What Do Experts See on the Horizon for the Second Half of the Year?

As we move into the latter half of the year, questions about what's to come are top of mind for buyers and sellers. Near record-low mortgage rates coupled with rising home price appreciation kicked off a robust housing market in the first half of 2021, but what does the forecast tell us about what's on the horizon?

Mortgage Rates Will Likely Increase, but Remain Low

Many experts are projecting a rise in interest rates. The latest Quarterly Forecast from Freddie Mac states:

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.

However, even as mortgage rates rise, the anticipated increase is expected to be modest at most, and still well below historical averages. Rates remaining low is good news for homebuyers who are looking to maximize their purchasing power. The same report from Freddie Mac goes on to say:

While higher mortgage rates will help slow the pace of home sales and moderate house price growth, we expect overall housing market activity will remain robust. Our forecast has total home sales, the sum of new and existing home sales, at 7.1 million in 2021….

Home Price Appreciation Will Continue, but Price Growth Will Likely Slow

Joe Seydl, Senior Markets Economist at J.P. Morgan, projects home prices to continue rising as well, indicating buyers interested in purchasing a home should do so sooner rather than later. Waiting for rates or home prices to fall may not be wise:

Homebuyers 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.

Other experts remain optimistic about home prices, too. The graph below highlights 2021 home price forecasts from multiple industry leaders:

Inventory Remains a Challenge, but There's Reason To Be Optimistic

Home prices are rising, but they should moderate as more housing inventory comes to market. George Ratiu, Senior Economist at realtor.com, notes there are signs that we may see the current inventory challenges lessen, slowing the fast-paced home price appreciation and creating more choices for buyers:

We have seen more new listings this year compared with 2020 in 11 of the last 13 weeks. The influx of new sellers over the last couple of months has been especially helpful in slowing price gains.

New home starts are also showing signs of improvement, which further bolsters hopes of more options coming to market. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), writes:

As an indicator of the economic impact of housing, there are now 652,000 single-family homes under construction. This is 28% higher than a year ago.

Finally, while it may not fundamentally change the market conditions were currently experiencing, another reason to be optimistic more homes might come to market: our improving economy. Mark Fleming, Chief Economist at First American, notes:

A growing economy in the summer months has multiple implications for the housing market. Growing consumer confidence, a stronger labor market, and higher wages bode well for housing demand. While a growing economy and improving public health conditions may also spur hesitant existing owners to list their homes for sale, its unlikely to significantly ease the super sellers market conditions.

Bottom Line

As we look at the forecast for prices, interest rates, inventory, and home sales, experts remain optimistic about what's on the horizon for the second half of 2021. Lets connect today to discuss how we can navigate the market together in the coming months.

 

5 Things Homebuyers Need To Know When Making an Offer

When it comes to buying a house, you're looking for the perfect place to call home. The problem is, in todays market there just aren't that many homes available to purchase. With inventory hovering near record lows and sky-high buyer demand, a multi-offer scenario is the new normal. Here are five things to keep in mind when you're ready to make an offer.

1. Know Your Numbers

Having a complete understanding of your budget and how much house you can afford is essential. That's why you should connect with a lender to get pre-approved for a loan early in the homebuying process. Taking this step shows sellers you're a serious, qualified buyer and can give you a competitive edge in a bidding war.

2. Brace for a Fast Pace

Todays market is dynamic and fast-paced. According to the Realtors Confidence Index from the National Association of Realtors (NAR), the average home is on the market for just 17 days that means from start to finish, a house for sale in todays climate is active for roughly 2.5 weeks. A skilled agent will do everything they can to help you stay on top of every possible opportunity. And, as soon as you find the right home for your needs, that agent will help you draft and submit your best offer as quickly as possible.

3. Lean on a Real Estate Professional

While homebuying may seem like a whirlwind process to you, local real estate agents do this every day, and we know what works. That expertise can be used to give you a significant leg up on your competition. An agent can help you consider what levers you can pull that might be enticing to a seller, like:

• Offering flexible rent-back options to give the seller more time to move out
• Your ability to do a quick close or make an offer that's not contingent on the sale of your current home

It may seem simple, but catering to what a seller may need can help your offer stand out.

4. Make a Strong, but Fair Offer

Lets face it we all love a good deal. In the past, offering at or near the asking price was enough to make your offer appealing to sellers. In todays market, that's often not the case. According to Lawrence Yun, Chief Economist at NAR:

For every listing there are 5.1 offers. Half of the homes are being sold above list price.

In such a competitive market, emotions and prices can run high. Use an agent as your trusted advisor to make a strong, but fair offer based on market value, recent sales, and demand.

5. Be a Flexible Negotiator

If you followed tip #3, you drafted the offer with the sellers needs in mind. That said, the seller may still counter with their own changes. Be prepared to amend your offer to include flexible move-in dates, a higher price, or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). Just remember, there are certain contingencies you don't want to forego. Freddie Mac explains:

Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold as-is, which means the seller wont pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you cant afford to fix.

Bottom Line

When its time to make an offer, its important to consider not just what you need, but what the seller may need too. Lets connect so you have expert advice on this step in the homebuying process to put your best offer on the table.

 

 

Thinking About Upgrading a Skylight?

Skylights can be a great way to add natural light to your home. This can be especially useful for rooms that lack windows or that are otherwise blocked from getting much natural light. Unfortunately, skylights sometimes fall victim to the ravages of time and climate. This may leave you wondering whether you should upgrade or replace those skylights that have been in place for years. In some cases, this can be a pretty big undertaking, so here are a few things to consider before jumping into a skylight upgrade.

Reasons to Upgrade a Skylight

There are a number of issues that can arise with skylights that might prompt an upgrade or replacement. The most obvious is some damage occurring to the skylight from severe weather or other natural events. Even without external damage, though, skylights can also start to leak around the edge seams over time. This is especially prevalent in older skylights that were made with materials that are not as resistant to UV rays and weather as modern materials.

Leaks and damage aren’t the only reasons one might want to upgrade or replace a skylight, however. Some skylight materials can yellow or otherwise become discolored over time, resulting in cloudiness or a gradual decrease in the amount of light that shines through. Fixed-frame skylights were common at one point, but newer skylights may offer the ability to open them or can feature self-venting options to help manage heat buildup within the house. Older skylight designs may also not be as aesthetically pleasing 

Skylight Upgrade Considerations

Regardless of the reason you might want to upgrade your skylight to something newer, there are a few things that you need to keep in mind when considering the type of replacement you want to get. The size of skylights can be deceiving given their angle and location, so proper measurements are vital to ensuring that you get the right size for your skylight replacement. Different skylight types may only be suitable for certain roof pitches as well, so this should be taken into consideration when picking one out to make sure that it won’t cause problems once installed. The materials used in modern skylights can also affect the strength, UV resistance, and overall look of the skylight, so this should be kept in mind when exploring skylight options.

Another important consideration is the timing of your skylight upgrade. Many homeowners who upgrade or replace older skylights often do so when planning other roof work such as a new shingle installation to allow all the work to be done at once. This also ensures that any warranties or guarantees for the skylight and the roof will be activated at the same time so that leaks or other problems can be taken care of regardless of which part of the roof or skylight they’re associated with.

Calling in the Pros

While it’s possible to replace or install a skylight yourself, it can be a real challenge if you don’t have previous experience with roofing or skylight installation. The work can be dangerous if you don’t know what to expect, and if installed incorrectly your new skylight can leak or suffer damage that can lead to even more costly repairs down the road. As a result, it’s often recommended that you hire a roofing contractor or skylight installation specialist to perform any upgrades or other installation work for your skylight.

Fortunately, HomeKeepr can help you find the pro that you need to complete your skylight upgrade. Not only can you connect with roofers and other skylight pros in your area, but creating an account with HomeKeepr is free. Sign up today to get your skylight rejuvenation underway.

Pre-Approval Makes All the Difference When Buying a Home

You may have been told that its important to get pre-approved at the beginning of the homebuying process, but what does that really mean, and why is it so important? Especially in todays market, with rising home prices and high buyer competition, its crucial to have a clear understanding of your budget so you stand out to sellers as a serious homebuyer.

Being intentional and competitive are musts when buying a home right now. Pre-approval from a lender is the only way to know your true price range and how much money you can borrow for your loan. Just as important, being able to present a pre-approval letter shows sellers you're a qualified buyer, something that can really help you land your dream home in an ultra-competitive market.

With limited housing inventory, there are many more buyers active in the market than there are sellers, and that's creating some serious competition. According to the National Association of Realtors (NAR), homes are receiving an average of 5.1 offers for sellers to consider. As a result, bidding wars are more and more common. Pre-approval gives you an advantage if you get into a multiple-offer scenario, and these days, its likely you will. When a seller knows you're qualified to buy the home, you're in a better position to potentially win the bidding war.

Freddie Mac explains:

By having a pre-approval letter from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don’t already have one.

Every step you can take to gain an advantage as a buyer is crucial when todays market is constantly changing. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You're going to need guidance to navigate these waters, so its important to have a team of professionals such as a loan officer and a trusted real estate agent making sure you take the right steps and can show your qualifications as a buyer when you find a home to purchase.

Bottom Line

In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your homebuying budget, but it shows sellers how serious you are about purchasing a home.

 

Demand for Vacation Homes Is Still Strong

The pandemic created a tremendous interest in vacation homes across the country. Throughout the last year, many people purchased second homes as a safe getaway from the challenges of the health crisis. With many professionals working from home and many students taking classes remotely, it made sense to see a migration away from cities and into counties with more vacation destinations.

The 2021 Vacation Home Counties Report from the National Association of Realtors (NAR) shows that this increase in vacation home sales continues in 2021. The report examines sales in counties where vacant seasonal, occasional, or recreational use housing account for at least 20% of the housing stock and compares that data to the overall residential market.

Their findings show:

• Vacation home sales rose by 16.4% to 310,600 in 2020, outpacing the 5.6% growth in total existing-home sales.
• Vacation home sales are up 57.2% year-over-year during January-April 2021 compared to the 20% year-over-year change in total existing-home sales.
• Home prices rose more in vacation home counties the median existing price rose by 14.2% in vacation home counties, compared to 10.1% in non-vacation home counties.

This coincides with data released by Zelman & Associates on the increase in sales of second homes throughout the country last year.

As the data above shows, there is still high demand for second getaway homes in 2021 even as the pandemic winds down. While we may see a rise in second-home sellers as life returns to normal, ongoing low supply and high demand will continue to provide those sellers with a good return on their investment.

Bottom Line

If you're one of the many people who purchased a vacation home during the pandemic, you're likely wondering what this means for you. If you're considering selling that home as life returns to normal, you have options. There are still plenty of buyers in the market. If, on the other hand, you want to keep your second home, enjoy it! Current market conditions show that its a good ongoing investment.

 

 

Small Changes Make Big Bathroom Impacts

Nobody likes a small bathroom. Unfortunately, a lot of houses have them. If you live in a home with a bathroom that makes you feel a bit claustrophobic, you might think that there isn’t much you can do without some major (and majorly costly) renovations. This may not be the case, though. There are actually a number of small changes that you can make to your bathroom to make it not only appear bigger, but possibly even give you some more space to work with.

Bear in mind that some of these options are a matter of personal taste. You’ll need to think about how these would work with your own personal style preferences. With that said, even if you only use one or two of these suggestions, you may be surprised at how big of a change they can make in your bathroom … all without having to tear down a wall or anything.

Change Up the Look

The first thing that you should do is stop and take a good look at your bathroom. Are the walls some dark, unappealing color that was last seen in the wilds of the 1970s? Does the lighting give everything kind of a dull yellow tint or cast some big shadows everywhere? Did some unfortunate soul decide that the bathroom really was the place for some deep-pile carpeting? The look of your bathroom can have a big effect on how open (or not) it appears, and in many cases can make the bathroom seem smaller or more unpleasant than it actually is.

Some options for fixing this include adding mirrors (which are always useful in the bathroom anyway), painting or adding wallpaper to cover up dark or grungy walls, and replacing light fixtures with something that will give you a bit more illumination everywhere. Try painting one wall a different complementary color as an accent. Choose wallpaper with repeating patterns but also with ample open space between repetitions. Paint your cabinets or add light-colored veneer to help lighten up the space. The lighter and more inviting the bathroom is, the larger it will seem.

Revamp Your Storage

Another thing that can make a bathroom feel small is clutter. If every available surface seems covered with soaps, styling products, makeup, or manscaping tools, it’s going to trigger that part of your brain that doesn’t like crowded spaces every time you enter the room. This is where good storage can come into play, since it will give you a place for all that clutter, so you don’t have to just shove everything into an unorganized mess in the cabinet.

Consider installing rotating storage or under-shelf racks in your cabinets to make organizing easier. Adding a high shelf with a towel rack under it can also help, letting you move towels out of your cabinet and position them closer to your bath or shower without taking up precious floor space. Hanging a multi-panel medicine cabinet is also a great idea, since it gives you more storage for small items and medicines while also adding additional mirrors to the bathroom. Once you deal with some of the clutter on your surfaces, you’ll be surprised at how much more open the bathroom seems.

Bringing the Bathroom to Life

If you aren’t exactly sure how to revitalize your bathroom, don’t be afraid to ask for help. Painters and interior designers may have suggestions on how to change the look and functionality of your bathroom without breaking the bank and can assist you in picking colors and other options to really open the place up. They may have additional suggestions based on the actual layout of your bathroom as well, helping you to feel more comfortable in the bathroom without all the cost of significant renovation.

HomeKeepr can help you to find the pros you need to make your bathroom revamp a reality. Sign up for a free account today to find local pros in your area that can get the job done. It’s quick, it’s easy, and it’s one more little thing that will make a big difference in your bathroom revitalization project.

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.