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Homeowners sitting on a pile of cash with $17T in home equity: CoreLogic https://ift.tt/ibRuCL0 Home equity continued to rise in the first quarter of 2024 as residential properties with mortgages collectively gained $1.5 trillion in equity over the past year, according to a CoreLogic report released Friday. The average U.S. homeowner with a mortgage added $28,000 in equity during the year ending in March 2024 — the highest year-over-year increase since late 2022. Three states — California (+$64,000), Massachusetts (+$61,000) and New Jersey (+$59,000) — saw increases that were more than double the national average. The $1.5 trillion gain in U.S. home equity over the past year brought total net equity to more than $17 trillion at the end of Q1 2024. Mortgaged properties account for 62% of all residential homes in the U.S., according to CoreLogic. “With home prices continuing to reach new highs, owners are also seeing their equity approach the historic peaks of 2023, close to a total of $305,000 per owner,” Selma Hepp, chief economist at CoreLogic, said in a statement. “Importantly, higher prices have also lifted some 190,000 homeowners out of negative equity, leaving only about 1.8% of those with mortgages underwater.” Negative equity, also known as an underwater or upside-down mortgage, involves borrowers whose outstanding mortgage debt exceeds the value of their home. On a quarterly basis, negative equity decreased by 2.1% in Q1 2024 and now represents 1 million homes nationwide. The analysis also noted that the level of underwater mortgages at a given time can change quickly due to changes in home prices. For example, when looking at the level of mortgage debt in Q1 2024, there are 111,000 homes that would move back into a positive equity position if home values rose by at least 5%. Conversely, 153,000 homes would fall underwater if values declined by 5% or more. “Home equity is key to mortgage holders who have seen other homeownership costs soar, including insurance, taxes and HOA fees, as a source of financial buffer,” Hepp said. “Also, low amounts of negative equity are welcomed in markets that have shown price weaknesses this spring, such as Florida (1.1% of homes underwater) and Texas (1.7% of homes underwater) — both of which are below the national rate — as further price declines could drive more homeowners to lose their equity.” via HousingWire https://ift.tt/WCXeV8T June 07, 2024 at 11:01AM

Now’s the Time To Upgrade to Your Dream Home If you’ve been wanting to sell your house and move up to a bigger or nicer home, you’re not alone. A recent Inman survey reveals the top motivator for today’s homebuyers is the desire for more space or an upgraded home (see graph below): But there’s also a good chance you, like many other people, have been holding off on that goal because of recent market challenges. It makes sense – when you’re planning an upgrade that could increase your monthly housing costs, affordability has a huge impact on when you make your move. But there’s good news: now’s actually a great time to make that move happen. Here’s why. You Have a Lot of Equity To Leverage One of the key benefits in today’s market is the amount of equity you’ve likely built up in your current house over the years. Even with recent shifts in the housing market, national home prices have steadily grown, adding to the equity homeowners have today. Selma Hepp, Chief Economist at CoreLogic, explains it well: “Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.” What does that mean for you? If you’ve been in your home for a few years, you’re probably sitting on a significant amount of equity. You can put that toward the down payment on your next home, helping keep the amount you borrow within a comfortable range. This can make upgrading more achievable than you might think. If you’re curious how much you’ve built up over the years, ask your real estate agent for a professional equity assessment. Mortgage Rates Have Fallen, Boosting Your Purchasing Power And there’s another big reason why now’s a great time to make your move: mortgage rates are trending down. Lower rates can help make your future monthly payments more manageable, and they also increase your purchasing power. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), points out: “When mortgage rates fall, the interest portion of monthly payments decreases, which lowers the total payment. This makes it easier for more borrowers to . . . qualify for mortgages that may have been unaffordable at higher rates.” That gives you more flexibility when shopping for homes and may allow you to afford a house at a price point that was previously out of reach. A trusted lender can work with you to figure out the best plan for your budget. Bottom Line If you’re ready to sell your current home and find the bigger, nicer home you’ve been dreaming of, don’t wait. Your equity, paired with lower mortgage rates, puts you in a great position to make that move today. To make the best decisions and get the most out of your current market advantage, let’s connect @ 630-881-8655 so you have an expert guide through every step of the homebuying process. #justcallwilliam

Never so Strong/Never so Weak These two conditions are both true. First, the housing market is strong with prices at a record high. While this “high price” condition is true, owning a home has never been so unattainable. The U. of Michigan Survey reports that “Buying Conditions for Homes” is the weakest on record, since the late-1970’s (graph below). Last week, it was reported that Housing Starts declined 5.5% seasonally adjusted to an annualized rate to 1.28M, which equates to a decline of 19.3% year-over-year. The mortgage purchase applications reported by Mortgage Bankers Associate report consistent data as the application rated has declined 11.8% y-o-y, and even more when including refinancings. Bottom line: ZIRP enabled homeowners to attain ultra-low mortgages, thus creating a lock-in effect, that lowers supply, pushes prices higher which reduces the percentage of home buyers that can afford the higher priced homes financed at higher mortgage rates. Home insurance, RE taxes, maintenance has risen in line with inflation costing the homeowner 20% more than pre-COVID which is in addition to the cost of the home and the cost of financing. Affordability has become a greater factor influencing housing market dynamics as it lower ‘D’ sufficiently in the Supply-Demand equation. The good news is that help is on the way. Later this year, the Fed will begin to lower rates, however, they will lower the Fed Funds rate and a 30-year mortgage is priced off the 10-year treasury, so although the front end will come down, what happens to intermediate UST rates is the key to the equation. When looking at U of Michigan Survey, I take comfort knowing this is likely what a trough looks like. It is a healthy condition too that household net worth relative to income is near record high levels. If mortgage rates decline, hosing activity will pick up due to affordability, and while more homes will come on to the market for sale, prices, I do not expect this increased supply to drive home prices lower since there is still a 3M shortage of homes. Home builders will build/deliver, however, they will be disciplined not to over-supply the market and maintain profit margins despite higher cost for land, labor, and materials. Multi-family rentals have also surged and continue to be firm given how more affordable it is to rent than to buy. Data released today from Zillow show nationwide rents have advanced 30.4% since COVID, above the 20.2% rise in incomes over this period. Last week, the Federal Reserve Bank of Kansas City released their economic bulletin on Housing that discusses housing inflation and its impact; this graph from the KC Fed (below) focusses on lack of mobility for a large cohort of homeowners that would face significantly higher housing costs if they were to move, with the knock on effect that this dynamic creates less available supply of housing stock, and as a result higher prices given demand for housing.

If you’ve been wanting to sell your house and move up to a bigger or nicer home, you’re not alone. But there’s also a good chance you, like many other people, have been holding off on that goal because of recent market challenges. It makes sense – when you’re planning an upgrade that could increase your monthly housing costs, affordability has a huge impact on when you make your move. But there’s good news: now’s actually a great time to make that move happen. Here’s why.   You Have a Lot of Equity To Leverage One of the key benefits in today’s market is the amount of equity you’ve likely built up in your current house over the years. Even with recent shifts in the housing market, national home prices have steadily grown, adding to the equity homeowners have today. Selma Hepp, Chief Economist at CoreLogic, explains it well: “Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.”   What does that mean for you? If you’ve been in your home for a few years, you’re probably sitting on a significant amount of equity. You can put that toward the down payment on your next home, helping keep the amount you borrow within a comfortable range. This can make upgrading more achievable than you might think. If you’re curious how much you’ve built up over the years, ask your real estate agent for a professional equity assessment.   Mortgage Rates Have Fallen, Boosting Your Purchasing Power And there’s another big reason why now’s a great time to make your move: mortgage rates are trending down. Lower rates can help make your future monthly payments more manageable, and they also increase your purchasing power. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), points out: “When mortgage rates fall, the interest portion of monthly payments decreases, which lowers the total payment. This makes it easier for more borrowers to . . . qualify for mortgages that may have been unaffordable at higher rates.”   That gives you more flexibility when shopping for homes and may allow you to afford a house at a price point that was previously out of reach. A trusted lender can work with you to figure out the best plan for your budget.   Bottom Line If you’re ready to sell your current home and find the bigger, nicer home you’ve been dreaming of, don’t wait. Your equity, paired with lower mortgage rates, puts you in a great position to make that move today. To make the best decisions and get the most out of your current market advantage, let’s connect so you have an expert guide through every step of the homebuying process. #gosusanclark   

Not only is California the state with the second-highest average rent payment, but it also boasts the highest average monthly mortgage payment, according to a new report from bill pay service doxo. The average monthly mortgage in the West Coast state is $2,576, which is $1,174 above the national average. The average cost of bills in California is 38.7% above the national average, according to a 2023 doxo report. Meanwhile, West Virginia has the lowest average monthly mortgage — the average payment is $961. The doxo report found that 40% of households in the U.S. have to pay a monthly mortgage and that the average monthly payment is $1,402. It was the most expensive common household bill, with Americans spending an average of $885,000,000,000 a year on it.

It is possible mortgage interest rates will remain high until the last quarter of 2024. This perspective is just Dallas alone. Rural areas are still competitive. Expect to see more 40 year mortgages on the horizon. If at all possible, choose a 30 year fix mortgage. If you will have a pension/IRA stay away from a 15 year fix mortgage. The payment is higher and you will lose the write off which you will need when you retire. You always want to have a lower MAGI otherwise your Medicare premium will shock you. If you have an IRA call a professional CFP, ChFC, CFA, CLU, or an RIA to convert to a Roth IRA. Home prices will always adjust based on market dynamics but do not expect home prices to come down anytime soon. The majority of homeowners have purchased their homes with a down payment and qualified with full documentation. Assuming you have sufficient cash, then you can assume someone's lower mortgage interest rate. Veterans, never allow anyone to assume your VA loan. Sell your home and use your VA loan again to purchase another home.

1. Home prices will continue to climb Let’s get this out of the way first: It’s unlikely to get much easier to afford a home in the Seattle area. King County home prices have more than doubled since the 2008 Great Recession. Then COVID supercharged that growth, spiking prices by 20% or more in a single year in some Seattle suburbs. That price growth has slowed since mortgage rates began to climb in 2022, but prices remain high for many first-time buyers struggling to afford a home. That’s due to a limited number of homes for sale and a still-growing population. 2. Mortgage rates to hover around 6% to 6.5% Beyond prices, the big question on potential homebuyers’ minds is mortgage rates. This year, mortgage rates averaged a high of 7.2% in May and settled at 6.6% by mid-December, offering a bit of relief but nothing close to the below 4% levels of the early pandemic years. Economists nearly unanimously expect rates to hover in the 6% range next year. Even with prices and mortgage rates not budging much, economists do expect home sellers and buyers to make more deals. The so-called “lock-in effect” of homeowners staying put to keep their low interest rate “is waning over time,” Hale said during a recent panel hosted by the National Association of Realtors. Here in the Puget Sound region, the final months of the year have seen a burst of home sales compared with a year ago, according to data from the Northwest Multiple Listing Service.  3. Rents to remain high, but slow to rise It may not feel like it to many Seattle renters, but rents across the city are not on a dramatic incline. In fact, overall rents were basically flat this year and are expected to stay level in 2025. 4. Office market woes will continue There is no pre-COVID normalcy in sight for Seattle’s commercial real estate market, especially the city’s many partially empty office towers. The number of people working in downtown offices remains at about 56% of prepandemic levels, according to October foot traffic numbers reported by the Downtown Seattle Association. 5. Debate continues over building new housing To address the region’s sky-high housing costs, nearly everyone agrees the Seattle area needs more new homes. But the debate over just where those homes should go is likely to continue in 2025 — and far beyond. In Seattle, the new year will bring into focus a conversation about where the city plans to focus new housing development. The Seattle City Council is set to take up Seattle’s next comprehensive plan, a 20-year planning document that contemplates upzones to allow more density in many areas of the city. 

Home affordability hasn't improved as much as anticipated so far this year — a huge letdown for buyers hoping to secure a place of their own. Buying a home was a historic challenge last year because of sky-high listing values and the highest mortgage rates since the turn of the century. In fact, the third quarter of 2023 was the least affordable market in nearly 40 years, according to the National Association of Realtors. Heading into 2024, the consensus among real-estate mavens is that affordability will get substantially better, largely due to declining mortgage rates. Lower inflation would allow the Federal Reserve to cut interest rates at least a half-dozen times throughout the year, the thinking went, which would bring down homebuyers' borrowing costs as well. Instead, an unexpectedly strong economy has helped keep inflation afloat, making rate cuts less likely. In turn, mortgage rates are now headed in the wrong direction, steadily rising from 6.6% late last year to nearly 6.9% as of mid-April. All else equal, higher borrowing costs should translate to lower property prices because of lower demand from buyers. However, the long-standing housing supply shortage has kept prices from falling, forcing buyers in most markets to either pay up and refinance later or hold out for a better deal. Neither option is ideal, as those who continue to rent are giving landlords even more leverage. Home prices rose from the prior year in 87 of the 104 largest US real-estate markets in February, according to data from real-estate site Point2 shared with Business Insider in mid-April. Only a dozen real-estate markets fitting that description saw property prices fall by more than 1%. Even more startling for buyers is that prices rose by at least 10% in 27 markets, led by Jersey City, New Jersey's 26.5% gain. The firm's researchers noted that property values in the New York-adjacent city have doubled in less than seven years — the ninth-fastest rate in the nation. Significant price gains were noticeable from the Northeast to the Southwest and every region in between, though the most expensive markets were almost exclusively in the West. Thirteen of the 14 priciest markets were west of the Rocky Mountains, and seven of the eight costliest cities were in California. Unsurprisingly, Manhattan, New York, was the exception. Below are the 27 US real-estate markets where property prices have risen by at least 10% in the last year, according to Point2 data, along with each market's year-over-year price growth and price difference, as well as the median home prices for February 2024 and 2023.

Consumers think mortgage rates will improve, but they’re still pessimistic about buying https://ift.tt/EMeBxY8 Consumers are optimistic that mortgage rates and home prices will decline, but most are still pessimistic about buying homes. Fannie Mae’s home purchase sentiment index (HPSI) — which tracks the housing market and consumer confidence to sell or buy a home — rose 0.6 points to 72 in August. The full index is up 5.2 points year over year. In August, a survey-high 39% of consumers said they expect mortgage rates to decline in the next 12 months, up from 29% in July. And about 25% of consumers indicated they expect home prices to decrease over the next 12 months, up from 21% in July.  Despite the improved affordability outlook, consumer perception of homebuying conditions remained unchanged. A total of 17% of survey respondents said it’s a good time to buy.  “On a national level, housing sentiment was largely unchanged in August despite some positive developments for affordability, including a meaningful decline in actual mortgage rates and an uptick in home listings in certain markets, particularly in the Sunbelt,” Mark Palim, Fannie Mae’s vice president and deputy chief economist, said in a statement. Palim noted that 56% of survey respondents from the South indicated that it’s a “good time to sell,“ a decrease of 5 percentage points from July. This represented a strong divergence from the sense of home selling conditions in the Northeast (80%), Midwest (70%) and West (66%), where readings moved higher in August.  “This likely reflects in part the wide geographic variation in new home construction activity,” Palim said. “In the regions that had a stronger construction response following the pandemic, our latest survey data suggest that sellers may be losing some of their negotiating power due to the increased supply.“ On a national level, both single-family and multifamily housing starts were down in July from a year ago.  Single-family starts were down 14.1% from June and down 14.8% year over year to a seasonally adjusted annual rate of 851,000 units, according to data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD). Multifamily starts came in at a rate of 363,000, up 11.7% from June, but down 21.8% year over year. via HousingWire https://ift.tt/dx6egX8 September 09, 2024 at 08:11AM

If you’ve been wanting to sell your house and move up to a bigger or nicer home, you’re not alone. A recent Inman survey reveals the top motivator for today’s homebuyers is the desire for more space or an upgraded home (see graph below): But there’s also a good chance you, like many other people, have been holding off on that goal because of recent market challenges. It makes sense – when you’re planning an upgrade that could increase your monthly housing costs, affordability has a huge impact on when you make your move. But there’s good news: now’s actually a great time to make that move happen. Here’s why. You Have a Lot of Equity To Leverage One of the key benefits in today’s market is the amount of equity you’ve likely built up in your current house over the years. Even with recent shifts in the housing market, national home prices have steadily grown, adding to the equity homeowners have today. Selma Hepp, Chief Economist at CoreLogic, explains it well: “Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.” What does that mean for you? If you’ve been in your home for a few years, you’re probably sitting on a significant amount of equity. You can put that toward the down payment on your next home, helping keep the amount you borrow within a comfortable range. This can make upgrading more achievable than you might think. If you’re curious how much you’ve built up over the years, ask your real estate agent for a professional equity assessment. Mortgage Rates Have Fallen, Boosting Your Purchasing Power And there’s another big reason why now’s a great time to make your move: mortgage rates are trending down. Lower rates can help make your future monthly payments more manageable, and they also increase your purchasing power. As Nadia Evangelou, Senior Economist and Director of Real Estate Research at the National Association of Realtors (NAR), points out: “When mortgage rates fall, the interest portion of monthly payments decreases, which lowers the total payment. This makes it easier for more borrowers to . . . qualify for mortgages that may have been unaffordable at higher rates.” That gives you more flexibility when shopping for homes and may allow you to afford a house at a price point that was previously out of reach. A trusted lender can work with you to figure out the best plan for your budget. If you’re ready to sell your current home and find the bigger, nicer home you’ve been dreaming of, don’t wait. Your equity, paired with lower mortgage rates, puts you in a great position to make that move today. To make the best decisions and get the most out of your current market advantage, let’s connect so you have an expert guide through every step of the homebuying process.