Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Jan. 24, 2023

Think Twice Before Waiting for 3% Mortgage Rates

Think Twice Before Waiting for 3% Mortgage Rates

Think Twice Before Waiting for 3% Mortgage Rates | MyKCM

Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.

Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Macshares:

“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”

That’s potentially great news if you’re a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.

While this opens up a window of opportunity for you, remember: you shouldn’t expect rates to drop back down to record lows like we saw in 2021. Experts agree that’s not the range buyers should bank on. Greg McBride, Chief Financial Analyst at Bankrateexplains:

“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.

It’s important to have a realistic vision for what you can expect this year, and that’s where the advice of expert real estate advisors is critical. You may be surprised by the impact even a mild drop in mortgage rates has on your budget. If you’re ready to buy a home now, today’s market presents the opportunity to get a more affordable mortgage rate, find your dream home, and face less competition from other buyers.

Bottom Line

The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. Work with a local lender to learn how today’s rates impact your goals, and let’s connect to explore your options in our area.

 

Posted in Market Updates
Jan. 17, 2023

The Truth About Negative Home Equity Headlines

The Truth About Negative Home Equity Headlines

The Truth About Negative Home Equity Headlines | MyKCM

Home equity has been a hot topic in real estate news lately. And if you’ve been following along, you may have heard there’s a growing number of homeowners with negative equityBut don’t let those headlines scare you.

In truth, the headlines don’t give you all the information you really need to understand what’s happening and at what scale. Let’s break down one of the big equity stories you may be seeing in the news, and what’s actually taking place. That way, you’ll have the context you need to understand the big picture.

Headlines Focus on Short-Term Equity Numbers and Fail To Convey the Long-Term View

One piece of news circulating focuses on the percentage of homes purchased in 2022 that are currently underwater. The term underwater refers to a scenario where the homeowner owes more on the loan than the house is worth. This was a huge issue when the housing market crashed in 2008, but it's much less significant today.

Media coverage right now is based loosely on a report from Black Knight, Inc. The actual report from that source says this:

Of all homes purchased with a mortgage in 2022, 8% are now at least marginally underwater and nearly 40% have less than 10% equity stakes in their home, . . .”

Let’s unpack that for a moment and provide the bigger picture. The data-bound report from Black Knight is talking specifically about homes purchased in 2022, but media headlines don’t always mention that timeframe or provide the surrounding context about how unusual of a year 2022 was for the housing market. In 2022, home price appreciation soared, and it reached its max around March-April. Since then, the rate of appreciation has been slowing down.

Homeowners who bought their house last year right at the peak or those who paid more than market value in the months that followed are more likely to fall into the category of being marginally underwater. The qualifier marginally is another key piece of the puzzle the media isn’t necessarily including in their coverage.

So, what does that mean for those who purchased a home in 2022? It’s important to remember, owning a home is a long-term investment, not a short-term play. When headlines focus on the short-term view, they’re not necessarily providing the full context.

Typically speaking, the longer you stay in your home, the more equity you gain as you pay down your loan and as home prices appreciate. With recent market conditions, you may not have gained significant equity right away if you owned the home for just a few months. But it’s also true that many homeowners who recently bought their house are unlikely to be looking to sell quite yet.

Bottom Line

As with everything, knowing the context is important. If you have questions about real estate headlines or about how much equity you have in your home, let’s connect.

Posted in Market Updates
Jan. 10, 2023

What Experts Are Saying About the 2023 Housing Market

What Experts Are Saying About the 2023 Housing Market

What Experts Are Saying About the 2023 Housing Market | MyKCM

If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market this year. In 2022, the market underwent a major shift as economic uncertainty and higher mortgage rates reduced buyer demand, slowed the pace of home sales, and moderated home prices. But what about 2023?

An article from HousingWire offers this perspective:

“The red-hot housing market of the past 2 ½ years was characterized by sub-three percent mortgage rates, fast-paced bidding wars and record-low inventory. But more recently, market conditions have done an about-face. . . . now is the opportunity for everyone to become re-educated about what a ‘typical’ housing market looks like.”

This year, experts agree we may see the return of greater stability and predictability in the housing market if inflation continues to ease and mortgage rates stabilize. Here’s what they have to say.

The 2023 forecast from the National Association of Realtors (NAR) says:

While 2022 may be remembered as a year of housing volatility, 2023 likely will become a year of long-lost normalcy returning to the market, . . . mortgage rates are expected to stabilize while home sales and prices moderate after recent highs, . . .”

Danielle Hale, Chief Economist at realtor.comadds:

“. . . buyers will not face the extreme competition that was commonplace over the past few years.”

Lawrence Yun, Chief Economist at NAR, explains home prices will vary by local area, but will net neutral nationwide as the market continues to adjust:

After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

Mark Fleming, Chief Economist at First American, says:

“The housing market, once adjusted to the new normal of higher mortgage rates, will benefit from continued strong demographic-driven demand relative to an overall, long-run shortage of supply.” 

Bottom Line

If you’re looking to buy or sell a home this year, the best way to ensure you’re up to date on the latest market insights is to partner with a trusted real estate advisor. Let’s connect.

 

Posted in Market Updates
Jan. 3, 2023

Confused About What’s Going on in the Housing Market? Lean on a Professional.

Confused About What’s Going on in the Housing Market? Lean on a Professional.

Confused About What’s Going on in the Housing Market? Lean on a Professional. | MyKCM

If you’re thinking about buying or selling a home, you probably want to know what’s really happening with home prices, mortgage rates, housing supply, and more. That’s not an easy task considering how sensationalized headlines are today. Jay Thompson, Real Estate Industry Consultant, explains:

“Housing market headlines are everywhere. Many are quite sensational, ending with exclamation points or predicting impending doom for the industry. Clickbait, the sensationalizing of headlines and content, has been an issue since the dawn of the internet, and housing news is not immune to it.

Unfortunately, when information in the media isn’t clear, it can generate a lot of fear and uncertainty in the market. As Jason Lewris, Cofounder and Chief Data Officer at Parclsays:

In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.

But it doesn’t have to be that way. Buying or selling a home is a big decision, and it should be one you feel confident making. To help you separate fact from fiction and get the answers you need, lean on a local real estate advisor.

A trusted expert is your best resource to understand what’s happening at the national and local levels. They’ll be able to debunk the headlines using data you can trust. And using their in-depth knowledge of the industry, they’ll provide context so you know how current trends compare to the normal ebbs and flows in the industry, historical data and more.

Then, to make sure you have the full picture, they’ll tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you’ll use all of that information to make the best possible decision for you.

After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where an agent comes in.

Bottom Line

If you have questions about the headlines or what’s happening in the housing market today, let’s connect so you have expert insights and advice on your side.

 

Posted in Market Updates
Dec. 27, 2022

Homeowners Still Have Positive Equity Gains over the Past 12 Months

Homeowners Still Have Positive Equity Gains over the Past 12 Months

Homeowners Still Have Positive Equity Gains over the Past 12 Months | MyKCM

If you’re a homeowner, your net worth got a big boost over the past few years thanks to rapidly rising home prices. Here’s how it happened and what it means for you, even as the market moderates.

Equity is the current value of your home minus what you owe on the loan.

Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially.

And while home price appreciation has moderated this year, and even depreciated slightly in some overheated markets, that doesn’t mean you’ve lost all the equity you gained during the pandemic frenzy.

To prove you still have equity you can use, the latest Homeowner Equity Insights from CoreLogic finds the average homeowner equity has actually grown by $34,300 over the past 12 months.

That’s right, despite the headlines, the average homeowner still gained positive equity over the last year in just about every market. While the gains aren’t as dramatic as they were in the previous quarter due to home price moderation, they’re still significant. And if you’ve been in your home for longer than a year, chances are you have even more equity than you realize.

While that’s the national number, if you want to know what happened over the past year in your area, look at the map below from CoreLogic:

Homeowners Still Have Positive Equity Gains over the Past 12 Months | MyKCM

Why This Is So Important Right Now

While equity helps increase your overall net worth, it can also help you achieve other goals, like buying your next home. When you sell your current house, the equity you’ve built up comes back to you in the sale, and it may be just what you need to cover a large portion – if not all – of the down payment on your next home.

So, if you’ve been holding off on selling because you weren’t sure what the headlines meant for your bottom line, rest assured you’ve still gained equity in recent years, and it can help fuel your move.

Bottom Line

If you’re planning to make a move, the equity you’ve gained over time can make a big impact. To find out just how much equity you have in your current home and how you can use it to fuel your next purchase, let’s connect.

 

Posted in Market Updates
Dec. 20, 2022

Ready To Sell? Today’s Housing Supply Gives You Two Opportunities.

Ready To Sell? Today’s Housing Supply Gives You Two Opportunities.

Ready To Sell? Today’s Housing Supply Gives You Two Opportunities. | MyKCM

At first glance, the increase in housing supply compared to last year may not sound like good news for prospective sellers, but it actually gives you two key opportunities in today’s housing market.

An article from Calculated Risk helps put the inventory gains the market has seen in 2022 into perspective by comparing it to recent years (see graph below). It shows supply has surpassed 2021 levels by 58%. But the further back you look, the more you’ll understand the bigger picture. And if you go all the way back to 2019, the last normal year in real estate, we’re roughly 35% below the housing supply we had at that time.

Ready To Sell? Today’s Housing Supply Gives You Two Opportunities. | MyKCM

Opportunity #1: Take Advantage of More Options for Your Move

If your current house no longer meets your needs or lacks the space and features you want, this inventory growth gives you even more opportunity to sell and move into the home of your dreams. With more houses on the market, you’ll have more to choose from when you search for your next home.

Partnering with a local real estate professional can help you make sure you’re up to date on the homes available in your area. And when you do find the one, a professional can advise you on how to write a winning offer.

Opportunity #2: Sell While Inventory Is Still Low Overall

But again, despite the growth, inventory is still low compared to more normal years, and that isn’t going to change overnight. For you, that means your house should still be in demand among potential buyers if you price it right.

As an article from realtor.com says:

“Today’s shoppers generally have more homes to consider than last year’s shoppers did, but the market is still not back to pre-pandemic inventory levels.”

Bottom Line

If you’re a homeowner looking to sell, you have more homes to choose from and can still sell your house while inventory is low overall. Let’s connect to get started, so you can have the best of both worlds.

Posted in Selling Tips
Dec. 13, 2022

What You Want To Know If You’re Pursuing Your Dream of Homeownership

What You Want To Know If You’re Pursuing Your Dream of Homeownership

What You Want To Know If You’re Pursuing Your Dream of Homeownership | MyKCM

If you’re a young adult, you may be thinking about your goals and priorities for the months and years ahead. And if homeownership ranks high on your goal sheet, you’re in good company. Many of your peers are also pursuing their dream of owning a home. The 2022 Millennial & Gen Z Borrower Sentiment Report from Maxwell says:

“Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.”

Let’s take a look at why homeownership makes the top of so many young buyers’ to-do list and what you need to consider to achieve your goals if you’re one of them.

Top Motivators To Buy a Home

Before you start the homebuying process, it’s helpful to know why homeownership is so important to you. The survey mentioned above sheds light on some of the top reasons why younger generations are looking to buy a home. It finds:

No matter which of these resonates the most with you, know there are many financial and non-financial reasons why you may want to buy a home. While your top motivator may be different than that of your friends, they’re all equally valid and worthwhile.

Key Obstacles and How To Overcome Them

Whether your homeownership goals come from the heart or are driven by financial aspirations (or both), it can still be hard to know where to start when you’re looking to buy a home. From understanding the homebuying process, to getting pre-approved, and exploring down payment options, it’s a lot to wrap your head around.

The same Maxwell survey also reveals key challenges for potential buyers. Thankfully, the knowledge and guidance of a trusted real estate professional can help you overcome both. Here’s a look at two of the hurdles potential homebuyers say they face:

1. The Mortgage Process Can Be Intimidating

In the Maxwell study, 33.37% said one of their obstacles was that the mortgage process is confusing or difficult to understand.

An article by OwnUp helps explain why the mortgage process is so challenging for buyers:

“There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.

While you may be tempted to do a quick search online to find instant answers to your questions, it may not get you the information you need to understand the full picture. Especially when it comes to financial advice, you want to lean on a true expert. Having trusted professionals on your side can help you to learn what it takes to achieve your dream of homeownership. Not to mention, an expert can give you advice specific to your situation, not generic advice like you’ll find online.

2. It’s Hard To Know How Much You Need To Save

In the Maxwell study, 45.75% believe they don’t have enough saved to cover their down payment or closing cost expenses.

What you may not realize is that, today, there’s a growing number of down payment assistance programs available nationwide to help relieve this pressure. A report from Down Payment Resource says:

“Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.”

Additionally, as the housing market cools, buyers are regaining some negotiation power and more sellers are willing to work with buyers to help with closing costs.  Understanding what’s out there and the options available may help you achieve your dream of homeownership faster than you thought possible.

Bottom Line

If you’re serious about becoming a homeowner, know it may be more in reach than you think. Lean on trusted professionals to help you overcome challenges and prioritize your next steps.

Posted in Buying Tips
Dec. 6, 2022

Mortgage Rates Will Come Down, It’s Just a Matter of Time

Mortgage Rates Will Come Down, It’s Just a Matter of Time

Mortgage Rates Will Come Down, It’s Just a Matter of Time | MyKCM

This past year, rising mortgage rates have slowed the red-hot housing market. Over the past nine months, we’ve seen fewer homes sold than the previous month as home price growth has slowed. All of this is due to the fact that the average 30-year fixed mortgage rate has doubled this year, severely limiting homebuying power for consumers. And, this month, the average rate for financing a home briefly rose over 7% before coming back down into the high 6% range. But we’re starting to see a hint of what mortgage interest rates could look like next year.

Inflation Is the Enemy of Long-Term Interest Rates

As long as inflation is high, we’ll see higher mortgage rates. Over the past couple of weeks, we’ve seen indications that inflation may be cooling, giving us a glimpse into what may happen in the future. The mortgage market is eagerly awaiting positive news on inflation. As Ali Wolf, Chief Economist at Zondasays:

The housing market is expected to face continued uncertainty heading into 2023 as consumers, financial markets, and policymakers work through their respective challenges in today’s economy. . . . we are watching for any additional stability in the MBS market, signs of cooling inflation, and/or less aggressive Federal Reserve action to give us confidence that mortgage rates are past their peak.”

What Does This Mean for the Future of Mortgage Rates?

As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow. We’ve seen nods of this over the past couple of weeks. As the Federal Reserve works to bring inflation down, mortgage rates will come down as well. Bill McBride from Calculated Risk says:

My current view is inflation will ease quicker than the Fed currently expects.”

As we look toward next year, we certainly hope he’s right.

Bottom Line

Mortgage rates will come down – it’s just a matter of time. The hope is we continue to see more positive news on inflation, and that’ll bring mortgage rates down. This will give prospective homebuyers more buying power and lead to more homeowners throughout the country.

Posted in Market News
Nov. 22, 2022

Home Equity: A Source of Strength for Homeowners Today

Home Equity: A Source of Strength for Homeowners Today

Home Equity: A Source of Strength for Homeowners Today | MyKCM

Experts agree there’s no chance of a large-scale foreclosure crisis like we saw back in 2008, and that’s good news for the housing market. As Mark Fleming, Chief Economist at First Americansays:

“. . . don’t expect a housing bust like the mid-2000s, as lending standards in this housing cycle have been much tighter and homeowners have historically high levels of home equity, so there likely won’t be a surge in foreclosures.”

Data from the Mortgage Bankers Association (MBA) helps tell this story. It shows the overall percentage of homeowners at risk is decreasing significantly with time (see graph below):

Home Equity: A Source of Strength for Homeowners Today | MyKCMBut even though the volume of homeowners at risk is very low, there is still a small percentage of homeowners who may be coming face to face with foreclosure as a possibility today. If you’re facing difficulties yourself, it can help to understand your options. It starts with knowing what foreclosure is. Investopedia defines it like this:

Typically, default is triggered when a borrower misses a specific number of monthly payments . . . Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property.

The good news is there are alternatives available to help you avoid going through the foreclosure process, including:

  • Reinstatement
  • Loan modification
  • Deed-in-lieu of foreclosure
  • Short sale

But before you go down any of those paths, it’s worth seeing if you have enough equity in your home to sell it and protect your investment.

You May Be Able To Use Your Equity To Sell Your House

Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

In today’s real estate market, many homeowners have far more equity in their homes than they realize due to the home price appreciation we’ve seen over the past few years. According to CoreLogic:

“The total average equity per borrower has now reached almost $300,000, the highest in the data series.”

So, what does that mean for you? If you’ve lived in your house for at least a few years or more, chances are your home’s value, and your equity, has risen dramatically. In addition, the mortgage payments you’ve made during that time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage.

Rick Sharga, Executive VP of Market Intelligence at ATTOM Dataexplains how equity can help:

“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”

Lean on Experts To Explore Your Options

To find out how much equity you have, work with a local real estate professional. They can give you an estimate of what your house could sell for based on recent sales of similar homes in your area. You may be able to sell your house to avoid foreclosure.

If you find out you have to pursue other options, your agent can help with that too. They’ll be able to connect you with other professionals in the industry, like housing counselors, who can look into your unique situation and offer advice on next steps if selling isn’t your best alternative.

Bottom Line

If you’re a homeowner facing hardship, let’s connect so you have an expert on your side to explore your options and see if you can sell your house to avoid foreclosure.

Posted in Market Updates
Nov. 15, 2022

Why It May Be Time To Add Newly Built Homes to Your Search

Why It May Be Time To Add Newly Built Homes to Your Search

Why It May Be Time To Add Newly Built Homes to Your Search | MyKCM

If you put a pause on your home search because you weren’t sure where you’d go once you sold your house, it might be a good time to get back into the market. If you’re willing to work with a trusted agent to consider a newly built home, you may have even more options and incentives than you realize. That may be why the National Association of Home Builders (NAHB) says the share of buyers looking for new construction is increasing:

“According to the quarterly Housing Trends Report, the popularity of new construction homes is continuing to rebound . . .”

Here’s a few reasons more buyers may be drawn to newly built homes.

More Options To Choose from and Potential Builder Incentives

When looking for a home, you can choose between existing homes (those that are already built and previously owned) and newly constructed ones. While the inventory of existing homes has increased this year, it’s still below more typical years like 2019. Currently, according to the National Association of Realtors (NAR), there is a 3.2-month supply at the current sales pace. For reference, a roughly 6-month supply is considered a balanced market, leaving us in a sellers’ market today.

While it’s a smaller segment of the overall inventory of homes for sale, the supply of newly built homes has grown even more. The National Association of Home Builders (NAHB) explains:

New single-family home inventory remained elevated at a 9.2 months’ supply (of varying stages of construction). A measure near a 6 months’ supply is considered balanced.”

Here’s why this matters for you. While you have more homes to choose from in either category, there’s one extra benefit of newly built homes. Because the inventory of newly built homes has grown so much, builders are motivated to sell their properties before they build more.

Back in the housing crash of 2008, builders were building too many homes, and that oversupply is part of what contributed to the housing bubble bursting. Now, builders don’t want to have a surplus of inventory in their pipeline, and many are offering buyers incentives to help move that inventory along. As Doug Duncan, Chief Economist at Fannie Maeexplains:

“. . . a continual increase in the number of completed homes available for sale is now occurring, with the inventories of such homes now at the highest level since July 2020. . . . This suggests to us that builders may be increasingly willing to offer more aggressive incentives and discounts to maintain sales of completed inventory.”

While specifics will vary by builder and market, some buyers are seeing builders reduce prices and offer incentives. To find out what’s available in your area, lean on a trusted real estate professional.

Lifestyle Benefits of Buying a Newly Built Home

In addition to more supply and the potential for builder incentives, newly built homes have various benefits that may suit your lifestyle. For example, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. That can free up time for you to do other things you’re passionate about.

Another perk of a new home is that nothing in the house is used. It’s brand new and uniquely yours from day one. You’ll have all new appliances, windows, roofing, and more. These things can help lower your energy costs, which can add up to significant savings over time. You may even have the latest and greatest technology features built into your new home.

Builder sums up why some buyers today are turning to newly built homes:

“For some, it’s the lure of something new and modern. For others, it’s the move-in ready experience. And now there’s another factor to consider when making this decision: technology.”

If any of these benefits appeal to you, it’s time to connect with a trusted real estate advisor to learn more.

Bottom Line

If you’re considering a newly built home, let’s connect so you have an expert guide on what’s available in our local market. Together we’ll explore your options and the benefits of an all-new home.

Posted in Buying Tips