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Category: <span>Buying Myths</span>
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Understanding the Benefits of Owning Your First Home

Author:KCM Crew
Categories:Buying Myths,First Time Home Buyers,For Buyers,Interest Rates,Move-Up Buyers
Understanding the Benefits of Owning Your First Home Simplifying The Market

Are you considering buying your first home? If so, it can be helpful to know what led other people to make that decision. According to a recent survey of first-time homebuyers by PulteGroup:

“When asked why they purchased their first home recently, the answer was simple: because they wanted to. Either the desire to stop renting or recognition that homeownership is a smart financial investment was the main motivator for 72% of respondents.”

While that survey looked specifically at first-time homebuyers buying newly built homes, the same sentiment is true for just about anyone buying their first home. Here’s a bit more information to help you think about those two benefits of homeownership to see if they’re a key factor for you too.

When You Buy a Home, You Have More Stability than When You Rent

You might want to stop renting because rents keep going up. If you’re a renter, that means there’s a chance your payment will increase each time you sign a new rental agreement or renew your current one.

On the other hand, when you buy your home with a fixed-rate mortgage, your monthly housing payment is predictable over the length of that loan. This stability can give you a peace of mind that renting just can’t provide. Jeff Ostrowski, real estate journalist, breaks it down:

“With a fixed-rate mortgage, your monthly principal and interest payment is set for as long as you keep the loan. Sign a rental lease, however, and you could see your rent rise the following year, the year after that and so on.”

When You Buy a Home, You Grow Your Wealth as Home Values Climb

Beyond that, owning a home can also be a great long-term investment. While renting may be the more affordable option right now, it doesn’t provide an avenue for you to grow your wealth over time. Mark Fleming, Chief Economist at First American, explains that’s an important distinction to consider:

“Given current dynamics, more young households may choose to rent in the near term as the cost to own, excluding house price appreciation, has unequivocally increased. Yet, accounting for house price appreciation in that cost of homeownership, whether to rent or buy will depend on where, and if, a home is likely to cost more or less in the near future.”

Basically, renting doesn’t allow you to build equity. In contrast, homeownership can help you grow your net worth as your home’s value appreciates. That’s a significant perk you can’t get if you keep renting.

When you take that into account, it may make better financial sense to buy. Most experts project home prices will continue to appreciate over the next few years at a pace that’s more normal for the market. That means when you buy a home, not only are you investing in a place to live, but you’re also investing in your financial future. 

Bottom Line

If you're ready, it can be a smart move to buy your first home instead of renting. Connect with a real estate professional so you can stabilize your housing payment and start building wealth for your future.

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Unpacking the Long-Term Benefits of Homeownership

Author:KCM Crew
Categories:Buying Myths,First Time Home Buyers,For Buyers,Move-Up Buyers
Unpacking the Long-Term Benefits of Homeownership Simplifying The Market

If you’re thinking about buying a home soon, higher mortgage rates, rising home prices, and ongoing affordability concerns may make you wonder if it still makes sense to buy a home right now. While those market factors are important, there's more to consider. You should think about the long-term benefits of homeownership too.

Think about this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how home values grow with time and how, by extension, that grows your own wealth. That may be why, in a recent Fannie Mae survey, 76% of respondents say they believe buying a home is a safe investment.

Here’s a look at how just the home price appreciation piece can really add up over the years.

Home Price Growth over Time

The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends:


If you look at the percent change in home prices, you can see home prices grew on average by just over 57% nationwide over a five-year period.

Some regions are slightly above or below that average, but overall, home prices gained solid ground in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer (see map below):

The second map shows, nationwide, home prices appreciated by an average of over 297% over a roughly 30-year span.

This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost triple in value over that time. That’s a key factor in why so many homeowners who bought their homes years ago are still happy with their decision.

And while you may have heard talk throughout the year that home prices would crash, it hasn’t happened. In fact, experts project home prices will continue to rise for years to come. 

Bottom Line

If you’re wondering if it still makes sense to buy a home today, it's important to focus on the long-term advantages that come with homeownership. When you’re ready to start your homebuying journey, reach out to a local real estate professional.

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The Return of Normal Seasonality for Home Price Appreciation

Author:KCM Crew
Categories:Buying Myths,First Time Home Buyers,For Buyers,For Sellers,Housing Market Updates,Move-Up Buyers,Pricing,Selling Myths
The Return of Normal Seasonality for Home Price Appreciation Simplifying The Market

If you’re thinking of making a move, one of the biggest questions you have right now is probably: what’s happening with home prices? Despite what you may be hearing in the news, nationally, home prices aren’t falling. It’s just that price growth is beginning to normalize. Here’s the context you need to really understand that trend.

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand.

That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show typical monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

As the data shows, at the beginning of the year, home prices grow, but not as much as they do in the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, activity eases again. Price growth slows, but still typically appreciates.

After several unusual ‘unicorn’ years, today’s higher mortgage rates helped usher in the first signs of the return of seasonality. As Selma Hepp, Chief Economist at CoreLogic, explains:

“High mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.”

Why This Is So Important to Understand

In the coming months, you’re going to see the media talk more about home prices. In their coverage, you’ll likely see industry terms like these:

  • Appreciation: when prices increase.
  • Deceleration of appreciation: when prices continue to appreciate, but at a slower or more moderate pace.
  • Depreciation: when prices decrease.

Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear. The rapid pace of home price growth the market saw in recent years was unsustainable. It had to slow down at some point and that’s what we’re starting to see – deceleration of appreciation, not depreciation. 

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

While the headlines are generating fear and confusion on what’s happening with home prices, the truth is simple. Home price appreciation is returning to normal seasonality. If you have questions about what’s happening with prices in your local area, connect with a real estate professional.

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Beginning with Pre-Approval

Author:KCM Crew
Categories:Buying Myths,First Time Home Buyers,For Buyers,Move-Up Buyers
Beginning with Pre-Approval Simplifying The Market

If you’re looking to buy a home this fall, there are a few things you need to know. Affordability is tight with today’s mortgage rates and rising home prices. At the same time, there’s a limited number of homes on the market right now and that’s creating some competition among buyers. But, if you’re strategic, there are ways to navigate these waters. The first thing you’ll want to do is get pre-approved for a mortgage. That way you’ll know your numbers and can set yourself up for success from the start of your home search.

What Pre-Approval Does for You

To understand why it’s such an important step, you need to know what pre-approval is. As part of the homebuying process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you know how much money you can borrow. Freddie Mac explains it like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow. Why does this help you, especially today? With higher mortgage rates and home prices impacting affordability for many buyers right now, a solid understanding of your numbers is even more important so you can truly wrap your head around your options.

Pre-Approval Helps Show Sellers You’re a Serious Buyer

Let’s face it, there are more buyers looking to buy than there are homes available for sale and that imbalance is creating some competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you make an offer on a home. But getting pre-approved for a mortgage can help you stand out from other hopeful buyers.

As an article from Wall Street Journal (WSJ) says:

“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Pre-approval shows the seller you’re a serious buyer that’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or financial issues.

Bottom Line

Getting pre-approved is an important first step when you’re buying a home. The more prepared you are, the better chance you have of getting the home you want. Connect with a trusted lender so you have the tools you need to purchase a home in today’s market.

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How Remote Work Helps with Your House Hunt [INFOGRAPHIC]

Author:KCM Crew
Categories:Buying Myths,Demographics,First Time Home Buyers,For Buyers,Infographics,Move-Up Buyers
How Remote Work Helps with Your House Hunt [INFOGRAPHIC] Simplifying The Market

Some Highlights

  • While remote work peaked during the pandemic, many people still work from home today.
  • If you’re one of them, it could have an unexpected benefit when you’re looking to buy a home.
  • If you can work from home, you might have more choices for where to live. Connect with a real estate agent to talk about your options and what's most important to you.
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The Many Non-Financial Benefits of Homeownership

Author:KCM Crew
Categories:Buying Myths,Demographics,First Time Home Buyers,For Buyers
The Many Non-Financial Benefits of Homeownership Simplifying The Market

Buying and owning your own home can have a big impact on your life. While there are financial reasons to become a homeowner, it's essential to think about the non-financial benefits that make a home more than just a place to live.

Here are some of the top non-financial reasons to buy a home.

According to Fannie Mae, 94% of survey respondents say “Having Control Over What You Do with Your Living Space” is a top reason to own.

Your home is truly your own space. If you own a home, unless there are specific homeowner association requirements, you can decorate and change it the way you like. That means you can make small changes or even do big renovations to make your home perfect for you. Your home is uniquely yours and by buying, you give yourself the freedom to tailor it to your individual style. Investopedia explains:

“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.”

When you rent, you might not be able to make your place really feel like it’s yours. And if you do make any modifications, you might have to change them back before you leave. But if you own your home, you can make it just the way you want it. That level of customization can give you a sense of pride in where you live and make you feel more connected to it.

Fannie Mae also finds 90% say “Having a Good Place for Your Family To Raise Your Children” tops their list of why it’s better to buy a home.

Another important factor to think about is what stage of life you’re in. U.S. News breaks it down:

“For those with young children, buying a home and putting down roots is a major driver. . . . You don’t want the upheaval of a massive rent increase or a non-renewed lease to impact your sense of stability.”

No matter which of life’s milestones you’re in, stability and predictability are important. That’s because the one constant in life is that things will change. And, as life changes around you, having a familiar home and not worrying about moving regularly helps you and those who matter most feel more secure and more comfortable.

Lastly, Fannie Mae says 82% list “Feeling Engaged in Your Community” as another key motivator to own.

Owning your home also helps you feel even more connected to your neighborhood. People who own homes usually live in them for an average of nine years, according to the National Association of Realtors (NAR). As that time passes, it’s natural to make friends and build strong ties in the community. As Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), points out:

“Homeowners also tend to be more active in their local communities . . .”

When you care deeply about the people you live near, you’ll do what you can to contribute to your local area.

Bottom Line

Owning your home can make your life better by giving you a sense of accomplishment, pride, stability, and connectedness. If you're thinking about becoming a homeowner and want to learn more, reach out to a local real estate agent today.

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Remote Work Is Changing How Some Buyers Search for Their Dream Homes

Author:KCM Crew
Categories:Buying Myths,First Time Home Buyers,For Buyers
Remote Work Is Changing How Some Buyers Search for Their Dream Homes Simplifying The Market

The way Americans work has changed in recent years, and remote work is at the forefront of this shift. Experts say it’ll continue to be popular for years to come and project that 36.2 million Americans will be working remotely by 2025. To give you some perspective, that's a 417% increase compared to the pre-pandemic years when there were just 7 million remote workers.

If you’re in the market to buy a home and you work remotely either full or part-time, this trend is a game-changer. It can help you overcome some of today’s affordability and housing inventory challenges.

How Remote Work Helps with Affordability

Remote or hybrid work allows you to change how you approach your home search. Since you’re no longer commuting every day, you may not feel it’s as essential to live near your office. If you’re willing to move a bit further out in the suburbs instead of the city, you could open up your pool of affordable options. In a recent study, Fannie Mae explains:

“Home affordability may also be a reason why we saw an increase in remote workers’ willingness to relocate or live farther away from their workplace . . .”

If you're thinking about moving, having this kind of location flexibility can boost your chances of finding a home that fits your budget. Work with your agent to cast a wider net that includes additional areas with a lower cost of living.

More Work Flexibility Means More Home Options

And as you broaden your search to include more affordable options, you may also find you have the chance to get more features for your money too. Given the low supply of homes for sale, finding a home that fits all your wants and needs can be challenging.

By opening up your search, you’ll give yourself a bigger pool of options to choose from, and that makes it easier to find a home that truly fits your lifestyle. This could include homes with more square footage, diverse home styles, and a wider range of neighborhood amenities that were previously out of reach.

Historically, living close to work was a sought-after perk, often coming with a hefty price tag. But now, the dynamics have changed. If you work from home, you have the freedom to choose where you want to live without the burden of long daily commutes. This shift allows you to focus more on finding a home that is affordable and delivers on your dream home features.

Bottom Line

Remote work goes beyond job flexibility. It's a chance to broaden your horizons in your home search. Without being bound to a fixed location, you have the freedom to explore all your options. Reach out to a local real estate agent to find out how this freedom can lead you to your ideal home.

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Should Baby Boomers Buy or Rent After Selling Their Houses?

Author:KCM Crew
Categories:Baby Boomers,Buying Myths,Demographics,For Buyers,Rent vs. Buy
Should Baby Boomers Buy or Rent After Selling Their Houses? Simplifying The Market

Are you a baby boomer who’s lived in your current house for a long time and you’re ready for a change? If you’re thinking about selling your house, you have a lot to consider. Will you move to a different state or stay nearby? Is it time to downsize or do you want more space to accommodate your loved ones? But maybe the biggest consideration boils down to this – will you buy your next home or choose to rent instead?

That decision ultimately depends on your current situation and your future plans. Here are two important factors to help you decide what’s right for you.

Expect Rents to Keep Going Up

The graph below uses data from the Census to show how rents have been climbing steadily since 1988:Rents have been going up consistently over the long run. If you choose to rent, there’s a risk your rental payment will go up each time you renew your lease. Having a higher rental expense may not be something you want to deal with every year.

When you buy a home with a fixed-rate mortgage, it helps stabilize your monthly housing payment. This allows you to lock in your monthly payment for the duration of your home loan. That keeps your payments steady and predictable for the long haul. Freddie Mac sums it up like this:

“. . . homeowners with fixed-rate loans will see little to no change to their monthly housing cost over the life of their loan. You can be confident in knowing that your mortgage payments won’t change much in the long term, even when life’s other costs do.”

Owning Your Home Comes with Unique Benefits

According to AARP, buying your next home is a better long-term strategy than renting:

“Though each option has pros and cons, buying provides more pros, with a broader range of benefits.”

To help you choose what you’ll do after you sell, here are just a few of the benefits of homeownership that article covers:

  • Owning your home can help you save money for the future. Your home, and the equity you build as a homeowner, can provide generational wealth that could be passed on to loved ones, giving them a better life.
  • You might not have to pay a monthly mortgage payment at all. If you have enough equity to buy your next home outright, you wouldn’t have a monthly mortgage payment. While you might still need to cover property taxes or maintenance fees, not having to worry about a monthly mortgage payment could be a big relief.
  • Aging in place can be simpler. If your needs change, owning your home gives you the freedom to make renovations and updates that can make everyday life easier.

Bottom Line

If you're a baby boomer who’s wondering whether you should buy or rent your next home, talk to a reliable real estate agent for advice. With rents going up and homeownership providing so many benefits, it may make sense to consider buying your next home.

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What Experts Project for Home Prices Over the Next 5 Years

Author:KCM Crew
Categories:Buying Myths,First Time Home Buyers,For Buyers,Housing Market Updates,Move-Up Buyers
What Experts Project for Home Prices Over the Next 5 Years Simplifying The Market

If you're planning to buy a home, one thing to consider is what experts project home prices will do in the future and how that might affect your investment. While you may have seen negative news over the past year about home prices, they’re doing far better than expected and are rising across the country. And data shows, experts forecast home prices will keep appreciating.

Experts Project Ongoing Appreciation

Pulsenomics polled over 100 economists, investment strategists, and housing market analysts in the latest quarterly Home Price Expectation Survey (HPES). The results show what the panelists project will happen with home prices over the next five years. Here are those expert forecasts saying home prices will go up every year through 2027 (see graph below):If you’re someone who was worried home prices would fall because of stories you’ve read online, here's the big takeaway. Even though home prices vary by local market, experts project prices will continue to rise across the country for years to come. And these numbers indicate the return to more normal home price appreciation.

And while the projected increase in 2024 isn’t as large as 2023, it’s important to recognize home price appreciation is cumulative. In other words, if these experts are correct, after your home’s value rises by 3.32% this year, it’ll appreciate by another 2.17% next year. This is a good example of why owning a home is a choice that wins big over time.

What Does This Mean for You?

Once you buy a home, price appreciation raises your home’s value, and that grows your household wealth. To see how a typical home's value could change in the next few years using the expert projections from the HPES, check out the graph below:In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

So, if you're thinking about whether buying a home is a good choice, remember how it can be a powerful way to grow your wealth in the long run. 

Bottom Line

According to the experts, home prices are expected to grow over the next five years at a more normal pace. If you’re ready to become a homeowner, know that buying today can set you up for long-term success as home values (and your own net worth) grow. Connect with a local real estate agent to start the homebuying process today.

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Get Ready for Smaller, More Affordable Homes

Author:KCM Crew
Categories:Buying Myths,First Time Home Buyers,For Buyers,Housing Market Updates
Get Ready for Smaller, More Affordable Homes Simplifying The Market

Have you been trying to buy a home, but higher mortgage rates and home prices are limiting your options? If so, here’s some good news – based on what Ali Wolf, Chief Economist at Zonda, has to say – smaller, more affordable homes are on the way:

“Buyers should expect that over the next 12 to 24 months there will be a notable increase in the number of entry-level homes available.”

In some ways, smaller homes are already here. When the pandemic hit, the meaning of home changed. People needed the space their home provided not only as a place to live, but as a place to work, go to school, exercise, and more. Those who had that space were more likely to keep it. And those that didn’t were in a position where they were trying to sell their smaller house to move up to a larger one. That meant the homes coming to the market during the pandemic were smaller than those on the market before the pandemic – and that trend continues today (see graph below):This graph also shows how the size of homes on the market changes seasonally. Larger homes tend to come on the market during the summer months when households with children who are out of school are looking to move.

That seasonality means, based on historical trends and the fact that fall is now approaching, we can expect smaller, more affordable homes to come to the market throughout the rest of the year.

That’s great news because, as Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), states, the need for these types of homes has gone up recently:

“. . . as interest rates increased in 2022, and housing affordability worsened, the demand for home size has trended lower.”

What Does This Mean for You?

The seasonal trend of smaller homes coming to the market in the later months of the year, coupled with builders bringing smaller, more affordable newly built homes to the market right now, is good news – especially if you’re finding it difficult to afford a home. Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says this about a potential increase in the availability of smaller homes:

“It’s not solving the affordability crisis, but it is creating opportunities for people to be able to afford an entry-level home in an area.”

Bottom Line

 If a smaller, more affordable home sounds appealing to you, good news – they’re coming. To keep up with what’s available in your area, connect with a local real estate agent.

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