- If you’re questioning whether or not to buy a home this year due to today’s cooling market, consider the long-term financial benefits of homeownership.
- As a homeowner, equity increases your wealth. On average, nationwide, home prices appreciated by 290.2% since 1991.
- Homeownership wins in the long run. If you’re ready to buy a home, let’s connect today.
- If you’re trying to buy your first home in today’s housing market, you’ll want to know what you can do as mortgage rates rise and inventory stays low overall.
- Connect with a lender to get pre-approved, prioritize your wish list, consider condos, and expand your search radius.
- Your first home is out there. Let’s connect to explore your options and what other first-time buyers are doing to find their homes.
As you set out to buy a home, saving for a down payment is likely top of mind. But you may still have questions about the process, including how much to save and where to start.
If that sounds like you, your down payment could be more in reach than you originally thought. Here’s why.
The 20% Down Payment Myth
If you believe you have to put 20% down on a home, you may have based your goal on a common misconception. Freddie Mac explains:
“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”
Unless it’s specified by your loan type or lender, it’s typically not required to put 20% down. According to the latest Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. There are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.
This is good news for you because it means you could be closer to your homebuying dream than you realize. For more information, turn to a trusted lender.
Down Payment Assistance Programs Can Be a Game Changer
A professional will be able to show you other options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from downpaymentresource.com, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.
A recent article explains why programs like these are helpful:
“These resources can immediately build your home buying power and help you take action sooner than you thought possible.”
“It is a common misconception that homebuyer assistance is only available to first-time homebuyers, however, 38% of homebuyer assistance programs in Q1 2022 did not have a first-time homebuyer requirement.”
There are also location and profession-based programs you could qualify for as well.
Saving for your down payment is an important first step on your homebuying journey. Let’s connect today and make sure you have a trusted lender to help explore your options.
While watching the stock market recently may have started to feel pretty challenging, checking the value of your home should come as welcome relief in this volatile time. If you’re a homeowner, your net worth got a big boost over the past few years thanks to rising home prices. And that increase in your wealth came in the form of home equity. Here’s how it works.
Equity is the current value of your home minus what you owe on the loan. Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially. And while rising inventory and mortgage rates have cooled the market some in recent months, home prices nationally remain strong.
That’s why, according to the latest Homeowner Equity Insights from CoreLogic, the average homeowner equity has grown by $60,000 over the last 12 months. While that’s the national number, if you want to know what happened, on average, over the past year in your area, look at the map below from CoreLogic:
Why This Is So Important Right Now
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), helps explain why this matters so much today:
“. . . the decline in the stock market has dented overall net wealth. It has fallen by $6 trillion from the first to the second quarter. Only housing wealth has held on, with homeowners’ real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.”
While equity helps increase your overall net worth, it can also help you achieve other goals like buying your next home. When you sell your current house, the equity you built up comes back to you in the sale, and it may be just what you need to cover a large portion – if not all – of the down payment on your next home.
There’s volatility in today’s stock market, but home equity is still incredibly strong. To find out just how much equity you have in your current home, let’s connect.
If recent headlines about the housing market cooling and buyer demand moderating have you worried you’ve missed your chance to sell, here’s what you need to know. Buyer demand hasn’t disappeared, it’s just eased from the peak intensity we saw over the past two years.
Buyer Demand Then and Now
During the pandemic, mortgage rates hit record lows, and that spurred a significant rise in buyer demand. This year, as rates increased due to factors like rising inflation, buyer demand pulled back or softened as a result. The latest data from ShowingTime confirms this trend (see graph below):
The orange bars in the graph above represent the last few months of data and the clear cooldown in the volume of home showings the market has seen since mortgage rates started to rise. But context is important. To get the full picture of where today’s demand stands, let’s look at the July data for the past six years (see graph below):
This second visual makes it clear that, while moderating compared to the frenzy in 2020 and 2021, showing activity is still beating pre-pandemic levels – and those pre-pandemic years were great years for the housing market. That goes to show there’s still demand if you sell your house today.
What That Means for You When You Sell
The key to selling in a changing market is understanding where the housing market is now. It’s not the same market we had last year or even earlier this year, but that doesn’t mean the opportunity to sell has passed.
While things have cooled a bit, it’s still a sellers’ market. If you work with a trusted local expert to price your house at the current market value, the demand is still there, and it should sell quickly. According to a recent survey from realtor.com, 92% of homeowners who sold in August reported being satisfied with the outcome of their sale.
Buyer demand hasn’t disappeared, it’s just moderated this year. If you’re ready to sell your house today, let’s connect so you have expert insights on how the market has shifted and how to plan accordingly for your sale.