If spending more time at home over the past year is making you really think hard about buying a home instead of renting one, you’re not alone. There are many reasons people consider buying a home. You may be wondering, however, if the dollars and cents add up in your favor as home prices continue to rise. According to the experts, in many cases, it’s still more affordable to buy a home than rent one. Here’s why.
“Owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 572, or 63 percent of the 915 U.S. counties analyzed for the report.
That has happened even though median home prices have increased more than average rents over the past year in 83 percent of those counties and have risen more than wages in almost two-thirds of the nation.”
How is this possible?
The answer: historically low mortgage interest rates. Todd Teta, Chief Product Officer with ATTOM Data Solutions, explains:
“Home-prices are rising faster than rents and wages in a majority of the country. Yet, home ownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check.”
In 2020, mortgage rates reached all-time lows 16 times, and so far, they’re continuing to hover in low territory this year. These low rates are a big factor in driving affordability. Teta also notes:
“It’s startling to see that kind of trend. But it shows how both the cost of renting has been relatively high compared to the cost of ownership and how declining interest rates are having a notable impact on the housing market and home ownership. The coming year is totally uncertain, amid so many questions connected to the Coronavirus pandemic and the broader economy. But right now, owning a home still appears to be a financially-sound choice for those who can afford it.”
If you’re considering buying a home this year, let’s connect today to discuss the options that match your budget while affordability is in your favor.
According to many experts, the real estate market is expected to continue growing in 2021, and it’s largely driven by the lasting impact the pandemic is having on our lifestyles. As many of us spend extra time at home, we’re reevaluating what “home” means and what we may need in one going forward. Here are 4 reasons people are reconsidering where they live and why they’re expecting to buy a home this year.
1. Record-Low Mortgage Interest Rates
In 2020, the average interest rate for a 30-year fixed mortgage hit a record low 16 times, continuing to fall further below 3%. According to Freddie Mac, the average 30-year fixed interest rate today is 2.65%. Many wonder how low these rates will go and how long they’ll last. Len Keifer, Deputy Chief Economist for Freddie Mac, advises:
“If you’ve found a home that fits your needs at a price you can afford, it might be better to act now rather than wait for future rate declines that may never come and a future that likely holds very tight inventory.”
This sense of urgency is driving many to buy this year.
2. Working from Home
Remote work is a new normal for many businesses, and it’s lasting longer than most expected. Many in the workforce today are discovering they don’t need to live close to the office anymore and they can get more for their money by moving a little further outside of the city limits. David Mele, President at Homes.com, says:
“The surge in the work-from-home population has rewritten the playbook for many homebuying and rental decisions, from when and where to relocate, to what people are looking for in their next residence.”
The reality is, for some people, working remotely in their current home is challenging, especially when there may be other options available.
3. More Outdoor Space
Another new priority for homeowners is having more usable outdoor space. Being at home is driving those in some areas to seek less densely populated neighborhoods so they have more room to stretch their legs. In addition, those living in apartments and townhomes are often looking for extra square footage, both inside and out.
According to the State of Home Spending report by HomeAdvisor, of the households surveyed, almost half reported spending 27% more on outdoor living over the past year. This is a trend that’s expected to grow in 2021 and beyond.
4. Avoiding Renovations
It’s recently come to light that many homeowners would also rather buy a new home than go through the process of fixing up the one they have. According to the 2020 Profile of Home Buyers and Sellers report from the National Association of Realtors (NAR), 44% of homebuyers purchased a new home to “avoid renovations or problems with the plumbing or electricity.”
Depending on what needs to be addressed, today’s high buyer demand may make it possible to skip some renovations before selling. Many of these homeowners have prioritized buying over renovating for convenience and potential cost savings.
It’s clear that homeownership needs are changing. As a result, Americans are expected to move in record numbers this year. If you’re trying to decide if now is the right time to buy a home, let’s connect today to discuss your options.
Your home is a way to show who you are. It’s a place where you can find solace, and also a place that you and the family bust out some karaoke tunes. It’s a place where change happens. Whether you are making some big-time decisions while working remotely at a meeting, or some heartfelt choices around the dinner table, your home is the place where life happens. And, maybe your life has changed. And, that’s okay. In a sense, life is change. If you’re looking to make the move to fit your life better, let’s talk about all the possibilities.
Adapting with Change
Change is inevitable. It’s good to acknowledge, and sometimes takes courage to move with change. It’s good to go with the flow and listen to what your heart is telling you, and what your family is needing and wanting at this stage in the game. If you’re in the market for a home that cultivates the life you’re leading now, we are here to help you find it. We are here to support you at every moment. And with that, we are also experts at anticipating potential bumps in the road to getting there, which makes the journey smoother in the end.
At BST Realty LLC, we are here to offer you the very best in service. It’s our job to make your life easier when it comes to buying or selling a home. It’s also our job to ensure that you’re aware of all the possibilities as well as make the journey enjoyable. If you’re feeling the itch to change it up, we’re here to help you talk through what your hopes and dreams are for the future. Give us a call, and let’s begin to lay-out a plan to get you there. Let’s dream about all the options that are out there to get you to where you want to be.
The importance of home equity: Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently posted:
“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”
Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home.
You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, contact a local real estate professional.
Is homeownership truly a better path to wealth than renting? Importance of Home Equity
Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.
As proof of this, First American broke down the net worth of homeowners and renters by income categories. Here are their findings:Only one income category ($127-192K) has a higher net worth for renters over homeowners. Every other category shows that being a homeowner leads to greater accumulated wealth.
According to the latest Homeowner Equity Insights Report from CoreLogic, the average homeowner gained $17,000 in equity in just the last year. Here’s a breakdown of the year-over-year equity gain by state:
When can you cash in on your housing wealth? Importance of Home Equity
Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are:
Selling: When you decide to sell your home, the equity you’ve built over time will come back to you in the sale. For example, if you paid off your $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing.
Refinancing: You can refinance your current mortgage and take out some of the equity you have accumulated. With today’s historically low mortgage rates, you may be able to take out substantial cash and keep your monthly payment the same. Thankfully, homeowners today are doing this responsibly and not repeating the same mistakes made in 2006-2008 when some cashed out their entire equity to purchase luxury items like new cars, lavish vacations, etc.
How can these options help homeowners?
During these difficult times, many households are struggling with their housing expenses. Homeowners, because of their equity, have better alternatives. Odeta Kushi, Deputy Chief Economist at First American, recently explained that homeowners financially impacted by the pandemic will not necessarily be faced with foreclosure:
“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock.”
Ready to stop renting? Contact us to get on the road to building wealth through home ownership!
What might the future bring?
Most experts are calling for home prices to continue appreciating going forward. The Home Price Expectation Survey, a survey of a national panel of over one hundred economists, real estate experts, and investment & market strategists, indicates appreciation will continue for at least the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser would potentially earn by buying a $300,000 home this January:
Home equity, for most Americans, is the quickest way to build household wealth. That wealth gives homeowners more options during good times and in difficult situations.
If you are a home owner and want to find out more about how much equity you have built, contact us and one of our experience agents can send you a free equity report.
We are wishing you a wonderful New Year’s Eve! With a new year comes new cheer. My goodness, it seems that most of us are welcoming 2021 with open arms…and some of us are thinking it couldn’t arrive fast enough. This year has been one for the books, that’s for sure. It has shown us more of who we are as a community. Events from this year have brought us together to show us that we are stronger when we work with one another. That’s at the heart of what makes Bledsoe Santana Team Realty LLC. We are a team that works with one another. When serving our clients, we make sure it’s a team effort, and everyone feels supported.
This New Year’s Eve, we hope that you’re able to spend it with your loved ones. Perhaps you’ll take a sip of the bubbly to usher in the New Year. Maybe you’ll even shed a tear of relief and be grateful for getting through what you may have endured. This year has reminded us to hold our loved ones close. After all, we understand relationships are one of the most important things we have in our lives. That’s why we create special bonds with our clients not just over one transaction of a sale, but we plan on being there for the long haul. What does that mean? It means we believe in building relationships that last.
If 2021 may be a time of reflection and celebration. It may be a time where you can finally take that deep breath in and realize you want a change. It may be as important as the buying or selling of your home. We are here for life’s big moments. When you’re ready, just give us a call. Let’s take on this great journey together. Let’s make memories that you’ll want to tell your loved ones about for years to come. We’re ready to serve you and help make your dreams become a reality.
2020 has been a doozie, and 2021 is just around the corner with blue skies ahead. What have you been doing to make sure you’re taking care of yourself and your loved ones? A lot of people like to take to the woods in order to find solace and feel a connection with nature. Outdoor activities are plentiful in the Willamette Valley. Even though it’s December, there’s still plenty of sunshine to light up many paths you may choose to take. Plus, as most Oregonians (or Oregonian transplants) know, just layer up and make sure you’re prepared for a bit of rain, and you’re set to explore the vast wonderland that is the Pacific Northwest.
2021 may feel like a time to change it up. To set a new tone with what lies ahead. Perhaps you’re thinking about moving to a home that makes more room for your kiddos or a grandparent whom you adore dearly. Maybe it’s your first time thinking about making the plunge into becoming a homeowner. Whatever stage you’re at, we’ll meet you there and support you at every step in your real estate journey.
Your Home Up Close
This year, you may have had a lot of time to think about your home. You’ve gotten up close and personal with it. It could be because you have been working from home. Perhaps you’ve taken up helping your kids with online schooling. And, you’re seeing the potential for having your kids home even more. This could be in the form of a bonus room, or perhaps an ADU (accessory dwelling unit) that provides some space between work and home. Maybe you’ve also had a chance to redo a couple of things in your home. Now, you’re ready to put it on the market. At Bledsoe Santana Team Realty LLC, we are here to help you find your personal oasis, wherever it may be.
When you celebrate this New Year’s Eve, think about all the things you have accomplished and what lies next in store for you and your family. Think about all the love and strength it took to get you to where you are now, and how you may build upon it. We are here to help cultivate your dreams to get you to that new plateau. If you’re a first time home Buyer or a Seller, we have got you covered. We care about you. We love to listen to what you really want, so that we may better serve you and your family in your real estate endeavors. Here’s to a wonderful new year.
The holidays are in full swing with Santa and his reindeer are getting ready for the epic worldwide trip to deliver gifts to little ones. Perhaps Rudolf’s favorite song is playing to urge him on the journey ahead. The story of Santa is a cherished one that began a long time ago, and at the heart of it is not only receiving gifts, but also remembering to be kind to others. Santa makes his list, checks it’s twice, and it’s rumored that he’ll know who is naughty or nice. Whether you still leave cookies and milk under the tree for Santa, or perhaps your tradition has changed up a bit over the years, we hope that your holiday is full of joy. At Bledsoe Santana Team Realty LLC, we are here to help you fulfill your wish list when it comes to buying or selling your home.
What are you wishing for?
There are so many wonderful decorations you may be noticing in the neighborhood this time of year. In Silverton, there’s a great little place by the Mr. and Mrs. Claus mural for children to deposit their holiday wish list. When you were a kid, what did you ask Santa for? Have the times changed since then? From a remote control car to virtual reality goggles, the times are always changing. When it comes to real estate, we are here to help you at every point in the journey. We also are making a list and checking it twice. However, it’s to make sure we have gotten all the boxes checked off what you want as well as making sure all the fine details are given the attention they deserve.
We hope that your holiday is safe and full of love. And, we can’t wait to ring in 2021 with you! If you’re thinking of buying or selling real estate, give us a call. Let’s begin to fulfill your wish list. start a plan to make 2021 a grand time that makes joyful memories to share for generations.
During the holidays, neighbors are decorating their homes to express themselves. It’s a great way to show your personal style to the neighborhood. At Bledsoe Santana Team Realty LLC, we believe in working with Buyers to make sure they are getting the home that truly checks all the boxes. And, we also believe in working with Sellers to showcase their home’s unique qualities and make sure all the boxes are checked, too. Whether you’re a Buyer or a Seller, we make sure that your experience is uniquely yours.
This week has some mighty welcoming weather for December. So, it may be nice to take a jaunt around your own neighborhood to marvel at all the lights. Each home has a different personality. You may see a giant snowman, a nativity scene, or lights strung up on a tree that reaches into the sky. Whatever it is, it’s wonderful that each home has such a unique take on how to celebrate. Living in the Willamette Valley feels like living in an oasis, and in the holidays, it lights up even more! If you’re still looking for ways to brighten up your home or for someone else special, then shopping at local businesses is also a great way to spread holiday joy.
January is right around the corner…with 2021 about to make its grand entrance. With this changing of the year, you may also have some New Year’s resolutions or simply want a change yourself. If you’re thinking about buying or selling real estate, we are here for you in this grand adventure. We are here to support you at every point in the journey. Give us a call, and let’s begin making your dreams a reality!