May 2020 – Market Update

  May 2020 Welcome to May! The weather is improving across the city of San Jose, and thankfully, so is the fight against COVID-19. But what about our housing market? Are home prices up or down? Is anyone buying or selling real estate while also sheltering in place?   As you know, the coronavirus pandemic […]

Staying Safe While Buying or Selling Real Estate During COVID-19

It’s obvious that buying or selling real estate during any crisis is not an optimal scenario. Unfortunately, there will most likely be some that may not have the luxury of being able to postpone the sale or purchase of real estate until the current pandemic disappears. This post is for you, to help provide critical information meant to keep you safe as well as provide some level of expectation as to how you may be able to navigate the already complex process of buying or selling real estate under the pressure of a worldwide pandemic.

At NextHome Lifestyles, our goal has always been to guide our clients through the home buying and selling process with professional courtesy and expert local knowledge, and given current circumstances, our commitment has never been stronger. So, if you feel that you may be one of the few faced with the challenge of buying or selling real estate in the coming months then we want to make sure you’re aware of exactly what that commitment looks like, and how we are implementing best practices and critical protocols to keep you safe.

If you aren’t already aware, as of March 31, 2020, real estate services in Santa Clara County have been considered as an “essential business” under the most recent Health Order. Although this means that we can still assist in the purchase and sale of real estate, this does not mean that things are back to business as usual. It’s clear that we all have a social responsibility to help prevent the spread of COVID-19, and as local residents and business owners ourselves we are very serious about keeping our communities safe. So, effective immediately we have implemented all the recommended guidelines provided by our local, state and federal government, as well as by the CDC.

But first, before we get into the logistics of how real estate may be conducted under the current shelter in place mandate, the most important message we can promote is the importance of discussing your situation and goals with your real estate professional in order to determine whether you can or should postpone your move. Although real estate services are now considered as an “essential” service under the new health order and “shelter in place” mandate, all unnecessary real estate activities are still strictly discouraged. This means you won’t be seeing any public open houses, availability to schedule private tours will also be extremely limited, and affiliated service providers will also be limited in their capacity to support your transaction.

For your convenience, we’re available to walk you through these considerations virtually through video-conferencing in order to have an open and candid conversation about your options, as well as provide details on how we are committed to keeping you safe if you are unable to avoid postponing your real estate transaction. Additionally, here’s a quick list of the most common questions that we receive during these virtual appointments and the information we are sharing (which may change as things continue to develop over the coming weeks):

Are people still buying and selling homes? Quick answer is “yes,” but with new protocols and limitations meant to keep everyone safe as well as slow the possible spread of COVID-19. Again, please contact us so that we can walk you through all the latest developments as well as thoroughly discuss the potential impact on your upcoming or impending transaction.

How has the process of buying and selling a home changed since the pandemic started? Many businesses are now closed or operating on a very limited basis including real estate affiliated services such as home inspection companies, lenders, appraisers, home stagers, movers, etc. which make it challenging to facilitate any transaction. Plus, new safety protocols place additional limitations on our ability to serve our clients so now virtual showings and video conferencing will make up the majority, if not the entirety, of the transaction in order to limit potential face-to-face meetings or in-person property tours.

How are we handling our appointments? All appointments are conducted by video conferencing technology, whether you are more comfortable with FaceTime or Zoom, we’re available to meet you face-to-digital-face online. We’re taking any and all appointments, no matter what your scenario, or your questions…we are here for you and available to provide some clarity in very uncertain times.

How can we tour properties while sheltering in place? While we’d love to take you on tours of homes in-person it’s just not that practical under current conditions…everyone is doing their part to slow the spread and protect our communities, and at the moment touring homes is not necessarily “essential” under our current health mandate. Therefore, we have adopted technologies that will be able to accommodate showings by video conferencing for any home you’re interested in viewing. And, if it’s one of our listings we’ll have a digital 3-dimensional rendering available for you to move through at your own pace, or we can even schedule a time to guide you through a virtual showing over video conference in order to provide more detailed information and answer questions about the property.

Can we visit a home in-person before making an offer? All in-person showings now involve the risk of potential exposure to multiple other parties. So, depending upon your circumstances, as well as those of the property you’re interested in making an offer, this may or may not be appropriate. If you deem it is appropriate, then we will only be able to show you homes in which the seller has already moved out, and only with 2 guests of the same household at any particular time.

If you’re inquiring with our agents to take you on an in-person property tour we will require the additional items before we’re able to accommodate your requests:

  • Pre-approval letter
  • Proof of Funds for your down payment or letter from your Lender verifying your down payment
  • Completed Homebuyer Questionnaire Form
  • Completed “Property Entry Advisory & Declaration” form for each home you tour

What safety protocols are being put into place if we have to visit a property in-person? Keep in mind that any unnecessary exposure can also create unnecessary exposure for others that may also be touring a property, so you should expect to follow specific social distancing protocols and CDC guidelines. These now include the following:

  • If you’re feeling sick, please stay home
  • Only 2-people from the same household may tour any property at the same with the company of your real estate agent
  • Showings will be limited in time to maximum 30-minutes
  • A hand washing station or access to hand sanitizer will be available
  • Shoe covers will be provided
  • You’ll be asked to keep your hands to yourself, refrain from operating any light switches, and to not open doors, cabinets or drawers

Please note, we will not be providing you with face masks or gloves. While our goal is to limit any undue exposure within our community, we must also do our part to ensure that as much protective equipment as possible is available to our health professionals.

If I have to list my home, how will you handle showings? First, if you’re occupying your home then we will need to delay any in-person showings until after you have moved out. But, we can still accommodate virtual showings…if you are choosing to stay in your home during the sale then we will use our technology and marketing skills to craft immersive marketing materials including 3-dimensional digital models, high definition narrated video tours, and of course beautiful photography. We can also schedule video conferencing appointments in which we can digitally tour prospective buyers through your home while answering all their questions and keeping everyone safe.

If your home is vacant then in-person property showings are allowable but only for pre-approved buyers that follow the strict social distancing protocols required under the current SIP mandate. In summary, only 2-guests from the same household plus an agent will be allowed in your property at any given time. We also follow CDC guidelines for slowing the spread and will be providing hand sanitizer, handwashing stations, shoe covers and more.

If I have my home on the market for sale, should I withdraw it? If a home seller is serious about selling, then our advice to you is to stay the course. Although buyer interest will differ depending on your price range and location, overall we’re still experiencing a market in which our available inventory remains extremely limited which favors home sellers. Plus, modern technology allows for extremely thorough virtual tours so even though in-person showings will be drastically reduced, or discouraged altogether, with mortgage rates at all-time lows there will most assuredly be plenty of buyers who will be taking advantage to leverage their buying power and making offers solely based on virtual presentations.

5 Powerful Reasons to Own Instead of Rent

Owning a home has great financial benefits.

In a recent research paper, Homeownership and the American Dream, Laurie S. Goodman and Christopher Mayer of the Urban Land Institute explained:

“Homeownership appears to help borrowers accumulate housing and nonhousing wealth in a variety of ways, with tax advantages, greater financial flexibility due to secured borrowing, built-in ‘default’ savings with mortgage amortization and nominally fixed payments, and the potential to lower home maintenance costs through sweat equity.”

Let’s breakdown 5 major financial benefits of homeownership:

1. Housing is typically the one leveraged investment available

Homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. A 20% down payment results in a leverage factor of five, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10%, your leverage factor is 10.

Example: Let’s assume you purchased a $300,000 home and put down $60,000 (20%). If the house appreciates by $30,000, that is only a 10% increase in value but a 50% increase in equity.

2. You’re paying for housing whether you own or rent

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are baked into the rent payment already – along with a profit margin!!

3. Owning is usually a form of “forced savings”

Studies have shown that homeowners have a net worth that is 44X greater than that of a renter. As a matter of fact, it was recently estimated that a family buying an average priced home this past January could build more than $42,000 in family wealth over the next five years.

4. Owning is a hedge against inflation

House values and rents tend to go up at or higher than the rate of inflation. When you own, your home’s value will protect you from that inflation.

5. There are still substantial tax benefits to owning

We know that the new tax reform bill puts limits on some deductions on certain homes. However, in the research paper referenced above, the authors explain:

“…the mortgage interest deduction is not the main source of these gains; even if it were removed, homeowners would continue to benefit from a lack of taxation of imputed rent and capital gains.”

Bottom Line

From a financial standpoint, owning a home has always been and will always be better than renting.

San Jose Market Update – Sept 2019

It’s September…school’s back in session and summer is over. And, if you’re thinking about buying or selling a home this fall then be sure to review our insights below as we discuss current market trends as well as what to expect over the next several months.

Let’s start off discussing what’s been top-of-mind lately, like how an impending recession may lead to another housing crisis likened to what we saw in 2008. Well, let’s take this opportunity to dispel these fears.

Although a slowdown in the economy in 2020 is being predicted, this time around housing will not be the cause of the slowdown, and more likely, home values will actually continue to trend upward.  In fact, home values actually increased in three (3) out of the last five (5) recessions, and decreased by less than 2% in the fourth (4th).

The main reason we saw a major housing crash during the last recession in 2008 was from the mortgage meltdown and the subsequent housing market crash that caused it.

For more information about this topic, check out my recent video “Does a Looming Recession Equate to a Housing Crisis?

Looking at national housing prices, if a major housing crash were on the horizon, wouldn’t you expect to see prices falling from last year?

Well, we’re actually seeing good growth across the US as August reported that home prices grew 4.99% nationally compared to last year. Drilling down closer to home, in the Pacific Region of the country, our year-over-year home price appreciation reported to be 4.4%; and even closer to home, Statewide for California we saw a little less price growth with a 4.2% increase.

With these positive numbers, so far it appears that our economy is still strong enough to support growing homeownership rates. And, looking forward, even in the eyes of a slowing economy, the national housing market is actually expected to gain 5.2% appreciation through next year, with California expected to see as much as an 8.2% increase in prices year-over-year.

What’s causing all the positive price growth?

Well, the Federal Reserve is actively combating our recession woes by continuing to ease interest rates which are helping long-term mortgage rates stay low, even recently hitting historic lows not seen since 2016. This is great news as lower mortgage rates help increase purchase power and affordability, something which Bay Area residents can really celebrate.

Now let’s look at the current supply and demand here in San Jose, and compare against last month and last year.

Total ACTIVE inventory was down again for the month of August with 1,126 TOTAL homes available for sale, a decline of 8% from July, but up 1.5% from the same time last year. And, the number of New Listings, which provide us a glimpse into rising or declining listing activity, was also just slightly down by 2.5% from July coming in at 777, but down over 13% from the same time last year…

Now for Buyer Demand…with mortgage rates at or near historic lows, we’d hope to see demand stabilizing. And, with August reporting a slight decline of 2% from last month with 676 Total Closed Sales, and a total of 627 homes receiving a contract, also slightly down from last month, I think we are seeing just that. Plus, Freddie Mac’s Chief Economist recently reported that Homebuyers flocked to lenders in August with purchase applications, which were up 15 percent from a year ago.

So, as long as pending sales, which are being driven by lower rates and softening housing prices, continue to keep up with new listings, we should continue to see a very stable and balanced market.

Median Days that a property is on the market before receiving a contract was 19 days for August, up slightly from the month before, but overall, anything less than 30-days is still a great market. And, the Median Sales-to-List-Price ratio, which compares the sales price received for a home versus its asking price, was slightly down for August compared to last month, reporting at 100.2%…so, on average, homes are still expected to sell for slightly more than the listing price.

Our Median Sales Price this month is continuing on a slight downward trend, dipping to $949,500, down 5% from last month, and down 7.5% from our peak earlier this year in June.

But, our prices are still up 2% from the beginning of the year.

So, have we reached a price-plateau…maybe? The Median Sales Price has been holding pretty steady since last fall.

So, what are these market trends telling us?

The best indicator of what to expect comes from looking at the current month’s worth of supply which measures how quickly new listings are absorbed by the current level of buyer demand, which for August was just under 2.0 months.

As you may recall, anything under 6-months worth of supply is considered a seller’s market.

Although it may not exactly feel like a seller’s market around the Bay Area, as home sellers have unbelievably become accustomed to homes selling at 10-15% above their asking prices within days of being listed, that’s because we’re finally settling into a more balanced market.

So, for anyone looking to sell this Fall, conditions are still in your favor but you must adjust your expectations as the market is not as crazy as it was…your home must be priced appropriately if you wish to generate the interest levels necessary to sell quickly and at a good price.

Market changes always seem to insight fear since things stop behaving exactly how they have been. And with all the negative headlines predicting a looming recession, it’s no wonder why many homebuyers are sitting on the sideline waiting to see what happens.

Well, this is a wake-up call to all homebuyers…don’t miss the opportunity to lock in a very low housing payment and a very reasonable price. The market hasn’t looked this good for first-time homebuyers and move-up buyers in a long time.

So, if you’re still considering a move into your first home or your next home, and you haven’t updated your pre-approval in a few months, it’s a great time to find out how these low rates have improved your purchase power.

What Is the Probability That Home Values Sink?

With the current uncertainty about the economy triggered by a potential trade war, some people are waiting to purchase their first home or move-up to their dream house because they think or hope home prices will drop over the next few years. However, the experts disagree with this perspective.

Here is a table showing the predicted levels of appreciation from six major housing sources:What Is the Probability That Home Values Sink?| MyKCMAs we can see, every source believes home prices will continue to appreciate (albeit at lower levels than we have seen over the last several years). But, not one source is calling for residential real estate values to depreciate.

Additionally, ARCH Mortgage Insurance Company in their current Housing and Mortgage Market Review revealed their latest ARCH Risk Index, which estimates the probability of home prices being lower in two years. There was not one state that even had a moderate probability of home prices lowering. In fact, 34 of the 50 states had a minimal probability.What Is the Probability That Home Values Sink?| MyKCM

Bottom Line

Those waiting for prices to fall before purchasing a home should realize that the probability of that happening anytime soon is very low. With mortgage rates already at near historic lows, now may be the time to act.

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What’s the Latest on Interest Rates?

Mortgage rates have fallen by over a full percentage point since Q4 of 2018, settling at near-historic lows. This is big news for buyers looking to get more for their money in the current housing market.

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According to Freddie Mac’s Primary Mortgage Market Survey,

the 30-year fixed-rate mortgage (FRM) rate averaged 3.60 percent, the lowest it has been since November 2016.

Sam Khater, Chief Economist at Freddie Mac, notes how this is great news for homebuyers. He states,

“…consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”

As a potential buyer, the best thing you can do is work with a trusted advisor who can help you keep a close eye on how the market is changing. Relying on current expert advice is more important than ever when it comes to making a confident and informed decision for you and your family.

Bottom Line

Even a small increase (or decrease) in interest rates can impact your monthly housing cost. If buying a home is on your short list of goals to achieve, let’s get together to determine your best move.

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Busting the Myth About a Housing Affordability Crisis

It seems you can’t find a headline with the term “housing affordability” without the word “crisis” attached to it. That’s because some only consider the fact that residential real estate prices have continued to appreciate. However, we must realize it’s not just the price of a home that matters, but the price relative to a purchaser’s buying power.

Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by 3.5% over the last year.

Let’s look at three different reports issued recently that reveal how homes are very affordable in comparison to historic numbers, and how they have become even more affordable over the past several months.

1. National Association of Realtors’ (NAR)Housing Affordability Index:

Here is a graph showing the index going all the way back to 1990. The higher the column, the more affordable homes are:Busting the Myth About a Housing Affordability Crisis | MyKCMWe can see that homes are less affordable today (the green bar) than they were during the housing crash (the red bars). This was when distressed properties like foreclosures and short sales saturated the market and sold for massive discounts. However, homes are more affordable today than at any time from 1990 to 2008.

NAR’s report on the index also shows that the percentage of a family’s income needed for a mortgage payment (16.5%) is dramatically lower than last year and is well below the historic norm of 21.2%.Busting the Myth About a Housing Affordability Crisis | MyKCM

2. Black Knight’s Mortgage Monitor:

This report reveals that as a result of falling interest rates and slowing home price appreciation, affordability is the best it has been in 18 months. Black Knight Data & Analytics President Ben Graboske explains:

“For much of the past year and a half, affordability pressures have put a damper on home price appreciation. Indeed, the rate of annual home price growth has declined for 15 consecutive months. More recently, declining 30-year fixed interest rates have helped to ease some of those pressures, improving the affordability outlook considerably…And despite the average home price rising by more than $12K since November, today’s lower fixed interest rates have worked out to a $108 lower monthly payment…Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15%.”

3. First American’s Real House Price Index:

While affordability has increased recently, Mark Fleming, First American’s Chief Economist explains:

“If the 30-year, fixed-rate mortgage declines just a fraction more, consumer house-buying power would reach its highest level in almost 20 years.”

Fleming goes on to say that the gains in affordability are about mortgage rates and the increase in family incomes:

“Average nominal household incomes are nearly 57 percent higher today than in January 2000. Record income levels combined with mortgage rates near historic lows mean consumer house-buying power is more than 150 percent greater today than it was in January 2000.”

Bottom Line

If you’ve put off the purchase of a first home or a move-up home because of affordability concerns, you should take another look at your ability to purchase in today’s market. You may be pleasantly surprised!

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VLOG: Top 4 Reasons to Sell this Summer

Summer is now upon us in Silicon Valley, which usually means that the weather is heating up, many families are enjoying their summertime vacations, and that we’re close to reaching our annual peak in housing inventory. So, if you’re looking to sell your home this summer, what are the top considerations you should have before putting your home on the market?

#1. Strong Demand 

So far the real estate market is still bustling…The latest Buyer Traffic Index from the National Association of Realtors shows that buyer demand remains strong throughout the vast majority of the country. 

Motivated by lower interest rates and prices at the beginning of the year, we’ve continued to see strong buyer demand through most price points within Silicon Valley. These buyers are ready, willing, and able to purchase and, they are in the market right now! 

And, even with our current increased inventory levels, when properties are priced right we’re still experiencing multiple buyers competing with each other for the same home.

#2. Less Competition – Speaking of housing inventory, even at our current peak-levels we’re still under a 6-month supply across most price-points, which is usually considered as a “balanced” housing market. This means that, just like in most of the country, there are just not enough homes for sale to satisfy the number of buyers looking to purchase.

Lower inventory levels are something that has continued to plague our housing markets. This trend has remained strong due to an increase in the length of time that homeowners have historically stayed in their homes. 

Many of these homeowners were reluctant to list their home over the last couple of years for fear that they would not find a home to move in to. However, that is now finally changing as more inventory is becoming available at the higher-end. As more choices become available for these “move-up” buyers, the more inventory we’ll see become available at the entry-level market.

So if you’re thinking of selling, don’t wait until additional inventory comes to market before you to decide to sell.

#3. Now is a Great Time to Move Up 

If you’re one of the many home sellers looking to make a move into a larger home, or into a better location, now is “the time” to make that move up! 

We’re currently experiencing higher available inventory of homes for sale in the higher price ranges which has created a buyer’s market for “move-up” buyers. This means that if you are planning on selling an entry-level or trade-up home, it will sell quickly, AND you’ll be able to find a premium home to call your own!

#4. The Selling Process Has Become Quicker 

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing and saving up a downpayment before they begin shopping for a home. 

This means that most buyers will know exactly what they can afford before they even take a tour of your home…which has made the entire selling process much faster and simpler as most transactions involving purchase financing are closing within 40-days or less per a recent Origination Insights Report, by Ellie Mae.

In closing…

Although generally speaking, summer seems to be a more difficult time of the year in which to sell a property as we usually experience our highest inventory levels combined with diminishing buyer traffic, this summer looks more optimistic. Interest rates are at their lowest levels in several years, buyer traffic has increased, and prices are still stable.

As always, our goal is to provide some insight into current market conditions so that you can make a more informed decision about whether the timing is right for you to sell your home this summer.

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Special Mid-Year Market Update (July 2019)

It’s the beginning of July and we’re now half-way through 2019. And, if you’ve been considering to make a move in real estate, either to purchase a home or sell a home, I wanted to make sure I was able to provide some clarity on the current market conditions in and around Silicon Valley.

First of all, how have things been going this year?

2019 was speculated to be a great market for first-time homebuyers and move-up buyers due to rising inventory levels, diminishing investor demand for housing, and an easing of interest rates. And, with inventory beginning the year at very healthy levels (about twice as many homes available for sale when compared to last year), and interest rates remaining relatively low (even falling again recently), 2019 has held true to its forecast. 

[Side-bar: my team and I have already helped numerous families with the simultaneous sale and purchase of real estate…with many purchasing up into a larger home before selling their current home].

But, is this trend likely to hold up through the rest of the year?

Well, let’s talk about supply & demand trends…

So far we’ve seen the rebound in inventory from 2018 continue to hold up. Current “active” inventory across Santa Clara County is sitting at 2,222 listings, down slightly 9% from our peak in May, but up 8% from last year in July. And within San Jose, we’re currently sitting at 1,129 active listings, down slightly again from the peak earlier in May, and up 6% from the same time last year.

What’s interesting to me about this trend, is that our inventory levels are slightly down from the end of the spring market. And, with current interest rates for a 30-year fixed-rate mortgage sitting at 3.75%, down 0.75% from the same time last year, my assumption is that this trend is most likely due to the continued easing of interest rates allowing for an increased number of buyers to come into the market and absorb our housing supply. When interest rates fall, it can be less expensive to own than to rent across many entry-level price points.

And, if we look at “pending sales” figures you’ll notice that our demand has held steady at around 1,300 properties obtaining a contract each month for that last 4-months at the county level, and an average of 700 properties per month going into contract for the City of San Jose.

So, as long as rates continue to remain low, and new inventory continues to be absorbed by steady demand, I expect that we should have a well-balanced market through the end of the year, which will play well for move-up buyers and first-time homebuyers.

So how are these conditions affecting sales prices?

Have we seen a huge crash in home prices across Silicon Valley as some media outlets would suggest?

I hate to disappoint you but in fact, our median sales price for June is up 16% from the beginning of the year at $1,190,000 for Santa Clara County

Now, considering the spike in sales prices witnessed at the beginning of 2018, when prices shot up as much as 24% in some areas, we’re still down about 8% from these peak prices, but when you consider the longer-term trends our prices have consistently appreciated annually in the 9-10% range.

I may be going out on a limb, but I don’t think our prices are “crashing!,” especially when you consider that the current median Sales Price-to-List Price ratio is sitting around 102%, up 2% from January and holding steady. And provided median days to sell have also declined from January and are sitting at about 2-weeks or less. To me, these statistics still represent a very vibrant housing market across the Valley.

So, how will these conditions affect you if you’re thinking about making a move in real estate this year?

As you know, we’re on the front lines interacting with homebuyers and sellers on a daily basis. What we can share with you is that we’re beginning to see a shift in the way that buyers are approaching our market.

A large majority of the buyers we’ve recently met are getting into the market for the first time this year and haven’t been exposed to the past years of competitive multiple offers. So, as inventory levels have risen recently, these inexperienced buyers are becoming increasingly indecisive.

This is creating issues for sellers and opportunities for savvy buyers. Indecisive buyers mean that sellers need to be more strategic when selling their homes; they should take the time to properly prepare their home for sale, and make sure they price appropriately provided the increased competition they in their neighborhoods.

And for buyers, the influx of inexperienced buyers is making it easier for move-up buyers, or those with experience, to negotiate our market and recognize great values with little competition. And, we’re seeing a lot of great properties in the higher-end of the market selling at very reasonable prices quickly to homebuyers that have gained experience from the competitive markets of years past.

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VLOG: Top 4 Reasons to Buy a Home this Summer!

1. Prices Will Continue to Rise

CoreLogic’s latest U.S. Home Price Insights reports that home prices have appreciated by 3.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.8% over the next year.

Home values will continue to appreciate. Waiting may no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year fixed rate mortgage have started to level off around 4.3%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

Some renters have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Examine the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, greater safety for your family, or you just want to have control over renovations, now could be the time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.