DFW Makes TOP 10 Hidden Real Estate Gems
DFW Makes TOP 10 Hidden Real Estate Gems = That means these metro areas are likely to experience stronger price increases compared with other markets in 2022.
Article provided by: Swapna Venugopal Ramaswamy, USA TODAY | Yahoo.com
Go south, young people. Or at least invest in the Southern states.
Most of the top 10 affordable real estate markets that underperformed but have strong underlying fundamentals are in the South, according to a report by the National Association of Realtors (NAR). That means these metro areas are likely to experience stronger price increases compared with other markets in 2022.
NAR examined factors such as wage and job growth; percentage of people 25 to 44; and net domestic migration to create the list. Another metric was affordability of homes compared with the median income of the area.
DFW Makes TOP 10 Hidden Real Estate Gems
DFW Makes TOP 10 Hidden Real Estate Gems = That means these metro areas are likely to experience stronger price increases compared with other markets in 2022.
Article provided by: Swapna Venugopal Ramaswamy, USA TODAY | Yahoo.com
Go south, young people. Or at least invest in the Southern states.
Most of the top 10 affordable real estate markets that underperformed but have strong underlying fundamentals are in the South, according to a report by the National Association of Realtors (NAR). That means these metro areas are likely to experience stronger price increases compared with other markets in 2022.
NAR examined factors such as wage and job growth; percentage of people 25 to 44; and net domestic migration to create the list. Another metric was affordability of homes compared with the median income of the area.
DFW Makes TOP 10 Hidden Real Estate Gems
DFW Makes TOP 10 Hidden Real Estate Gems = That means these metro areas are likely to experience stronger price increases compared with other markets in 2022.
Article provided by: Swapna Venugopal Ramaswamy, USA TODAY | Yahoo.com
Go south, young people. Or at least invest in the Southern states.
Most of the top 10 affordable real estate markets that underperformed but have strong underlying fundamentals are in the South, according to a report by the National Association of Realtors (NAR). That means these metro areas are likely to experience stronger price increases compared with other markets in 2022.
NAR examined factors such as wage and job growth; percentage of people 25 to 44; and net domestic migration to create the list. Another metric was affordability of homes compared with the median income of the area.
Why Waiting to Buy a Home Could Cost You a Small Fortune
Why Waiting to Buy a Home Could Cost You a Small Fortune
Many people are sitting on the fence trying to decide if now’s the time to buy a home. Some are renters who have a strong desire to become homeowners but are unsure if buying right now makes sense. Others may be homeowners who are realizing that their current home no longer fits their changing needs.
To determine if they should buy now or wait another year, they both need to ask two simple questions:
- Do I think home values will be higher a year from now?
- Do I think mortgage rates will be higher a year from now?
Let’s shed some light on the answers to these questions.
Where will home prices be a year from now?
If you average the most recent projections from the major industry forecasters, the expectation is home prices will increase by 7.7%. Let’s take a house that’s valued today at $325,000 as an example.
If the buyer makes a 10% down payment ($32,500), they’ll end up borrowing $292,500 for their mortgage. Applying the projected rate of home price appreciation, that same house will cost $350,025 next year. With a 10% down payment ($35,003), they’d then have to borrow $315,022.
Therefore, as a result of rising home prices alone, a prospective buyer will have to put down an additional $2,503 and borrow an additional $22,523 just for waiting a year to make their move.
Where will mortgage rates be a year from now?
Today, mortgage rates are hovering around 3%. However, most experts believe they’ll rise as the economy continues to recover. Any increase in the mortgage rate will also increase a purchaser’s cost. Here are the forecasts for the first quarter of 2022 from four major entities:
- Freddie Mac – 3.5%
- Fannie Mae – 3.5%
- National Association of Realtors – 3.5%
- Mortgage Bankers Association – 3.9%
The projections average out to 3.6% among these four forecasts, a jump up from where they are today.
What does it mean to you if home values and mortgage rates increase?
A buyer will pay a lot more in mortgage payments each month if both of these variables increase. Assuming a buyer purchases a $325,000 home this year with a 30-year fixed-rate loan at 3% after making a 10% down payment, their monthly principal and interest payment would be $1,233.
That same home one year from now could be $350,025, and the mortgage rate could be 3.6% (based on the industry forecasts mentioned above). That monthly principal and interest payment, after putting down 10%, totals $1,432.
The difference in the monthly mortgage payment would be $199. That’s $2,388 more per year and $71,640 over the life of the loan.
Add to that the approximately $25,000 a house with a similar value would build in home equity this year as a result of home price appreciation, and the total net worth increase a purchaser could gain by buying this year is nearly $100,000. That’s a small fortune.
Bottom Line
When asking if they should buy a home, many potential buyers think of the nonfinancial benefits of owning a home. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.
Impact of the Coronavirus on the U.S. Housing Market
Impact of the Coronavirus on the U.S. Housing Market
The Coronavirus (COVID-19) has caused massive global uncertainty, including a U.S. stock market correction no one could have seen coming. While much of the news has been about the effect on various markets, let’s also acknowledge the true impact it continues to have on lives and families around the world.
With all this uncertainty, how do you make powerful and confident decisions in regard to your real estate plans?
The National Association of Realtors (NAR) anticipates:
“At the very least, the coronavirus could cause some people to put home sales on hold."
While this is an understandable approach, it is important to balance that with how it may end up costing you in the long run. If you’re considering buying or selling a home, it is key to educate yourself so that you can take thoughtful and intentional next steps for your future.
For example, when there’s fear in the world, we see lower mortgage interest rates as investors flee stocks for the safety of U.S. bonds. This connection should be considered when making real estate decisions.
According to the National Association of Home Builders (NAHB):
“The Fed’s action was expected but perhaps not to this degree and timing. And the policy change was consistent with recent declines for interest rates in the bond market. These declines should push mortgage interest rates closer to a low 3% average for the 30-year fixed rate mortgage.”
This is exactly what we’re experiencing right now as mortgage interest rates hover at the lowest levels in the history of the housing market.
Bottom Line
The full impact of the Coronavirus is still not yet known. It is in times like these that working with an informed and educated real estate professional can make all the difference in the world.
Opportunity in the Luxury Market This Year
Opportunity in the Luxury Market This Year
Homes priced in the top 25% of a price range for a particular area of the country are considered “premium homes.” At the start of last year, many of the more expensive homes listed for sale hadn’t seen as much interest, since much of the demand for housing over the past few years has come from first-time buyers looking for starter homes. It looks like buyer activity, however, is starting to show a shift in this segment.
According to the January Luxury Report from the Institute for Luxury Home Marketing (ILHM):
“In a snapshot of 2019, despite pessimism at the start of the year, the last quarter showcased a strengthening, with an upswing in the luxury market for sales in both the single family and condo markets.”
Momentum is growing, and those looking to enter the luxury market are poised for success in 2020 as well. With more inventory available at the upper-end, historically low interest rates, and increasing average wages, the stage is set for buyers with an interest in this tier to embrace the perfect move-up opportunity.
The report highlights the increase in buyer activity in this segment, resulting in growing sales toward the end of 2019:
“According to reports from many luxury real estate professionals, the significant increase in number of properties bought at the end of 2019 versus 2018 is reflective of an early 2019 holding pattern.
Many of early 2019’s prospective luxury buyers held off while waiting to see how prices would react to new tax regulations and other policy changes. Buyer confidence returned in late spring and compared to 2018, above average sales were reported in the final quarter of 2019.”
With evidence of strong buyer confidence, this is great news, as more homeowners are building equity and growing their net worth throughout the country:
“Many homeowners are now diversifying their wealth, owning several properties rather than a single mega mansion. In addition, there have been an increase number of home purchases taking place in smaller cities, reflecting the rising number of people relocating from major metropolises. Their property equity wealth or ability to pay high rental costs have afforded them the opportunity to purchase luxury properties in…secondary cities throughout North America.”
With a strong economy and a backdrop set for moving up this year, it’s a great time to explore the luxury market. Keep in mind, luxury can mean different things to different people, too. To one person, luxury is a secluded home with plenty of property and privacy. To another, it is a penthouse at the center of a bustling city. Knowing what characteristics mean luxury to you will help your agent understand what you’re after as you define the scope and location for the home of your dreams.
Bottom Line
If you’re thinking about upgrading your current house to a luxury home, or adding an additional property to your portfolio, let’s get together to determine if you’re ready to make your move.
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