What Do Experts Say About Todays Mortgage Rates?

Mortgage rates are hovering near record lows, and that's good news for todays homebuyers. The graph below shows mortgage rates dating back to 2016 and where today falls by comparison.

Generally speaking, when rates are low, you can afford more home for your money. That's why experts across the industry agree todays low rates present buyers with an incredible opportunity. Here's what they have to say:

Sam Khater, Chief Economist at Freddie Mac, points out the historic nature of todays rates:

As the economy works to get back to its pre-pandemic self, and the fight against COVID-19 variants unfolds, owners and buyers continue to benefit from some of the lowest mortgage rates of all-time.

Mark Fleming, Chief Economist at First American, talks about how rates impact a buyers bottom line:

Mortgage rates are generally the same across the country, so a decline in mortgage rates boosts affordability equally in each market.

Danielle Hale, Chief Economist at realtor.com, also notes the significance of todays low rates and urges buyers to carefully consider their timing:

Those who haven't yet taken advantage of low rates to buy a home or refinance still have the opportunity to do so this summer.

Hale goes on to say that buyers who don't act soon could see higher rates in the coming months, negatively impacting their purchasing power:

We expect mortgage rates to fluctuate near historic lows through the summer before beginning to climb this fall.

And while mortgage rates are still low today, the data from Freddie Mac indicates rates are fluctuating ever so slightly right now, as they moved up one week before inching slightly back down in their latest release. Its important to keep in mind the influence rates have on your monthly mortgage payment.

Even small increases can have a big impact on what you pay each month. Trust the experts. Todays rates give you opportunity and flexibility in what you can afford. Don't wait on the sidelines and hope for a better rate to come along; the rates were seeing today are worth capitalizing on.

Bottom Line

Mortgage rates hover near record lows today, but experts forecast they'll rise in the coming months. Waiting could prove costly when that happens. Lets connect today to discuss todays rates and determine if now's the time for you to buy.

What To Do with Your Vacation Home as Summer Ends

As summer comes to a close, is it time to think about selling your vacation home? Based on recent data and expert opinions, its something you may want to consider. According to research from the National Association of Realtors (NAR), vacation home sales are up 57.2% year-over-year for January-April 2021.

If you've taken your last vacation this summer, here are reasons you should consider selling your vacation home this year.

1. Remote work continues to drive demand for vacation homes.

As the report from NAR says, based on continuously evolving work needs, there could be more interest in your second home than you think:

In 2020, across all nine divisions, the fraction of the workforce that work from home is typically higher in the vacation home counties than in the non-vacation home counties The opportunity to work from home could further raise the demand for vacation homes in future years.

Recent data shows well likely see a sustained increase in the rate of remote work over the next five years. That means your vacation home could be highly sought after by certain buyers. Lawrence Yun, Chief Economist at NAR, puts it best, saying:

“Vacation homes are a hot commodity at the moment . . . . With many businesses and employers still extending an option to work remotely to workers, vacation housing and second homes will remain a popular choice among buyers.”

2. Selling could allow you to upgrade your vacation spot or even your day-to-day scenery.

When demand is high, so is buyer competition. When competition is strong, buyers will do everything they can to make their offer on your vacation home as appealing as possible. This can include things like all-cash offers and more. If you sell now, you'll be able to benefit from high buyer competition and pick the offer with the best possible terms for you. That offer could give you the opportunity to purchase the primary residence of your dreams.

Or, if you find that you'll continue working from home, you could consider taking up more permanent residence in your vacation home and selling your primary residence instead. While this isn't a choice everyone can consider, it could be a great option.

No matter what the situation, you don't have to make the decision on your own. Your trusted real estate advisor can help you determine your best option when you're ready to sell.

Bottom Line

Buyers remain interested in vacation homes this year for a number of reasons. Now that summer is winding down, its time to think about taking advantage of todays demand for vacation homes. Lets connect today if you're ready to give your second home its day in the sun.

 

What is an Electrostatic Filter?

Air filters serve a wide range of purposes in your home. They remove dust and dander from the air, eliminate other allergens, keep some odors under control, and even reduce the wear and tear that your HVAC system experiences throughout the year. Depending on the filters you use, you may even be able to remove some viruses and bacteria from the air to keep the people in your house healthier. With all of the benefits that good air filters provide, the only real downside is that you have to replace them every few months to keep your home’s filtration system filtering at its best.

There are a few other options available when it comes to filter types, however. One air filter that’s increasingly popular with homeowners is the electrostatic filter, which not only provides excellent filtration but is also cleanable and reusable. If you’re not familiar with electrostatic filters or how they differ from the disposable filters that you’re used to, here’s the basics of what you need to know.

How Electrostatic Filters Work

Traditional air filters work by putting pleated material that’s made of a lot of material fibers in the way of air moving through your system, allowing the air itself to pass through but catching dust and other unwanted material on those fibers. It’s fairly effective, but if there aren’t any fibers in the way of any given particle then the particle will pass through without resistance. Electrostatic filters work differently, actually attracting those particles even if they would otherwise be able to pass through the filter unimpeded.

This attraction is caused by static electricity, which is the same thing that causes socks to stick to your clothes in the dryer and can make balloons stick to the wall if you rub them in your hair. These filters carry a slight static charge, allowing them to attract even microscopic particles that would normally be too small for a filter to stop. Particles passing through the filter become ionized, meaning that they pick up a charge themselves which causes them to have a natural attraction that pulls them toward a collecting layer in the filter. Once the particles are attracted to the filter, they become stuck, just like that proverbial sock or balloon.

Cleaning and Maintenance

One positive of traditional pleated filters is that they become more efficient as they build up more dust and other particles; because the stuff filtered out of the air clogs up holes that small particles could pass through in the filter, it becomes less likely that additional particles will pass through. Unfortunately, this isn’t an advantage that electrostatic filters share. As electrostatic filters attract dirt and other particles out of the air, the available attractive material becomes covered up and they actually become less efficient. The good news is that this can be taken care of simply by cleaning the filter.

Cleaning an electrostatic filter is a pretty straightforward process. After turning off the HVAC system and removing the filter, simply take it outdoors and spray it with a hose in the opposite direction that the air would normally flow. Keep rinsing until the water comes out clean, then allow the filter to air dry. Once it’s dried, simply reinstall the filter and it’s ready to start filtering fine particles out of the air again. Repeat this process once a month or whenever the filter appears dirty.

Should You Upgrade Your Home’s Filtration?

Though electrostatic filters cost more up front, the ability to clean them and the greater efficiency that they show when clean means that you can actually save money on filters in the long run. Making the switch is definitely worth considering, and might be worth discussing with an HVAC professional when you schedule a maintenance check before switching on the heat this winter.

Why 2021 Is Still the Year To Sell Your House

If you're trying to decide whether or not to sell your house, this is the time to think seriously about making a move. Fannie Maes recent Home Purchase Sentiment Index (HPSI) reveals the number of respondents who say its a good time to sell is higher now than it was over the past few summers (see graph below). Today, the majority of consumers, 75 percent, say its a good time to sell a house.

Why is sellers sentiment up year-over-year?

The higher good time to sell sentiment has to do with todays market conditions, specifically low housing supply and high buyer demand. In the simplest terms, we don't have enough houses available for sale to meet buyer demand.

According to the latest data from the National Association of Realtors (NAR), were still firmly in a sellers market because housing supply is well below a balanced norm (shown in the graph below). Clearly, the scales are tipped in a sellers favor today. But while housing supply is undeniably low, the right side of the graph shows how the inventory situation is improving little by little each month as more sellers list their homes for sale.

As a seller, that means each month, buyers have more options to pick from. By extension, that means your house may get less buyer attention with time. Danielle Hale, Chief Economist for realtor.com, explains it like this:

More homeowners continue to list homes for sale compared to a year ago Notably, while new listings continue to lag behind a more normal 2019 pace, the gap is shrinking. Even though homes continue to sell quickly thanks to high demand and limited supply, new listings are subtly shifting the balance of market conditions in favor of buyers.

So, what's that mean for you?

If you've been waiting for the perfect time to sell, there may not be a better chance than right now. Inventory is gradually increasing each month, so selling sooner rather than later will help you maximize your homes potential.

Bottom Line

If you're planning to sell your house, 2021 is still the year to do it. The unique mix of low supply and high demand wont last forever. Lets connect to discuss what you need to do now to sell your house and take advantage of this sellers market.

 

If Housing Affordability Is About the Money, Don't Forget This

There are many non-financial benefits of buying your own home. However, todays headlines seem to be focusing primarily on the financial aspects of homeownership specifically affordability. Many articles are making the claim that its not affordable to buy a home in todays market, but that isn't the case.

Todays buyers are spending approximately 20% of their income on their monthly mortgage payments. According to The Essential Guide to Creating a Homebuying Budget from Freddie Mac, the 20% of income that purchasers are currently paying is well within the 28% guideline suggested:

Most lenders agree that you should spend no more than 28% of your gross monthly income on a mortgage payment (including principal, interest, taxes and insurance).

So why is there so much talk about challenges regarding affordability?

Its Not That Homes Are Unaffordable Its That They're Less Affordable.

Since home prices are rising, its true that homes are less affordable than they have been since the housing crash fifteen years ago. Headlines making these claims aren't incorrect; they just don't tell the whole story. To paint the full picture, you have to look at how today stacks up with historical data. A closer analysis of affordability going further back in time reveals that homes today are more affordable than any time from 1975 to 2005.

Despite that, the chatter about affordability is pushing some buyers to the sidelines. They don't feel comfortable knowing someone else got a better deal a year ago.

However, Are Homes Really Less Affordable if We Consider Equity?

In a recent post, Odeta Kushi, Deputy Chief Economist at First American, offers a different take on the financial components of housing affordability. Kushi proposes we should at least consider the impact equity build-up has on the affordability equation, stating:

For those trying to buy a home, rapid house price appreciation can be intimidating and makes the purchase more expensive. However, once the home is purchased, appreciation helps build equity in the home, and becomes a benefit rather than a cost. When accounting for the appreciation benefit in our rent versus own analysis, it was cheaper to own in every one of the top 50 markets.

Lets look at an example. In the above-mentioned post, Kushi examines the rent versus buy situation in Dallas, Texas. Kushi chose Dallas because home prices there sit near the median of the top 50 markets in the nation.

Kushi first calculates the monthly mortgage payment on a median-priced home with a 5% down payment and a mortgage rate of 3% (see chart below):Kushi then takes the monthly cost and subtracts the appreciation the home had over the previous twelve months. The average house price in Dallas increased 17.5% in the second quarter of 2021 compared to last year (this is in line with the national pace). That equates to an equity benefit of approximately 3,550 each month if the pace remains the same (see chart below):We can see the equity gained each month was greater than the monthly mortgage payment, resulting in a negative cost to own. The buyer could build their net worth by 1,830 each month after paying their mortgage.

Kushi then compares the monthly cost of owning to the cost of renting (see chart below):When adding equity build-up into the equation, the cost of renting is 3,140 more expensive than owning. Again, the First American analysis shows that its less expensive to own in each of the top 50 markets in the country when including the equity component.

Bottom Line

If you're on the fence about whether to buy or rent right now, lets connect so we can determine if the equity increase in our local market should impact your decision.

 

Your Checklist To Get Ready To Sell

Some Highlights

• When it comes to selling your house, you want it to look its best inside and out.
• Its important to focus on tasks that can make it inviting, show its cared for, and boost your curb appeal for prospective buyers.
• Lets connect to make sure your house shows well and catches a buyers eye.

 

A Look at Home Price Appreciation and What It Means for Sellers

When you hear the phrase home price appreciation, what does it mean to you? Through context clues alone, chances are you know it has to do with rising home prices. And as a seller, you know rising home prices are good news for your potential sale. But lets look past the dollar signs and dive deeper into the concept. To truly understand home price appreciation, you need to know how it works and why it matters to you.

Investopedia defines appreciation like this:

Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which is a decrease in value over time.

When we consider this definition and how it applies to real estate, a few words stick out: supply and demand. In todays real estate market, were experiencing high buyer demand and very few sellers listing their homes for sale (see maps below):No matter the industry, anytime there's more demand than supply, prices naturally rise. It happens because buyers are willing to pay more to secure the scarce product or service they're looking for. That's exactly what's happening in todays real estate market. Buyers are competing with one another to purchase a home, leading to bidding wars that drive prices up. For sellers, the rising prices mean that opportunity is knocking.

According to Quicken Loans, the national average home price appreciation rate is between 3-5% in a typical year. Today, home prices are appreciating well beyond the norm thanks to high demand. Here are the latest expert projections on the rate of home price appreciation for this year (see chart below):

Compared to the normal pace of 3-5% appreciation per year, the current average forecast of nearly 11.5% is significant.

For sellers, this means that with the current rise in prices, your house may be worth more than you realize. That price appreciation helps give your equity a boost. Equity is the difference between what you owe on the home and its market value based on factors like price appreciation. It works like this (see chart below):You can use your built-up equity to power a move into your dream home, or you can put it toward life-changing goals like funding an education or opening a business.

But don't wait. While price appreciation is strong now, those same experts say it'll start to appreciate at a more normalized pace next year. If you list your house sooner rather than later, you'll be in a better position to capitalize on the higher-than-average home price appreciation were seeing today.

Bottom Line

If you're thinking of selling your house, there really is no time like the present. Lets connect so you can get an expert market analysis of your home and its potential.