Two Questions For Every Homebuyer

Two Questions Every Homebuyer Should Ask Themselves Right Now | MyKCM

Rising interest rates have begun to slow an overheated housing market as monthly mortgage payments have risen dramatically since the beginning of the year. This is leaving some people who want to purchase a home priced out of the market and others wondering if now is the time to buy one. But this rise in borrowing cost shows no signs of letting up soon.

Economic uncertainty and the volatility of the financial markets are causing mortgage rates to rise. George Ratiu, Senior Economist and Manager of Economic Research at realtor.comsays this:

“While even two months ago rates above 7% may have seemed unthinkable, at the current pace, we can expect rates to surpass that level in the next three months.”

So, is now the right time to buy a home? Anyone thinking about buying a home today should ask themselves two questions:

1. Where Do I Think Home Prices Are Heading?

There are two places to turn to answer this question. First is the consensus of what experts are saying. If you look at what experts are projecting for home prices in 2023, they’re forecasting home price appreciation around 2%. While it’s true some are calling for depreciation, most are calling for appreciation in home values over the next year.

The second spot to turn to for information is the Home Price Expectation Survey from Pulsenomics – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists. According to the latest release, the experts surveyed are also calling for home price appreciation for the next several years (see graph below):

Two Questions Every Homebuyer Should Ask Themselves Right Now | MyKCM

2. Where Do I Think Interest Rates Are Heading?

Like mentioned above, Ratiu sees mortgage rates rising over the next several months. Another expert agrees. Mark Fleming, Chief Economist at First Americansays:

“While mortgage rates are expected to continue to drift higher over the coming months, much of the rapid increase in rates is likely behind us.” 

The instability in the world and higher inflation are driving this volatile market, resulting in higher borrowing rates for those looking to buy homes.

Bottom Line

If you’re thinking about buying a home, asking yourself about home prices and mortgage rates will help you make a powerful and confident decision. Experts see both prices and rates rising in the future. The alternative is to rent, but rents are also increasing. That may mean buying a home makes more sense than renting.

If You’re Thinking of Selling Your House This Fall, Hire a Full-Time Pro

These Are Tumultuous Times

If You’re Thinking of Selling Your House This Fall, Hire a Pro | MyKCM

Today’s market is at a turning point, making it more essential than ever to work with a real estate professional. Not only will a trusted real estate advisor keep you updated and help you make the best decisions based on current market trends, but they’re also experts in managing the many aspects of selling your house.

Here are five key reasons why working with a real estate professional makes sense today.

1. A Full Time Professional Follows the Latest Market Trends

With higher mortgage rates and moderating buyer demand, conditions are changing and staying on top of the latest market information is crucial when you sell.

Working with an expert real estate advisor helps ensure you can stay updated on what’s happening. They know your local area and follow national trends too. More importantly, they’ll know what this data means for you, and as the market shifts, they’ll be able to help you navigate it and make your best decision.

2. A Professional Helps Maximize Your Pool of Buyers

Your agent’s role in bringing in buyers is important. Real estate professionals have a large variety of tools at their disposal, such as social media followers, agency resources, and the Multiple Listing Service (MLS) to ensure your house is viewed by the most buyers. Investopedia explains why it’s risky to sell on your own without the network an agent provides:

“You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home. A smaller pool of potential buyers means less demand for your property, which can translate into waiting longer to sell your home and possibly not getting as much money as your house is worth.”

3. A Professional Understands the Fine Print

Today, more disclosures and regulations are mandatory when selling a house. That means the number of legal documents you’ll need to juggle is growing. The National Association of Realtors (NAR) explains it best, saying:

“Selling a home typically requires a variety of forms, reports, disclosures, and other legal and financial documents. . . . Also, there’s a lot of jargon involved in a real estate transaction; you want to work with a professional who can speak the language.”

A real estate professional knows exactly what needs to happen, what all the fine print means, and how to work through it efficiently. They’ll help you review the documents and avoid any costly missteps that could occur if you try to handle them on your own.

4. A Professional Is a Trained Negotiator

If you sell without a professional, you’ll also be solely responsible for all the negotiations. That means you’ll have to coordinate with:

  • The buyer, who wants the best deal possible
  • The buyer’s agent, who will use their expertise to advocate for the buyer
  • The inspection company, which works for the buyer and will almost always find concerns with the house
  • The appraiser, who assesses the property’s value to protect the lender

In today’s changing market, buyers are regaining some negotiation power as bidding wars ease. Instead of going toe-to-toe with all the above parties alone, lean on an expert. They’ll know what levers to pull, how to address everyone’s concerns, and when you may want to get a second opinion.

5. A Professional Knows How To Set the Right Price for Your House

If you sell your house on your own, you may be more likely to overshoot your asking price. That could mean your house will sit on the market because you priced it too high for where the market is now. Today, pricing a house requires even more expertise to ensure you get it right. NAR explains it like this:

“A great real estate agent will look at your home with an unbiased eye, providing you with the information you need to enhance marketability and maximize price.”

Real estate professionals know the ins and outs of how to price your house accurately and competitively. To do so, they compare your house to recently sold homes in your area and factor in the current condition of your home. These steps are key to making sure it’s set to move quickly while still getting you the highest possible final sale price.

Bottom Line

Whether it’s following local and national trends and guiding you through a shifting market or pricing your house right, a full time real estate agent has essential insights you’ll want to rely on throughout the transaction. Don’t go at it alone.  If you plan to sell your house, let’s connect.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble?

The Answer Is In The Data

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

The talk of a housing bubble in the coming year seems to be at a fever pitch as rising mortgage rates continue to slow down an overheated real estate market. Over the past two years, home prices have appreciated at an unsustainable pace causing many to ask: are things just slowing down, or is a crash coming?

To answer this question, there are two things we want to understand. The first is the reality of the shift in today’s housing market. And the second is what experts are saying about home prices in the coming year.

The Reality of the Shift in Today’s Housing Market

The reality is we’re seeing an inflection point in housing supply and demand. According to realtor.com, active listings have increased more than 26% over last year, while showings from the latest ShowingTime Showing Index have decreased almost 17% from last year (see graph below). This is an inflection point for housing because, over the past two years, we’ve seen a massive amount of demand (showings) and not enough homes available for sale for the number of people that wanted to buy. That caused the market frenzy.

Today, supply and demand look very different, and the market is slowing down from the pace we’ve seen. This offers proof of the sudden slowdown so many people are feeling.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

What Experts Are Saying About Home Prices in the Coming Year

Right now, most experts are forecasting home price appreciation in 2023, but at a much slower pace than the last two years. The average of the six forecasters below is for national home prices to appreciate by 2.5% in the coming year. Only one of the six is calling for home price depreciation.

Is the Real Estate Market Slowing Down, or Is This a Housing Bubble? | MyKCM

When we look at the shift taking place along with what experts are saying, we can conclude the national real estate market is slowing down but is not a bubble getting ready to burst. This isn’t to say that a few overheated markets won’t experience home price depreciation, but there isn’t a case to be made for a national housing bubble.

Bottom Line

The real estate market is slowing down, and that’s causing many to fear we’re in a housing bubble. What we’ve experienced in the housing market over the past two years were historic levels of demand and constrained supply. That led to homes going up in value at a record pace. While some overheated markets may experience price depreciation in the short term, according to experts, the national real estate market will appreciate in the coming year.

Why It’s Still a Sellers’ Market

Why It’s Still a Sellers’ Market | MyKCM

As there’s more and more talk about the real estate market cooling off from the peak frenzy it saw during the pandemic, you may be questioning what that means for your plans to sell your house. If you’re thinking of making a move, you should know the market is still anything but normal.

Even though the supply of homes for sale has been growing this year, there’s still a shortage of homes on the market. And that means conditions continue to favor sellers today. That’s because the level of inventory of homes for sale can help determine if buyers or sellers are in the driver’s seat. Think of it like this:

  • buyers’ market is when there are more homes for sale than buyers looking to buy. When that happens, buyers have the negotiation power because sellers are more willing to compromise so they can sell their house.
  • In a sellers’ market, it’s just the opposite. There are too few homes available for the number of buyers in the market and that gives the seller all the leverage. In that situation, buyers will do what they can to compete for the limited number of homes for sale.
  • neutral market is when supply is balanced and there are enough homes to meet buyer demand at the current sales pace.

And for the past two years, we’ve been in a red-hot sellers’ market because inventory has been near record lows. The blue section of this graph highlights just how far below a neutral market inventory still is today.

Why It’s Still a Sellers’ Market | MyKCM

What Does This Mean for You?

Ed Pinto, Director of the American Enterprise Institute’s Housing Center, gives a perfect summary of what’s happening in today’s market, saying:

“Overall, the best summary is that we’ll move from a gangbuster sellers’ market to a modest sellers’ market.”

Conditions are still in your favor even though the market is cooling. If you work with an agent to price your house at market value, you’ll find success when you sell your house today. While buyer demand is softening due to higher mortgage rates, homes that are priced right are still selling fast. That means your window of opportunity to list your house hasn’t closed.

Bottom Line

Today’s housing market still favors sellers. If you’re ready to sell your house, let’s connect so you can start making your moves.

Home Ownership – A Great Hedge Against The Impact Of Rising Inflation

If you’re following along with the news today, you’ve heard about rising inflation. Today, inflation is at a 40-year high. According to the National Association of Home Builders (NAHB):

“Consumer prices accelerated again in May as shelter, energy and food prices continued to surge at the fastest pace in decades. This marked the third straight month for inflation above an 8% rate and was the largest year-over-year gain since December 1981.”

With inflation rising, you’re likely feeling it impact your day-to-day life as prices go up for gas, groceries, and more. These climbing consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.

If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.

Homeownership Helps You Stabilize One of Your Biggest Monthly Expenses

Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.

Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. When you have a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankratesays:

A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same. That’s certainly not the case if you’re renting.”

So even if other prices increase, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.

Investing in an Asset That Historically Outperforms Inflation

While it’s true rising home prices and higher mortgage rates mean that buying a house today costs more than it did even a few months ago, you still have an opportunity to set yourself up for a long-term win. That’s because, in inflationary times, you want to be invested in an asset that outperforms inflation and typically holds or grows in value.

The graph below shows how the average home price appreciation outperformed the average inflation rate in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):

Homeownership Is a Great Hedge Against the Impact of Rising Inflation | MyKCM

So, what does that mean for you? Today, experts forecast home prices will only go up from here thanks to the ongoing imbalance of supply and demand. Once you buy a house, any home price appreciation that does occur will grow your equity and your net worth. And since homes are typically assets that grow in value, you have peace of mind that history shows your investment is a strong one.

That means, if you’re ready and able, it makes sense to buy today before prices rise further.

Bottom Line

If you’ve been thinking about buying a home this year, it makes sense to act soon, even with inflation rising. That way you can stabilize your monthly housing cost and invest in an asset that historically outperforms inflation. If you’re ready to get started, let’s connect so you have expert advice on your specific situation when you’re ready to buy a home.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.Search

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We believe every family should feel confident when buying and selling a home.

More Americans Choose Real Estate as the Best Investment Than Ever Before

More Americans Choose Real Estate as the Best Investment Than Ever Before | MyKCM

Americans’ opinion on the value of real estate as an investment is climbing. That’s according to an annual survey from Gallup. Not only is real estate viewed as the best investment for the ninth year in a row, but more Americans selected it than ever before.

The graph below shows the results of the survey since Gallup began asking the question in 2011. As the trend lines indicate, real estate has been gaining ground as the clear favorite for almost a decade now:

More Americans Choose Real Estate as the Best Investment Than Ever Before | MyKCM

If you’re thinking about purchasing a home, let this poll reassure you. Even when inflation is high like today, Americans recognize owning a home is a powerful financial decision.

How an Investment in Real Estate Can Benefit You During High Inflation
Because inflation reached its highest level in 40 years recently, it’s more important than ever to understand the financial benefits of homeownership. Rising inflation means prices are increasing across the board, and that includes goods, services, housing costs, and more. When you purchase your home, you lock in your monthly housing payments, effectively shielding yourself from increases on one of your biggest budgetary items each month.

If you’re a renter, you don’t have that same benefit, and you aren’t protected from these increases, especially as rents rise. As Danielle Hale, Chief Economist at realtor.com, notes:

“Rising rents, which continue to climb at double-digit pace . . . and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.”

When Inflation Has Risen in the Past, Home Prices Have Too
Your house is also an asset that typically increases in value over time, even during inflation. That‘s because as prices rise, the value of your home does too. Mark Cussen, Financial Writer for Investopedia, puts it like this:

“There are many advantages to investing in real estate. . . . It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values. . . .”

And since rising home values help increase your equity, and by extension your net worth, homeownership is historically a good hedge against inflation.

Bottom Line
Buying a home is a powerful decision. It’s no wonder why so many people view it as the best long-term investment, even when inflation is high. When you buy, you help shield yourself from increases in your housing costs and you own an asset that typically gains value with time. If you want to better understand how buying a home could be a great investment for you, let’s connect today.

How Supply and Demand Can Impact Your Buying and Selling Goals

You already know it’s a good time to sell…but it’s also a good time to buy if you do it right.

How Supply and Demand Can Impact Your Buying and Selling Goals | MyKCM

In today’s housing market, there are far more buyers looking for homes than sellers listing their houses. Based on the concept of supply and demand, this means home prices will naturally rise. Why is that? When there are more people trying to buy an item than there are making that item available for sale, that drives prices up. And that’s exactly the case in today’s housing market. So, knowing what’s happening with the inventory of homes for sale and the demand for housing is crucial for today’s buyers and sellers.

Nationally, Demand Is High and Supply Is Very Low

The latest buyer and seller activity data from the National Association of Realtors (NAR) indicates buyer traffic heavily outweighs seller traffic today, as shown in the maps below. There are far darker blues (strong buyer activity) on the left and much lighter blues (weak seller activity) on the right. In other words, this shows how the demand for homes is significantly greater than what’s available to purchase.

How Supply and Demand Can Impact Your Buying and Selling Goals | MyKCM

What Does This Mean if You’re a Seller?

Supply is struggling to keep pace with demand. In fact, the inventory of homes for sale recently hit an all-time low. That gives you an incredible advantage when you sell your house. With so few listings, it’s likely more potential buyers will view your house – especially if you work with an agent to price it right. That means there’s a high chance you’ll receive multiple offers or buyers will enter a bidding war for your house. And that dynamic can drive the sale price of your home up.

What Does This Mean if You’re a Buyer?

As a buyer with fewer options available, you’re likely to see more competition, so you need to be strategic to win. First, make sure you have a trusted professional on your side. Your real estate agent will help you understand your local market and work with you to act quickly when the time is right. Even when it’s challenging to find a home, you can still succeed as a buyer today if you have a trusted advisor on your side every step of the way.

Bottom Line

Whether you’re a homebuyer, seller, or both, knowledge truly is power. Let’s connect today so you can better understand what’s happening in our local market and achieve your homebuying and selling goals this year.

Is NOW A Good Time To Sell My Home??

There are lots of headlines, and posts on social media trying to “scare” people about the real estate market.

But remember this, Real Estate has been vote “The Best Investment” EIGHT Years in a row.

The reasons are simple supply and demand. There are more buyers than sellers. In fact, our housing supply is 5.2 million units short of demand. Think about that. It could take ten years for supply to match demand.

How do we know that demand is sustainable? As can be seen in the image from the Pew Research Center, US birth rates in the 1970’s through 2010, have been largely flat. So the US demand for housing should remain strong.
Also bear in mind that rental rates have been increasing as much as 19%/year in many areas. With mortgage interest rates at or below HALF of the historic average for a 30 year fixed rate mortgage (8%,) many Renters may make the decision too pay their own mortgage, and not their Landlord’s mortgage.

“But, is now a good time to sell MY house?”


Before COVID, if you sold your house and purchased another house, assuming only an annual rate of 10% equity accumulation, you would now have over 20% additional equity in the home you bought two years ago.

We may not continue that rate of equity accumulation, but it does provide legitimate evidence that now is a good time to sell AND a good time to buy a home.

Call or text 401-232-4300 for answers to your real estate questions.

The American Dream Isn’t Always Easy…

The Path To Homeownership Can Be Steeper for Some Americans

The Path To Homeownership Can Be Steeper for Some Americans | MyKCM

As we celebrate Black History Month, we honor and recognize the past and present experiences of Black Americans. A significant part of this experience is investing in a home of their own. While equitable access to housing has come a long way, the path to homeownership is still steeper for households of color. It’s an important experience to talk about, along with how working with the right real estate experts can make all the difference for diverse homebuyers.

We know it’s a more challenging journey to achieve homeownership for some because there’s still a measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, the lowest homeownership rate persists in the Black community (see graph below):

The Path To Homeownership Can Be Steeper for Some Americans | MyKCM

Homeownership is an essential piece for building household wealth that can be passed down to future generations. However, there are obstacles in the homebuying process that can negatively impact certain racial and ethnic groups, including the Black community. This can delay or prevent many from achieving homeownership, challenging their ability to grow their net worth. A report by Vanessa G. Perry of the George Washington University School of Business and Janneke Ratcliffe of the Urban Institute explains:

“. . . households of color have much lower homeownership rates than white households and consequently hold, at the median, just one-eighth the wealth of white households.”

On top of that, when Black households do become homeowners, research shows they pay more for those homes overall than the average household. Raheem Hanifa, a Research Analyst for the Joint Center for Housing Studies of Harvard Universitytells us:

“Black homeowners not only have primary mortgages with higher interest rates than white homeowners with similar incomes, they also have higher interest rates than white homeowners with substantially lower incomes, . . . Black homeowners have experienced systemic barriers to homeownership and wealth-building opportunities that have limited their ability to access credit, which is a key component in receiving low mortgage interest rates.”

For Black homebuyers, the inequity that remains in housing can be a point of pain and frustration. That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process. These professionals aren’t only experienced advisors who understand the market and give the best advice. They’re also compassionate allies who will advocate for your best interests every step of the way.

Bottom Line

Opportunities in real estate improve every day, but there are still equity challenges that many face. Let’s connect to make sure you have an advocate on your side as you walk the path to homeownership.

The Next Generation of Homebuyers Is Here

Gen Z Is In The House

The Next Generation of Homebuyers Is Here | MyKCM

Many members of Generation Z (Gen Z) are aging into adulthood and deciding whether to rent or buy a home. If you find yourself in this group, it’s important to understand you’re never too young to start thinking about homeownership. The sooner you start planning, the sooner you can move on from renting.

As you set off on your journey and plan your next move, here are a few reasons to think about homebuying this year.

The Reasons Gen Z Want To Become Homeowners

While the majority of Gen Z haven’t entered the housing market yet, a large portion plan to according to a realtor.com report. The report found that 72% of Gen Z would rather purchase a home than rent long-term. As George Ratiu, Manager of Economic Research for realtor.com, says:

“With nearly three-quarters of those surveyed preferring to buy versus renting long-term, the housing industry should be prepared for millions of Gen Z buyers to bring a new wave of demand along a similar stage-of-life timeline as the millennial generation before them.”

But why do so many members of Gen Z value homeownership? According to the latest Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), young homebuyers – more than any other age group – want to become homeowners because they want to have a place of their very own.

That may be because one of the biggest benefits of homeownership is having a place that you can truly make your own by customizing it to your style and personality. Whether that’s the décor, painting, or renovations, when you own your home, you don’t have to limit yourself to what your lease and landlord will allow.

Not to mention, owning a home provides much greater long-term stability and security than renting. When you own a home, there’s also protection from steadily rising rental costs because your monthly mortgage payment is locked in for the length of your loan (typically 15 to 30 years).

Work with a Real Estate Professional To Achieve Your Goals

Whether you’re just getting started on your homebuying journey, you want to learn more about the process, or you’re fully committed to buying your first home this year, it’s especially important to connect with a trusted real estate advisor soon, as you won’t be the only first-time buyer in the market. According to a recent survey from realtor.coma majority of first-time buyers surveyed are looking to purchase a home in 2022. As the survey notes:

“First-time home buyers retain their optimism despite a challenging housing market in the past year. Hoping to achieve their goal of homeownership and provide a comfortable space for their families, young buyers are setting out to learn what they can about the market and setting their list of priorities for their home purchase.”

That means you’ll likely face strong competition from other first-time buyers. One way to get a leg-up on that competition is to work with a real estate professional to make sure you have the support you need to make an informed and confident decision.

Bottom Line

If you’re planning your next move, you’re not alone. Just know it’s never too early to consider the benefits of homeownership over renting. To learn more, let’s connect today so you have a trusted professional on your side to help you explore your options.