly frequent bidding wars can drive up the price of your house, which is why high demand from competitive homebuyers is such a win for this summers sellers.

Low Inventory of Houses for Sale

Purchaser demand is so high, the market is running out of available homes for sale. Danielle Hale, Chief Economist at realtor.com, explains:

For most sellers listing sooner rather than later could really pay off with less competition from other sellers and potentially a higher sales price… They'll also avoid some big unknowns lurking later in the year, namely another possible surge in COVID cases, rising interest rates and the potential for more sellers to enter the market.

NAR also reveals that unsold inventory sits at a 2.4-months supply at the current sales pace. This is far lower than the historical norm of a 6.0-months supply. Homes are essentially selling as fast as they're hitting the market. Below is a graph of the existing inventory of single-family homes for sale:At the same time, homebuilders are increasing construction this year, but they cant keep up with the growing demand. While reporting on the inventory of newly constructed homes, the U.S. Census Bureau notes:

The seasonally adjusted estimate of new houses for sale at the end of April was 316,000. This represents a supply of 4.4 months at the current sales rate.

What Does This Mean for You?

If you're thinking of putting your house on the market, don't wait. A seller will always negotiate the best deal when demand is high and supply is low. That's exactly what's happening in the real estate market today.

Bottom Line

As vaccine rollouts progress and we continue to see the economy recover, more houses will come to the market. Don't wait for the competition in your neighborhood to increase. If you're ready to make a move, now is the time to sell. Lets connect today to get your house listed at this optimal moment in time.

 

 

Is It Time to Replace Your Windows?

Your windows are one of the most important features of your home. They provide you with natural light and visibility while also giving you the option to let fresh air in when your home gets stuffy. As with everything else in your home, your windows will start to accumulate some wear and tear over time. Eventually they might even have to be replaced. How do you know when it’s really time to replace your windows, or when a little maintenance will keep them in operation for a while longer? While this varies a lot depending on the specific windows that are installed, how well they’re maintained, and what the average temperature and other environmental factors are like, here are a few things you can look out for to see if you need new windows.

Leaks and Drafts

Two big signs that your windows might be having problems are drafts and leaks around your window. Both of these problems can cost you money and make your home less comfortable overall. Drafts can drive up heating and cooling costs, while leaks can cause water damage that in some cases may need a significant amount of work to repair.
Sometimes these issues might not be readily apparent at first. A small leak may disguise itself by traveling along seams in wallpaper or similar wall features, so you may not even discover it until it has been there for a while. Drafts can also start small, requiring you to come toward the window from a certain direction before you feel the draft at all. These small issues can become much larger problems if left to fester over time.

Cracks and Condensation

Visible cracks are also a sign that there is some problem with your windows. These cracks can appear on the frame of the window itself or in the surrounding wall. In some cases, cracks in the window glass may be visible as well. Regardless of where the damage occurs, cracks in your window are bad news, since each crack is a potential entry point for drafts, water, and other problems that could become costly to repair down the line.

Some of these problems may not be immediately visible if you don’t know what you’re looking for. Condensation between the panes of double-pain glass is often seen as a big red flag, since the condensation means that water is getting in somewhere. That little bit of moisture can eventually lead to mold and mildew in your windows as well as other damage occurring within the walls.

Replacing Your Windows

If you do need to replace your windows, finding the right new windows for your home is important. You’ll want to make sure that the windows you choose are well insulated or have other features to help control the temperature in the summer and winter. If you want to add security alarms or other sensors, it’s important that you choose windows that are compatible with these devices as well.

Most people don’t see window installation as a DIY job, since depending on the window layout and materials involved it might be a significant undertaking without assistance. If you think that it’s a bit more than you can handle, don’t be afraid to consult a contractor or professional window installer. They can help with everything from the installation itself to selecting styles and materials that go best with your home.

Whether you aren’t sure of exactly what you need or want to find someone who can handle installation, HomeKeepr has you covered. We help you connect with professionals in your area in a variety of fields, ensuring that you find the exact people you need for your projects. Sign up for a free account today to connect to window installers and contractors in your area. It just takes a minute and you’ll be good to go.