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Housing Challenge or Housing Opportunity? It Depends.

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Housing Challenge or Housing Opportunity? It Depends. | MyKCM

The biggest challenge in real estate today is the lack of available homes for sale. The low housing supply has caused homes throughout the country to appreciate at a much faster rate than what we’ve experienced historically.

Housing Challenge or Housing Opportunity? It Depends. | MyKCM

There are many reasons for the limited number of homes on the market, but as you can see in the graph below, we’re well below where we’ve been for most of the past 10 years. Today, across the country, there is only a 2.4-month supply of homes available for sale.

The Opportunity 

This lack of homes for sale is creating a challenge for many buyers who are growing frustrated in their search. On the other hand, this is a huge opportunity for sellers as low supply is driving up home values. According to CoreLogic, the average home has appreciated by more than $50,000 over the past year. And for many homeowners, that’s opening new doors as they re-think their needs and use their equity to move up or downsize.

According to Dr. Frank Nothaft, Chief Economist at CoreLogic:

“The average homeowner with a mortgage has more than $200,000 in home equity as of mid-2021.”

Today, many sellers are taking advantage of low interest rates and the equity they have in their homes to make a move.

Bottom Line

The biggest challenge in real estate is the lack of homes for sale, but this challenge is also an opportunity for sellers. If you’re thinking about selling your house, let’s connect to start the process.

There Are More Homes Available Now than There Were This Spring

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There Are More Homes Available Now than There Were This Spring | MyKCM

There’s a lot of talk lately about how challenging it can be to find a home to buy. While housing inventory is still low, there are a few important things to understand about the supply of homes for sale as we move into the end of the year.

The Number of Homes for Sale Usually Peaks in the Fall

In the residential real estate market, trends generally follow a predictable and seasonal pattern. Typically, the number of homes available for sale (or active monthly listings) peaks in the fall. But in a chapter where so little feels normal, the question becomes: should we expect a fall peak this year?

There Are More Homes Available Now than There Were This Spring | MyKCM

If we look at the active monthly listings for 2021 (shown in the chart below), we’ll see that the number of homes on the market has increased fairly steadily since spring this year. The realtor.com data shows we’re still seeing an increase in active inventory month-over-month. While that gain is a bit smaller month-to-month (see August to September in the chart), September numbers are still up from the month prior.The important takeaway here is the latest monthly numbers show growth. At the end of September, buyers had more options to pick from than they did this spring. That’s encouraging for buyers who may have paused their search months ago because they had trouble finding a home. Danielle Hale, Chief Economist at realtor.com, sums this up nicely:

“Put simply, this September buyers had more options than they’ve had all year and while that’s typical of early fall, that’s not what happened in 2020. Still, it’s important to remember that while buyers may have an easier time this fall than they did in the spring, the market remains more competitive than it has been historically at this time of year.” 

As Hale says, a fall peak in inventory is in line with typical seasonal trends. While it’s impossible to say for certain what the future holds for housing inventory, we do know both buyers and sellers have opportunities this season based on the latest data.

What Does That Mean for You?

If you’re thinking of buying a home, rest assured you do have more options now than you did earlier this year – and that’s a welcome relief. That said, today’s market is still highly competitive. This isn’t the time to slow your search. It’s actually the season when the number of homes available for sale tends to peak. Focus on the additional options with renewed energy this season and be prepared for ongoing competition from other buyers.

If you’re considering selling your house, realize that while growing, inventory is still low. Selling now means you’ll be in a great position to negotiate with buyers – and competition among buyers is good news for your bottom line. Eager buyers will likely be motivated to act before the holidays, giving you the benefit of a fast sale.

Bottom Line

Whether you’re buying or selling, there’s still a chance to make your goals a reality this season. Let’s connect so we can discuss what’s going on with the local market and current trends and what they mean for you.

Refinancing Your Mortgage? Know These Key Terms Before You Sign Your Paperwork

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Refinancing Your Mortgage? Know These Key Terms Before You Sign Your PaperworkWhen it comes to your mortgage, there are a lot of key terms that are important for every homebuyer to know, and this is no less true than when it comes to refinancing your most important investment. Instead of leaving what’s unknown up to chance, it’s important to be aware of exactly what you’re looking at so you can get the best mortgage product available. If you’re currently considering refinancing and don’t want to get snared by unknown terminology, here are some terms you’ll need to watch out for.

Cash-Out Refinance

This type of refinance is a transaction where the home’s mortgage amount is higher than the existing mortgage amount, and cash-out refers to the extraction of equity from the homeowner’s home. While this type of refinancing can be a means of tapping into extra cash to help you with monthly expenses, it also means that the cash you take out of your equity will be added to the balance you already owe on your home.

Rate-and-Term Refinance

This type of mortgage transaction involves the refinancing of an existing mortgage so that you can take advantage of a different interest rate. While this type of change will not alter the amount of your home loan, it will adjust the interest which means that your monthly payments may be lowered and your may have a shorter amortization period due to overall reduced costs. These types of loans can often come with lower interest rates than cash-out refinances.

Streamline Refinancing

This type of refinancing is offered by the Federal Housing Administration (FHA) and the Department of Veterans Affairs, and it is also offered by certain financial institutions. While this type of refinancing has its own set of stipulations, it is directed at those who want to take advantage of low interest rates or get out of an adjustable rate mortgage (ARM). While you may need to have a financial appraisal done in order to qualify for this option, it’s also possible that this will not be required to qualify.

There are a lot of key terms that go along with having a mortgage and refinancing it, but if you’re considering your options it’s very important to know what all of them mean so you can be sure you’re making the best decision. If you’re currently considering refinancing your home and need helpful advice, contact your trusted mortgage professional for more information.

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