Real Estate Information Archive

Why Home Equity Is a Bright Spark in the Housing Market

Wednesday, May 6, 2020

by Christie Cannon

Why Home Equity Is a Bright Spark in the Housing Market

Why Home Equity is a Bright Spark in the Housing Market | MyKCM

Given how we have seen more unemployment claims than ever before over the past several weeks, fear is spreading widely. Some good news, however, shows that more than 4 million initial unemployment filers have likely already found a new job, especially as industries such as health care, food and grocery stores, retail, delivery, and more increase their employment opportunities. Breaking down what unemployment means for homeownership, and understanding the significant equity Americans hold today, are important parts of seeing the picture clearly when sorting through this uncertainty.

One of the biggest questions right now is whether this historic unemployment rate will initiate a new surge of foreclosures in the market. It’s a very real fear. Despite the staggering number of claims, there are actually many reasons why we won’t see a significant number of foreclosures like we did during the housing crash twelve years ago. The amount of equity homeowners have today is a leading differentiator in the current market.

Today, according to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity. That number is drastically different than it was in 2008 when the housing bubble burst. The last recession was painful, and when prices dipped, many found themselves owing more on their mortgage than what their homes were worth. Homeowners simply walked away at that point. Now, 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear. Those homes are not at risk for foreclosure (see graph below):In addition, CoreLogic notes the average equity mortgaged homes have today is $177,000. That’s a significant amount that homeowners won’t be stepping away from, even in today’s economy (see chart below):In essence, the amount of equity homeowners have today positions them to be in a much better place than they were in 2008.

Bottom Line

The fear and uncertainty we feel right now are very real, and this is not going to be easy. We can, however, see strength in our current market through homeowner equity that has not been there in the past. That may be a bright spark to help us make it through.

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U.S. Homeownership Rate Rises to Highest Point in 8 Years

Monday, May 4, 2020

by Christie Cannon

U.S. Homeownership Rate Rises to Highest Point in 8 Years

For nearly two months, most of us have been following strict stay-at-home orders from our state and local governments. It is a whole new way of life that has put our daily lives on pause. On the other hand, many of us have also found a sense of comfort by slowing down and spending time at home, highlighting the feeling of security that comes with having a much-needed safe place for our families to live.

The latest results of the Housing Vacancy Survey (HVS) provided by the U.S. Census Bureau shows how Americans place immense value in homeownership, and it is continuing to grow in the United States. The results indicate that the homeownership rate increased to 65.3% for the first quarter of 2020, a number that has been rising since 2016 and is the highest we’ve seen in eight years (see graph below):Why is the rate increasing? The National Association of Home Builders (NAHB) explained:

“Strong owner household formation with around 2.7 million homeowners added in the first quarter has driven up the homeownership rate, especially under the decreasing mortgage interest rates and strong new home sales and existing home sales in the first two months before the COVID-19 pandemic hit the economy.”

The NAHB also emphasizes the year-over-year increase in each generational group:

“The homeownership rates among all age groups increased in the first quarter 2020. Households under 35, mostly first-time homebuyers, registered the largest gains, with the homeownership rate up 1.9 percentage points from a year ago. Households ages 35-44 experienced a 1.2 percentage points gain, followed by the 55-64 age group (a 0.9 percentage point increase), the 45-54 age group (a 0.8 percentage point gain), and the 65+ group age (up by 0.2 percentage point).” (See chart below):

Homeownership is an important part of the American dream, especially in moments like this when many are feeling incredibly grateful for the home they have to shelter in place with their families. COVID-19 may be slowing our lives down, but it is showing us the emotional value of homeownership too.

Bottom Line

If you’re considering buying a home this year, let’s connect to set a plan that will help you get one step closer to achieving your dream.

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Housing Could Be A Leader In The Post-Pandemic Economy

Friday, May 1, 2020

by Christie Cannon

Housing could be a leader in the post-pandemic economy

By Steve Brown | Real Estate Editor

Heading into the pandemic, North Texas’ housing market was seeing record sales and rising prices.

And when the worst of the COVID-19 economic downturn is past, the home market could be one of the best parts of the Dallas-Fort Worth and statewide economy, a top real estate economist predicts.

"Housing could be well be the leader in bringing the rest of the economy up out of the doldrums," Dr. James Gaines, chief economist at the Real Estate Center at Texas A&M University said. "We are going to have historically low interest rates that could boost the market.

"Housing could well be one of the leading industry sectors that gets us out," he said. "Home construction will come back - I think it will be prime recovery activity."

Gaines on a conference call told members of the MetroTex Association of Realtors that the outlook for this year’s housing market was strong before the virus shut things down.

"We expected 2020 to be a good year but now all bets are off," he said. "March is probably going to be the last good month for housing for a while. April and May are probably going to be way down."

Home buying while significantly reduced hasn’t completely stopped, he said.

"There is going to be activity – it’s not going to go away altogether," Gaines said.

Gaines said with many homebuyers and sellers sitting out the pandemic, purchase activity could bounce back later this year.

"There is going to be some pent up demand," he said. "Typically, we would be right in the middle of the busy buying season here in April, May and June.

"It may be July, August and September will be our best months of the year," Gaines said.

Before the pandemic, there was already a shortage of housing in D-FW and other markets.

With fewer homes coming on the market, the lack of homes to buy is likely to get worse.

Of course, a rebound in home purchases is also dependent on if the millions of people who’ve been laid off and furloughed go back to work later this year.

Mortgage lenders have been raising their credit requirements because of concerns about the economy.

"The lenders are getting nervous," Gaines said. "They are making the loans tougher – a little tighter."

While almost 4 million Americans have sought forbearance from mortgage payments because of the pandemic, it’s still too early to tell how many of them could eventually lose their homes because of lost wages.

"Are we going to wind up with another wave of distressed properties?" Gaines said. "It’s all a function of the degree and speed people are rehired."

Article Provided by: Steve Brown with Dallas Morning News

Visit Cannonteamhomes.com for more!

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Spring Home Buying Recovering From Coronavirus

Wednesday, April 29, 2020

by Christie Cannon

"We estimate that there are currently 29 states that have a housing deficit, and when we consider only these states, the housing shortage grows from 2.5 million units to 3.3 million units"

Texas currently is experiencing a 4.81% deficit in housing supply

- from the Freddie Mac Report - The Housing Supply Shortage: State of the States

Contact one of our expert agents today if you are looking to buy or sell and want to know your options during the Coronavirus. Our team is always here to help and educate!

972-215-7747 | cannonteamhomes.com

The novel coronavirus was unable to dampen the interest of homebuyers in the past week.

Even as people follow stay-at-home guidelines, the number of people filing home purchase applications rose 12 percent on a seasonally adjusted basis, according to the Mortgage Bankers Association.

That's the strongest level in almost a month.

"The ten largest states had increases in purchase activity, which is potentially a sign of the start of an upturn in the pandemic-delayed spring homebuying season, as coronavirus lockdown restrictions slowly ease in various markets,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “California and Washington continued to show increases in purchase activity, with New York seeing a significant gain after declines in five of the last six weeks.”

Helping to boost purchase interest was a decline in mortgage rates to 3.43 percent for a 30-year mortgage, a record low in MBA's survey.

"Refinance activity declined 7 percent, as rates for refinances likely remained higher than those for purchase loans, " said Kan. "Lenders are still working through pipelines at capacity, and observed changes in credit availability for refinance loans have also in turn impacted rates.”

Overall demand for mortgage applications fell 3.3 percent from the prior week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications and has been conducted weekly since 1990.

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The Pain of Unemployment: It Will Be Deep, But Not for Long

Monday, April 20, 2020

by Christie Cannon

The Pain of Unemployment: It Will Be Deep, But Not for Long

There are two crises in this country right now: a health crisis that has forced everyone into their homes and a financial crisis caused by our inability to move around as we normally would. Over 20 million people in the U.S. became instantly unemployed when it was determined that the only way to defeat this horrific virus was to shut down businesses across the nation. One second a person was gainfully employed, a switch was turned, and then the room went dark on their livelihood.

The financial pain so many families are facing right now is deep.

How deep will the pain cut?

Major institutions are forecasting unemployment rates last seen during the Great Depression. Here are a few projections:

Goldman Sachs - 15%
Merrill Lynch - 10.6%
JP Morgan - 8.5%
Wells Fargo - 7.3%

How long will the pain last?

As horrific as those numbers are, there is some good news. The pain will be deep, but it won’t last as long as it did after previous crises. Taking the direst projection from Goldman Sachs, we can see that 15% unemployment quickly drops to 6-8% as we head into next year, continues to drop, and then returns to about 4% in 2023.

When we compare that to the length of time it took to get back to work during both the Great Recession (9 years long) and the Great Depression (12 years long), we can see how the current timetable is much more favorable.

Bottom Line

It’s devastating to think about how the financial heartache families are going through right now is adding to the uncertainty surrounding their health as well. Hopefully, we will soon have the virus contained and then we will, slowly and safely, return to work.

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How Technology is Helping Buyers Navigate the Home Search Process

Friday, April 17, 2020

by Christie Cannon

How Technology is Helping Buyers Navigate the Home Search Process

How Technology is Helping Buyers Navigate the Home Search Process [INFOGRAPHIC] | MyKCM

Some Highlights:

A recent realtor.com survey revealed that buyers are still considering moving forward with the homebuying process, even if they can’t see the home in-person.
While they still prefer to physically see a home, virtual home tours and accurate listing information top the list of tech specs buyers find most helpful in today’s process.
Let’s connect today to determine how technology can help power your home search.

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Meet Cami Branson - Listing Specialist

Monday, April 6, 2020

by Christie Cannon

Every Monday, meet one of our amazing Team Members! Today we welcome you to meet Cami Branson, a listing specialist with our Team!

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The Housing Market Is Positioned to Help the Economy Recover

Friday, April 3, 2020

by Christie Cannon

The Housing Market Is Positioned to Help the Economy Recover

The Housing Market Is Positioned to Help the Economy Recover [INFOGRAPHIC] | MyKCM

Some Highlights

Expert insights are painting a bright future for housing when the economy bounces back – and it will.
We may be facing challenging economic times today, but the housing market is poised to help the economy recover, not drag it down.
Let’s connect to make sure you’re informed and ready when it’s time to make your move.

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The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

Thursday, April 2, 2020

by Christie Cannon

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

The last few weeks and months have caused a major health crisis throughout the world, leading to a pause in the U.S. economy as businesses and consumers work to slow the spread of the coronavirus. The rapid spread of the virus has been compared to prior pandemics and outbreaks not seen in many years. It also has consumers remembering the economic slowdown of 2008 that was caused by a housing crash. This economic slowdown, however, is very different from 2008.

One thing the experts are saying is that while we’ll see a swift decline in economic activity in the second quarter, we’ll begin a sharp rebound in the second half of this year. According to John Burns Consulting:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far.”

Given this situation, if you’re thinking about buying a home this year, the best thing you can do right now is use this time to get pre-approved for a mortgage, which you can do from the comfort of your home. Pre-approval will help you better understand how much you can afford so that you can confidently do the following two things when you’re ready to buy:

1. Gain a Competitive Advantage

Today’s low inventory, like we’ve seen recently and will continue to see, means homebuyers need every advantage they can get to make a strong offer and close the deal. Being pre-approved shows the sellers you’re serious about buying a home, which is always a plus in your corner.

2. Accelerate the Homebuying Process

Pre-approval can also speed-up the homebuying process so you can move faster when you’re ready to make an offer. Being ready to put your best foot forward when the time comes may be the leg-up you need to cross the finish line first and land the home of your dreams.

Bottom Line

Pre-approval is the best thing you can do right now to be in a stronger position to buy a home when you’re ready. Let’s connect today to get the process started.

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Is Now a Good Time to Refinance My Home?

Tuesday, March 31, 2020

by Christie Cannon

Is Now a Good Time to Refinance My Home?

With interest rates hitting all-time lows over the past few weeks, many homeowners are opting to refinance. To decide if refinancing your home is the best option for you and your family, start by asking yourself these questions:

Why do you want to refinance?

There are many reasons to refinance, but here are three of the most common ones:

1. Lower Your Interest Rate and Payment: This is the most popular reason. Is your current interest rate higher than what’s available today? If so, it might be worth seeing if you can take advantage of the current lower rates.

2. Shorten the Term of Your Loan: If you have a 30-year loan, it may be advantageous to change it to a 15 or 20-year loan to pay off your mortgage sooner rather than later.

3. Cash-Out Refinance: You might have enough equity to cash out and invest in something else, like your children’s education, a business venture, an investment property, or simply to increase your cash reserve.

Once you know why you might want to refinance, ask yourself the next question:

How much is it going to cost?

There are fees and closing costs involved in refinancing, and The Lenders Network explains:

“As an example, let’s say your mortgage has a balance of $200,000. If you were to refinance that loan into a new loan, total closing costs would run between 2%-4% of the loan amount. You can expect to pay between $4,000 to $8,000 to refinance this loan.”

They also explain that there are options for no-cost refinance loans, but be on the lookout:

“A no-cost refinance loan is when the lender pays the closing costs for the borrower. However, you should be aware that the lender makes up this money from other aspects of the mortgage. Usually charging a slightly higher interest rate so they can make the money back.”

Keep in mind that, given the current market conditions and how favorable they are for refinancing, it can take a little longer to execute the process today. This is because many other homeowners are going this route as well. As Todd Teta, Chief Officer at ATTOM Data Solutions notes about recent mortgage activity:

“Refinancing largely drove the trend, with more than twice as many homeowners trading in higher-interest mortgages for cheaper ones than in the same period of 2018.”

Clearly, refinancing has been on the rise lately. If you’re comfortable with the up-front cost and a potential waiting period due to the high volume of requests, then ask yourself one more question:

Is it worth it?

To answer this one, do the math. Will it help you save money? How much longer do you need to own your home to break even? Will your current home meet your needs down the road? If you plan to stay for a few years, then maybe refinancing is your best move.

If, however, your current home doesn’t fulfill your needs for the next few years, you might want to consider using your equity for a down payment on a new home instead. You’ll still get a lower interest rate than the one you have on your current house, and with the equity you’ve already built, you can finally purchase the home you’ve been waiting for.

Bottom Line

Today, more than ever, it’s important to start working with a trusted real estate advisor. Whether you connect by phone or video chat, a real estate professional can help you understand how to safely navigate the housing market so that you can prioritize the health of your family without having to bring your plans to a standstill. Whether you’re looking to refinance, buy, or sell, a trusted advisor knows the best protocol as well as the optimal resources and lenders to help you through the process in this fast-paced world that’s changing every day.

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Blog

Why Home Equity Is a Bright Spark in the Housing Market

Bottom Line

U.S. Homeownership Rate Rises to Highest Point in 8 Years

Bottom Line

The Pain of Unemployment: It Will Be Deep, But Not for Long

How deep will the pain cut?

How long will the pain last?

Bottom Line

How Technology is Helping Buyers Navigate the Home Search Process

Some Highlights:

The Housing Market Is Positioned to Help the Economy Recover

Some Highlights

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

1. Gain a Competitive Advantage

2. Accelerate the Homebuying Process

Bottom Line

Is Now a Good Time to Refinance My Home?

Why do you want to refinance?

How much is it going to cost?

Is it worth it?

Bottom Line

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