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      Don't Wait for a Lower Mortgage Rate – It Could Cost You

      Dont Wait for a Lower Mortgage Rate It Could Cost You | MyKCM
       

      Today’s housing market is truly one for the record books. Over the past year, we’ve seen the lowest mortgage rates in history. And while those rates seemed to bottom out in January of this year, the golden window of opportunity for buyers isn’t over just yet. If you’re one of the buyers who worry they’ve missed out, rest assured today’s mortgage rates are still worth taking advantage of.

      Even today, our mortgage rates are below what they’ve been in recent decades. So, while you may not be able to lock in the rate your friend got recently, you’re still in a great position to secure a rate well below what your parents and even grandparents got in years past. The key will be acting sooner rather than later.

      In late September, mortgage rates ticked above 3% for the first time in months. And according to experts throughout the industry, mortgage rates are projected to continue rising in the months ahead. Here’s where experts say rates are headed:

      Dont Wait for a Lower Mortgage Rate It Could Cost You | MyKCM

      While a projected half percentage point increase may not seem substantial, it does have an impact when you’re buying a home. When rates rise even slightly, it affects how much you’ll pay month-to-month on your home loan. The chart below shows how it works:

      Dont Wait for a Lower Mortgage Rate It Could Cost You | MyKCM

      In this example, if rates rise to 3.55%, you’ll pay an extra $100 each month on your monthly mortgage payment if you purchase a home around this time next year. That extra money can really add up over the life of a 15 or 30-year loan.

      Clearly, today’s mortgage rates are worth taking advantage of before they climb further. The rates we’re seeing right now give you a unique opportunity to afford more home for your money while keeping your monthly payment down.

      Bottom Line

      Waiting for a lower mortgage rate could cost you. Experts project rates will continue to rise in the months ahead. Let’s connect so you can seize this opportunity before they increase further.

      As Home Equity Rises, So Does Your Wealth

      As Home Equity Rises, So Does Your Wealth | MyKCM
       

      Homeownership is still a crucial part of the American dream. For those people who own a home (and those looking to buy one), it’s clear that being a homeowner has considerable benefits both emotionally and financially. In addition to long-term stability, buying a home is one of the best ways to increase your net worth. This boost to your wealth comes in the form of equity.

      Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

      The best thing about equity is that it often grows without you even realizing it, especially in a sellers’ market like we’re in now. In today’s real estate market, the combination of low housing supply and high buyer demand is driving home values up. This is giving homeowners a significant equity boost.

      According to the latest data from CoreLogic, the amount of equity homeowners have has continued to grow as home values appreciate. Here are some key takeaways from the Homeowner Equity Insights Report:

      • The average homeowner gained $51,500 in equity over the past year
      • There was a 29.3% increase in national homeowner equity year over year

      To give you an idea of what that looks like in your area, the map below shows the average equity gains by state.As Home Equity Rises, So Does Your Wealth | MyKCM

      What does all of that mean for you?

      If you’re already a homeowner, you likely have more equity in your house than you realize. The numbers in the map above reflect year-over-year growth. If you’ve been in your home for longer than a year, you’ll likely have even more equity than that. That equity can take you places. You can use the equity you’ve gained to fuel your next move, achieve other life goals, and more.

      On the other hand, if you haven’t purchased a home yet, understanding equity can help you realize why homeownership is a worthwhile goal. Homeowners across the nation gained an average of over $50,000 in equity this year. Don’t miss out on this chance to grow your net worth.

      Bottom Line

      If you want to learn more, let's connect. A trusted advisor can help you understand where home prices are today, how they contribute to a homeowner’s net worth, and the impact equity can have when you own a home.

      Early October is the Sweet Spot for Buyers

      Early October is the Sweet Spot for Buyers | MyKCM
       

      Are you looking to buy a home? If so, we’ve got good news for you.

      While there’s no denying the housing market is having a great year, many of the headlines are focused on the perks for sellers. But what about buyers today? As a buyer, you’re likely braving bidding wars and weighing low mortgage rates versus price appreciation as you search for your dream home. If you find yourself a bit discouraged, hear this: there are clear signs buyers may have more opportunities this fall.

      According to realtor.comthe sweet spot for buyers is just around the corner. In a recent study, experts analyzed housing market trends by looking at data from the past several years. When applied to the current market, experts determined the ideal week to buy a home this year. The research says:

      Nationally, the best time to buy in 2021 is the week of October 3-9. This week historically has shown the best balance of market conditions that favor buyers.”

      So, what’s that mean for you? If you’re looking to buy a home, there’s a golden window of opportunity coming. Here’s what you can expect from that week.

      Increased Housing Supply

      The number of homes available for sale should increase. According to realtor.com, you can expect to see more new listings come to market the week of October 3. The findings estimate we’ll see roughly 17.6% more homes available than we saw at the start of the year.

      This means you’ll have more options to choose from which should be a welcome relief in a market with tight housing supply.

      Fewer Bidding Wars

      With more homes available, you should also see a slight decline in the number of bidding wars. Having more options means buyers may not be competing as intensely for the homes on the market because there are more choices to go around.

      This means when you write an offer, you may have less competition and a better chance of being the top bid. Just remember, it’s still important to come in with a strong offer.

      Adjusted Homes Prices

      As we move into the end of the year, the findings from realtor.com note this week may also be one of the peak weeks for price reductions in 2021. Historically the data shows an average of 7.0% of homes have a price reduction that week. Why? When housing supply ticks up, sellers need to look for other ways to make their house stand out.

      This means, while home prices are still appreciating overall, you may see some homes with price adjustments from eager sellers. The process of closing a house takes time. To close before end of year, sellers may be more motivated this October.

      Bottom Line

      If you’re in the market for a home, don’t lose steam now. Data shows early October may give you the long-awaited opportunity to find the home of your dreams. Let’s connect so you have a trusted ally and advisor to help keep you motivated so you can find the perfect home for you.

      Two Reasons Why Waiting a Year To Buy Could Cost You

      Two Reasons Why Waiting a Year To Buy Could Cost You | MyKCM
       

      If you’re a renter with a desire to become a homeowner, or a homeowner who’s decided your current house no longer fits your needs, you may be hoping that waiting a year might mean better market conditions to purchase a home.

      To determine if you should buy now or wait, you need to ask yourself two simple questions:

      1. What will home prices be like in 2022?
      2. Where will mortgage rates be by the end of 2022?

      Let’s shed some light on the answers to both of these questions.

      What will home prices be like in 2022?

      Three major housing industry entities project continued home price appreciation for 2022. Here are their forecasts:

      Using the average of the three projections (6.27%), a home that sells for $350,000 today would be valued at $371,945 by the end of next year. That means, if you delay, it could cost you more. As a prospective buyer, you could pay an additional $21,945 if you wait.

      Where will mortgage rates be by the end of 2022?

      Today, the 30-year fixed mortgage rate is hovering near historic lows. However, most experts believe rates will rise as the economy continues to recover. Here are the forecasts for the fourth quarter of 2022 by the three major entities mentioned above:

      That averages out to 3.7% if you include all three forecasts, and it’s nearly a full percentage point higher than today’s rates. Any increase in mortgage rates will increase your cost.

      What does it mean for you if both home values and mortgage rates rise?

      You’ll pay more in mortgage payments each month if both variables increase. Let’s assume you purchase a $350,000 home this year with a 30-year fixed-rate loan at 2.86% after making a 10% down payment. According to the mortgage calculator from Smart Asset, your monthly mortgage payment (including principal and interest payments, and estimated home insurance, taxes in your area, and other fees) would be approximately $1,899.

      That same home could cost $371,945 by the end of 2022, and the mortgage rate could be 3.7% (based on the industry forecasts mentioned above). Your monthly mortgage payment, after putting down 10%, would increase to $2,166.Two Reasons Why Waiting a Year To Buy Could Cost You | MyKCM

      The difference in your monthly mortgage payment would be $267. That’s $3,204 more per year and $96,120 over the life of the loan.

      If you consider that purchasing now will also let you take advantage of the equity you’ll build up over the next calendar year, which is approximately $22,000 for a house with a similar value, then the total net worth increase you could gain from buying this year is over $118,000.

      Bottom Line

      When asking if you should buy a home, you probably think of the non-financial benefits of owning a home as a driving motivator. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.

      The Truth About Today's Buyer Demand

      The Truth About Todays Buyer Demand | MyKCM
       

      When it comes to the latest news in real estate, there are a lot of sensational headlines in the media. In times like this, when it can be hard to know what to believe, put your trust in the experts. Those of us in the housing market respect that buying or selling a home is a major life decision, and we offer advice based on what the data shows.

      Despite what you may have read, the housing market is still undeniably strong. Here’s a look at what leading experts have to say about buyer demand today and how it continues to shape the industry:

      Michael Lane, President at ShowingTime:

      “In general, there are definite signs of cooling demand. However, buyer traffic is still at historically high levels compared to pre-pandemic showings.”

      Odeta Kushi, Deputy Chief Economist at First American:

      “Seasonally adjusted purchase applications tick up slightly to the highest level since July. Demand for homes remains strong and steady. Excluding 2020 (not a good benchmark) purchase applications are the strongest in a decade.” 

      Selma Hepp, Deputy Chief Economist at CoreLogic:

      Home buyer demand pushed price growth to a new record high in June, with S&P CoreLogic national Case-Shiller Index clocking in an 18.6% year-over-year growth rate. The month-to-month index jumped 2.18%, making it another strong monthly growth, and the fastest May-to-June increase since the data series began.”

      What It Means for You

      As a seller, buyer demand is an important factor that helps influence how fast your house will sell and how many buyers may be competing for it. When buyers have to compete against each other for a limited supply of available homes, bidding wars can drive prices up. While things have cooled slightly since the peak of the pandemic housing rush, buyer demand is still far surpassing historical norms. That’s why we’re still in a sellers’ market.

      Bottom Line

      If you’re torn on whether or not you want to sell your home this year, rest assured it’s still a great time to make a move. Let’s connect to discuss how you can sell now and do it on your best terms thanks to today’s buyer demand.

      What Buyers and Sellers Need To Know About the Appraisal Gap

      What Buyers and Sellers Need To Know About the Appraisal Gap | MyKCM

      It’s economy 101 – when supply is low and demand is high, prices naturally rise. That’s what’s happening in today’s housing market. Home prices are appreciating at near-historic rates, and that’s creating some challenges when it comes to home appraisals.

      In recent months, it’s become increasingly common for an appraisal to come in below the contract price on the house. Shawn Telford, Chief Appraiser for CoreLogic, explains it like this:

      Recently, we observed buyers paying prices above listing price and higher than the market data available to appraisers can support. This difference is known as ‘the appraisal gap . . . .’”

      Why does an appraisal gap happen?

      Basically, with the heightened buyer demand, purchasers are often willing to pay over asking to secure the home of their dreams. If you’ve ever toured a house you’ve fallen in love with, you understand. Once you start to picture yourself and your furniture in the rooms, you want to do everything you can to land the property, including putting in a high offer to try to beat out other would-be buyers.

      When the appraiser comes in, they look at things a bit more objectively. Their job is to assess the inherent value of the home, so they’re going to study the facts. Dustin Harris, Appraiser Coach, drives this point home:

      It’s important for everyone to understand that the appraiser’s job in the end is to remain that unbiased third party, to truly tell the client what that home is worth in the current market, regardless of what decisions have been made on the price side of things.”

      In simple terms, while homebuyers may be willing to pay more, appraisers are there to assess the market value of the home. Their goal is to make sure the lender isn’t loaning more money than the home is worth. It’s objective, rather than emotional.

      In a highly competitive market like today’s, having a discrepancy between the two numbers isn’t unusual. Here’s a look at the increasing rate of appraisal gaps, according to data from  CoreLogic (see graph below):What Buyers and Sellers Need To Know About the Appraisal Gap | MyKCM

      What does this mean for you?

      Ultimately, knowledge is power. The best thing you can do is understand appraisal gaps may impact your transaction if you’re buying or selling. If you do encounter an appraisal below your contract price, know that in today’s sellers’ market, the most common approach is for the seller to ask the buyer to make up the difference in price. Buyers, be prepared to bring extra money to the table if you really want the home.

      Above all else, lean on your real estate agent. Whether you’re a buyer or seller, your trusted advisor is your ally if you come up against an appraisal gap. We’ll help you understand your options and handle any additional negotiations that need to happen.

      Bottom Line

      In today’s real estate market, it’s important to stay informed on the latest trends. Let’s connect so you have an ally to help you navigate an appraisal gap to get the best possible outcome.

      What Do Experts Say About Today's Mortgage Rates?

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

      What Do Experts Say About Todays Mortgage Rates? | MyKCM 

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

      Sam Khater, Chief Economist at Freddie Macpoints out the historic nature of today’s 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 Americantalks about how rates impact a buyer’s 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 today’s 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. It’s 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. Today’s 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 we’re 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. Let’s connect today to discuss today’s rates and determine if now’s the time for you to buy.

      Looking for a Place To Call Home? Consider a Condominium

      Looking for a Place To Call Home? Consider a Condominium. | MyKCM
       

      It’s no secret that one of the top stories in today’s real estate market is low housing supply and high buyer demand. If you’re a first-time buyer looking for a starter home or are someone who’s interested in downsizing, it may be worth considering a condominium (condo) as a worthwhile option.

      In fact, trends indicate condos are gaining popularity among buyers. In the latest Existing Homes Sales Report from the National Association of Realtors (NAR), the data shows condo sales rising throughout the first half of this year (see graph below):

      Looking for a Place To Call Home? Consider a Condominium. | MyKCM 

      There are a few reasons more and more people are opting to buy condos – the benefits of condo life can be quite compelling. Let’s explore the main perks to find out if a condo is a good fit for you.

      Affordability

      According to the NAR report, the median sales price of a condo is roughly $59,000 less than the median price of a single-family detached home (see graph below). This makes condos a great option for first-time homebuyers, those with limited down payment savings, or those looking to save money by downsizing.Looking for a Place To Call Home? Consider a Condominium. | MyKCM

      Maintenance

      A recent article from BankRate adds low maintenance as another perk of a condo lifestyle. Generally, exterior maintenance for condos is handled by a Homeowner’s Association (HOA). This can include things like landscaping and upholding a certain standard of cleanliness and condition for walkways, siding, and roofs. If you’re looking for a lower-maintenance option or see the appeal in being hands-off with upkeep, condos may be a good choice for you. With exterior maintenance off your plate, you’ll have more time for yourself and your hobbies.

      Amenities

      You can use that free time to enjoy some of the value-adding features your condo community may have, which could include dog parks, pools, a rentable clubhouse and grilling area for events, and more. If being able to host or attend community social outings is important to you, condos may give you more opportunities to enjoy the company of your neighbors. As a bonus, some condos even have gyms and on-site security teams.

      Ultimately, the choice is yours. Condos are great options that often come with various features and benefits that may be important for your lifestyle. Fannie Mae sums up the appeal nicely:

      Condominiums, or condos, can be great alternatives to detached homes. City dwellers, singles, couples, seniors, and many others may find condos that suit their needs and budgets. Others may simply prefer low-maintenance living. Buyers who feel ‘priced out’ of homes may discover condos offer an affordable homeownership alternative.

      Bottom Line

      If you’re looking for a home, it may be time to consider a condo as an option. Let’s connect to explore if one would be a good fit for your homeownership needs.

      The Community and Economic Impacts of a Home Sale

      The Community and Economic Impacts of a Home Sale | MyKCM
       

      If you’re thinking of buying or selling a house, chances are you’re focusing on the many extraordinary ways it’ll change your life. What you may not realize is that decision impacts people’s lives far beyond your own. Home purchases and sales are significant drivers of economic activity. They have a major impact on your community and the entire U.S. economy via the multiple industries and professionals that take part in the process.

      The National Association of Realtors (NAR) releases a report each year that highlights just how much economic activity a home sale generates. The chart below shows how the sale of both a newly built home and an existing home impact the economy:

      The Community and Economic Impacts of a Home Sale | MyKCM 

      To dive a level deeper, NAR also provides a detailed look at how that varies state-by-state for newly-built homes (see map below):

      The Community and Economic Impacts of a Home Sale | MyKCM 

      As you can see, a single home sale can have a massive effect on the overall economy. Ali Wolf, Chief Economist for Zonda, talks about this in a recent article, noting there’s a significant impact at each distinct phase of the transaction:

      The housing market contributes to the economy in four main stages: during planning and land development, throughout the actual construction of the home, at the point of sale, and upon moving in.

      When you buy or sell a home, you’re leaving a lasting impression on the community at large in addition to fulfilling your own needs. That’s because each stage of the process involves numerous contractors, specialists, lawyers, town and city officials, and so many other professionals. Every individual you work with, from your trusted real estate advisor to the architects who design new homes, has their own team of professionals involved behind the scenes.

      Bottom Line

      Homebuyers and sellers are economic drivers in their community and beyond. If you’re thinking of buying or selling, let’s connect today to start the process. It won’t just change your life; it’ll make a powerful impact on our entire community.

      Ready To Sell, but Don't Know Where You'll Go?

      Ready To Sell, but Dont Know Where Youll Go? [INFOGRAPHIC] | MyKCM
       

      Some Highlights

      • If you’re thinking of selling your house but don’t know what you should buy, you have options.
      • Existing homes offer a wide variety of home styles, an established neighborhood, and lived-in charm. Meanwhile, new home construction lets you create your perfect home, cash in on energy efficiency, and minimize repairs.
      • Whether you’re looking for newly built or existing homes, both have their perks. If you’re ready to sell your house, let’s connect today to go over the perks of both existing and newly built homes to find out what’s right for you.
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