Have you seen headlines talking about the increase in foreclosures in today’s housing market? If so, they may leave you feeling a bit uneasy about what’s ahead. But remember, these clickbait titles don’t always give you the full story.

The truth is, if you compare the current numbers with what usually happens in the market, you’ll see there’s no need to worry.

Putting the Headlines into Perspective

The increase the media is calling attention to is misleading. That’s because they’re only comparing the most recent numbers to a time where foreclosures were at historic lows. And that’s making it sound like a bigger deal than it is.

In 2020 and 2021, the moratorium and forbearance program helped millions of homeowners stay in their homes, allowing them to get back on their feet during a very challenging period.

When the moratorium came to an end, there was an expected rise in foreclosures. But just because foreclosures are up doesn’t mean the housing market is in trouble.

Historical Data Shows There Isn’t a Wave of Foreclosures

Instead of comparing today’s numbers with the last few abnormal years, it’s better to compare to long-term trends – specifically to the housing crash – since that’s what people worry may happen again.

Take a look at the graph below. It uses foreclosure data from ATTOM, a property data provider, to show foreclosure activity has been consistently lower (shown in orange) since the crash in 2008 (shown in red):

So, while foreclosure filings are up in the latest report, it’s clear this is nothing like it was back then.

In fact, we’re not even back at the levels we’d see in more normal years, like 2019. As Rick Sharga, Founder and CEO of the CJ Patrick Company, explains:

“Foreclosure activity is still only at about 60% of pre-pandemic levels. . .”

That’s largely because buyers today are more qualified and less likely to default on their loans. Delinquency rates are still low and most homeowners have enough equity to keep them from going into foreclosure. As Molly Boesel, Principal Economist at CoreLogic, says:

“U.S. mortgage delinquency rates remained healthy in October, with the overall delinquency rate unchanged from a year earlier and the serious delinquency rate remaining at a historic low… borrowers in later stages of delinquencies are finding alternatives to defaulting on their home loans.”

The reality is, while increasing, the data shows a foreclosure crisis is not where the market is today, or where it’s headed.

Bottom Line

Even though the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst. If you have questions about what you’re hearing or reading about the housing market, let’s connect.

If you’re looking to buy a home, you’ve probably been paying close attention to mortgage rates. Over the last couple of years, they hit record lows, rose dramatically, and are now dropping back down a bit. Ever wonder why?

The answer is complicated because there’s a lot that can influence mortgage rates. Here are just a few of the most impactful factors at play.

Inflation and the Federal Reserve

The Federal Reserve (Fed) doesn’t directly determine mortgage rates. But the Fed does move the Federal Funds Rate up or down in response to what’s happening with inflation, the economy, employment rates, and more. As that happens, mortgage rates tend to respond. Business Insider explains:

“The Federal Reserve slows inflation by raising the federal funds rate, which can indirectly impact mortgages. High inflation and investor expectations of more Fed rate hikes can push mortgage rates up. If investors believe the Fed may cut rates and inflation is decelerating, mortgage rates will typically trend down.”

Over the last couple of years, the Fed raised the Federal Fund Rate to try to fight inflation and, as that happened, mortgage rates jumped up, too. Fortunately, the expert outlook for inflation and mortgage rates is that both should become more favorable over the course of the year. As Danielle Hale, Chief Economist at Realtor.com, says:

“[M]ortgage rates will continue to ease in 2024 as inflation improves . . .”

There’s even talk the Fed may actually cut the Fed Funds Rate this year because inflation is cooling, even though it’s not yet back to their ideal target.

The 10-Year Treasury Yield

Additionally, mortgage companies look at the 10-Year Treasury Yield to decide how much interest to charge on home loans. If the yield goes up, mortgage rates usually go up, too. The opposite is also true. According to Investopedia:

“One frequently used government bond benchmark to which mortgage lenders often peg their interest rates is the 10-year Treasury bond yield.”

Historically, the spread between the 10-Year Treasury Yield and the 30-year fixed mortgage rate has been fairly consistent, but that’s not the case recently. That means, there’s room for mortgage rates to come down. So, keeping an eye on which way the treasury yield is trending can give experts an idea of where mortgage rates may head next.

Bottom Line

With the Fed meeting later this week, experts in the industry will be keeping a close watch to see what they decide and what impact it’ll have on the economy. To navigate any mortgage rate changes and their impact on your moving plans, it’s best to have a team of professionals on your side.

If one of the goals on your list is selling your house and making a move this year, you’re likely juggling a mix of excitement about what’s ahead and feeling a little sentimental about your current home.

A great way to balance those emotions and make sure you’re confident in your decision is to keep these three best practices in mind when you’re ready to sell.

1. Price Your Home Right

The housing market shifted in 2023 as mortgage rates rose and home price appreciation started to normalize once again. As a seller, you still need to recognize how important it is to price your house appropriately based on where the market is today. Hannah Jones, Economic Research Analyst for Realtor.com, explains:

“Sellers need to become familiar with their local market and work closely with a local agent to make sure their listing is attractive to buyers. Buyers feeling the pressure of affordability are likely to be pickier, so a well-priced, well-maintained home is the ticket to drumming up big demand.”

If you price your house too high, you run the risk of deterring buyers. And if you go too low, you’re leaving money on the table. An experienced real estate agent can help determine what your ideal asking price should be, so your house moves quickly and for top dollar.

2. Keep Your Emotions in Check

Today, homeowners are staying in their houses longer than they used to. According to the National Association of Realtors (NAR), since 1985, the average time a homeowner has owned their home has increased from 6 to 10 years (see graph below):

This is much more than what used to be the norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you bought or the house where your loved ones grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from the sentimental value.

For some homeowners, that makes it even tougher to separate the emotional value of the house from fair market price. That’s why you need a real estate professional to help you with the negotiations and the best pricing strategy along the way. Trust the professionals who have your best interests in mind.

3. Stage Your Home Properly

While you may love your decor and how you’ve customized your house over the years, not all buyers will feel the same way about your vibe. That’s why it’s so important to make sure you focus on your home’s first impression, so it appeals to as many buyers as possible.

Buyers want to be able to picture themselves in the home. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. As Jessica Lautz, Deputy Chief Economist and Vice President of Research at NAR, says:

“Buyers want to easily envision themselves within a new home and home staging is a way to showcase the property in its best light.”

A real estate professional can help you with expertise on getting your house ready to sell.

Bottom Line

If you’re considering selling your house, let’s connect so you have help navigating the process while prioritizing these must-do’s.

Some Highlights

• Buying a home is a big deal and can feel especially complicated if you don’t know the terms used during the process.
• If you want to become a homeowner this year, it’s a good idea to learn these key housing terms and understand how they relate to the current housing market. That will help you feel confident when you buy a home.
• Let’s connect so you can get expert help with any questions you have.

If you’ve been holding off on selling your house to make a move because you felt mortgage rates were too high, their recent downward trend is exciting news for you. Mortgage rates have descended since last October when they hit 7.79%. In fact, they’ve been below 7% for over a month now (see graph below):

And while they’re not going back to the 3% we saw during the ‘unicorn’ years, they are expected to continue to go down from where they are now in the near future. As Dean Baker, Senior Economist at the Center for Economic Research, explains:

“It also appears that mortgage rates are now falling again. They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”

Here are two reasons why this recent trend, and the expectation it’ll continue, is such good news for you.

You May Not Feel as Locked-In to Your Current Mortgage Rate

With mortgage rates already significantly lower than they were just a few months ago, you may feel less locked-in to the current mortgage rate you have on your house. When mortgage rates were higher, moving to a new home meant possibly trading in a low rate for one up near 8%.

However, with rates dropping, the difference between your current mortgage rate and the new rate you’d be taking on isn’t as big as it was. That makes moving more affordable than it was just a few months ago. As Lance Lambert, Founder of ResiClub, explains:

“We might be at peak “lock-in effect.” Some move-up or lifestyle sellers might be coming to terms with the fact 3% and 4% mortgage rates aren’t returning anytime soon.”

More Buyers Will Be Coming to the Market

According to data from Bright MLS, the top reason buyers have been waiting to take the plunge into homeownership is high mortgage rates (see graph below):

Lower mortgage rates mean buyers can potentially save money on their home loans, making the prospect of purchasing a home more attractive and affordable. Now that rates are easing, more buyers are likely to feel they’re ready to jump back into the market and make their move. And more buyers mean more demand for your house.

Bottom Line

If you’ve been waiting to sell because you didn’t want to take on a larger mortgage rate or you thought buyers weren’t out there, the recent decline in mortgage rates may be your sign it’s time to move. When you’re ready, let’s connect.

Some Highlights

• If you’re worried about what’s next for home prices, know the HPES shows experts are projecting they’ll continue to rise at least through 2028.
• Based on that forecast, if you bought a $400,000 house this year, experts say it could gain over $72,000 in equity over the next five years.
• If you’re worried about falling home prices, don’t be. Many experts forecast they’ll keep rising for years to come. If you have questions, let’s connect.

If buying or selling a home is your goal for 2024, it’s important to understand today’s housing market, know your why, and work with industry experts to bring your homeownership vision for the new year into focus.

Over the last year, the economy had a big impact on the housing market, and likely on your wallet too. That’s why it’s critical to have a clear picture of not just the market today, but also on what you want out of it when you buy or sell a home. Danielle Hale, Chief Economist at Realtor.com, explains:

“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, so that you can stay in your home long enough that buying is a sound financial decision.”

Here are a few things to think through as you define your goals for 2024.

1. Know Your Why

You’re dreaming about making a move for a reason – what is it? No matter what’s happening in the market, there are still many compelling reasons to buy a home today. Your needs may have changed in a way your current house can’t address, or you could be ready to step into homeownership for the first time. Use your why and your motivation as a guidepost in partnership with an expert advisor to make sure your move gives you a lasting sense of accomplishment.

2. Figure Out What Your Next Home Needs To Look Like

You know you want to move, but how would you describe your dream home? The number of homes for sale has grown recently, and that could mean more options to choose from when you buy. But overall housing supply is still lower than more normal years in the market, so you’ll have to work closely with a pro to find what you’re looking for. Just be sure to keep your budget in mind as you balance your wants and needs. The better you understand what’s essential and where you can be flexible, the easier it will be to find a home that’s right for you.

3. Determine if You’re Ready To Buy

Getting clear on your budget and available savings is essential before you get too far into the process. Partnering with a local agent and a lender early is the best way to make sure you’re in a good position to buy. This could include planning how much to save for a down payment, getting pre-approved for a home loan, and assessing your current home equity if you’re selling your existing house.

A Professional Will Guide You Through Every Step of the Process

Buying or selling a home takes expertise to navigate. If that feels a bit overwhelming, that’s normal. Don’t let uncertainty hold you back from your goals this year. A trusted expert will help you bridge that gap and give you the facts and advice you need about today’s housing market.

Bottom Line

Let’s connect to plan how to make your homeownership dreams a reality in 2024.

When you read about the housing market, you’ll probably come across some information about inflation or recent decisions made by the Federal Reserve (the Fed). But how do those two things impact you and your homebuying plans? Here’s what you need to know.

The Federal Funds Rate Hikes Have Stalled

One of the Fed’s primary goals is to lower inflation. In order to do that, they started raising the Federal Funds Rate to slow down the economy. Even though this doesn’t directly dictate what happens with mortgage rates, it does have an impact.

Recently inflation has started to cool, a signal those increases worked and are bringing inflation back down. As a result, the Fed’s hikes have gotten smaller and less frequent. In fact, there haven’t been any increases since July (see graph below):

And not only has the Fed decided not to raise the Federal Funds Rate the last three times the committee met, they’ve signaled there may actually be rate cuts coming in 2024. According to the New York Times (NYT):

“Federal Reserve officials left interest rates unchanged in their final policy decision of 2023 and forecast that they will cut borrowing costs three times in the coming year, a sign that the central bank is shifting toward the next phase in its fight against rapid inflation.”

This indicates the Fed thinks the economy and inflation are improving. Why does that matter to you and your plans to buy a home? It could end up leading to lower mortgage rates and improved affordability.

Mortgage Rates Are Coming Down

Mortgage rates are influenced by a wide variety of factors, and inflation and the Fed’s actions (or as has been the case recently, inaction) play a big role. Now that the Fed has paused the increases, it looks more likely mortgage rates will continue their downward trend (see graph below):

Although mortgage rates may remain volatile, their recent trend combined with expert forecasts indicate they could continue to go down in 2024. That would improve affordability for buyers and make it easier for sellers to move since they won’t feel as locked-in to their current, low mortgage rate.

Bottom Line

The Fed’s decisions have an indirect impact on mortgage rates. By not raising the Federal Funds Rate, mortgage rates are likely to continue declining. Let’s connect so you have expert advice about changes in the housing market and how they affect you.

When it comes to what’s happening in the housing market, there’s a lot of confusion going around right now. You may hear one thing in conversation with your friends, see something totally different on the news, and read something on social media that contradicts both of those thoughts. And, if you’re thinking about making a move, that can leave you with a lot of lingering questions. That’s where a trusted local real estate agent comes in.

Here are the top 3 questions people are asking about today’s housing market, and the data to help answer them.

1. What’s Next for Mortgage Rates?

Mortgage rates are higher than they’ve been in recent years. And, if you’re looking to buy a home, that impacts how much you can afford. That’s why so many buyers want to know what’s ahead for mortgage rates. The answer to that question is: no one can say for certain, but here’s what we know based on historical trends.

There’s a long-standing relationship between mortgage rates and inflation. Basically, when inflation is high, mortgage rates tend to follow suit. Over the past year, inflation was up, so mortgage rates were as well. But inflation is easing now. And this is why the Federal Reserve has recently paused their federal funds rate hikes, which means many experts believe mortgage rates will begin to come down.

And in some ways, we’ve started to see hints of slightly lower mortgage rates in recent weeks. But it’s certainly been volatile and will likely continue to be that way going into next year. Some ongoing variation is to be expected, but the anticipation is, that in 2024, we’ll see a downward trend. As Aziz Sunderji, Strategist at Home Economics, says:

“The bottom line is that interest rates are likely to be lower-perhaps even lower than many optimists think – in the weeks and months to come.”

2. Where Are Home Prices Headed?

While there’s been a lot of concern prices would come crashing down this year, data shows that didn’t happen. In fact, home prices are rising in most of the nation. Experts say that trend will continue, just at a slower pace that’s much more normal for the housing market – and that’s a good thing.

To help show just how confident experts are in this continued appreciation, take a look at the Home Price Expectation Survey from Pulsenomics. It’s a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. As the graph below shows, the consensus is, that prices will keep climbing next year, and in the years to come.

3. Is a Recession Around the Corner?

While recession talk has been a common thing over the past few years, there’s good news on that front.

The Wall Street Journal (WSJ) polls experts on this topic regularly. And last year at this time, most of them thought a recession would have happened by now. But as experts look at all the leading indicators today, they’re changing their minds and saying a recession is getting less and less likely. The latest results show that more experts now think we’re not headed for another recession (see chart below):

This is big news for the housing market. And while the 48% to 52% split may seem close to half and half, the key thing to focus on is that the majority of these experts think we’ve avoided a recession already.

Bottom Line

The big takeaway? The data shows there isn’t cause for concern – there are actually more signs of hope. Let’s connect to talk more about the housing market questions on your mind as we head into the new year.

If you’re looking to make a move, you want to be sure you have the latest information on the housing market. To help make that possible, here’s an update on the supply of homes for sale today. Whether you’re looking to buy or sell, the number of homes available in your local market matters to you. Take a look below.

What’s the Truth About Today’s Housing Inventory?

While the story for the past few years has been how few homes are on the market, recent national data may leave you feeling a bit confused. That’s because Realtor.com shows inventory is actually growing a bit month-over-month in many parts of the country (see the blue states in the map below):

As the map shows, nationally, housing supply increased just over 5% last month.

Does That Mean the Days of Limited Inventory Are Over?

That might make you wonder: are the days of tight housing supply behind us? The short answer is no. Context is important. While you may see headlines saying inventory is up, data also shows there are still significantly fewer homes for sale than there would usually be in a more normal market.

The graph below compares the latest active listing counts (homes currently available for sale) with the most recent normal years in the housing market (2017-2019):

As Lance Lambert, Founder, ResiClub Analytics, explains:

“Housing market inventory is so far below pre-pandemic levels that October’s big jump is still just a drop in the bucket.”

What does that mean for you? Remember, real estate is hyper-local. Partnering with a trusted real estate agent will help you gain a better understanding of the inventory situation in your specific market.

If you’re looking to buy, you may have slightly more options than you did in recent months, but you still need to brace for low inventory. A great agent will be able to share their expertise and key strategies that have helped other buyers navigate today’s ongoing low housing supply.

And, if you’re trying to sell, rest assured you haven’t missed your window of opportunity to potentially get multiple offers or see your house sell quickly. While inventory has ticked up some nationally, overall, it’s still low and may be down even more in your area.

Bottom Line

If you’re looking to buy or sell a home, let’s connect so you can make sure you’re up to date on all the latest trends that could impact your move, including today’s housing supply.