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      Blog :: 09-2021

      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.

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