How Owning a Home Builds Your Net Worth

Tuesday September 6th, 2022 First Time Home Buyers, For Buyers

Owning a home is a major financial milestone and an achievement to take pride in. One major reason: the equity you build as a homeowner gives your net worth a big boost. And with high inflation right now, the link between owning your home and building your wealth is especially important.

If you’re looking to increase your financial security, here’s why now could be a good time to start on your journey toward homeownership.

Owning a Home Is a Key Ingredient for Financial Success

A report from the National Association of Realtors (NAR) details several homeownership trends, including a significant gap in net worth between homeowners and renters. It finds:

“. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”

To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter’s. This difference shows owning a home is a key step in achieving financial success.

Equity Gains Can Substantially Boost a Homeowner’s Net Worth

The net worth gap between owners and renters exists in large part because homeowners build equity. When you own a home, your equity grows as your home appreciates in value and you make your mortgage payments each month. As a renter, you don’t have that same opportunity. A recent article from CNET explains:

“Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you’re building equity in your home . . . When you rent, you aren’t investing in your financial future the same way you are when you’re paying off a mortgage.”

But on top of that, your home equity grows even more as your home appreciates in value over time. That has a major impact on the wealth you build, as a recent article from Bankrate notes:

“Building home equity can help you increase your wealth over time, . . . A home is one of the only assets that have the potential to appreciate in value as you pay it down.”

In other words, when you own your home, you have the advantage of your mortgage payment acting as a contribution to a forced savings account that grows in value as your home does. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month.

Bottom Line

Owning a home is an important part of building your net worth. If you’re ready to start on your journey to homeownership, let’s connect today.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Teena and John Turner and Keeping Current Matters, Inc. do 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. Teena and John Turner and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Here’s Why It’s Still a Sellers’ Market [INFOGRAPHIC]

Friday September 2nd, 2022 For Sellers, Housing Market Updates, Infographics, Selling Myths

Some Highlights

While buyer demand has moderated and housing supply has grown in recent months, it’s still a sellers’ market because inventory is low.
The latest data shows sellers continue to benefit from serious buyers and competitive offers. In July, the average home received 2.8 offers and 39% sold over the asking price.
You haven’t missed your opportunity to sell. Let’s connect to start the process today.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Teena and John Turner and Keeping Current Matters, Inc. do 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. Teena and John Turner and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

New Homes May Have the Incentives You’re Looking for Today

Thursday September 1st, 2022 First Time Home Buyers, For Buyers, Housing Market Updates, Move-Up Buyers, New Construction

According to the U.S. Census Bureau, this year, builders are on pace to complete more than a million new homes in this country. If you’ve had trouble finding a home to buy over the past year, it may be time to work with your trusted agent to consider a new build and the incentives that come with it. Here’s why.

The Supply of Newly Built Homes Is Rising

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 is on the rise today, it’s still in tight supply, meaning it can be challenging to find just the right one.

The inventory of newly built homes, however, is also rising. And with more options available than there have been in years, a new home may be just the answer you’re looking for. The graph below shows just how much the supply of newly built homes has grown this year.

And here’s the thing – builders are also keeping a close eye on current market trends. With mortgage rates rising this year and, as a result, buyer demand softening, builders are slowing their pace of new construction. That’s because they learned their lesson in the housing crash of 2008 and want to avoid over-building and having too much inventory in their pipeline.

Basically, while there are more newly built homes on the market today than there have been in years, many builders want to sell their current inventory before adding much more – and that’s where you can really benefit. Today, builders may be more willing to work with buyers. According to a recent survey, 83% of builders have reduced their prices over the last three months.

What That Means for You

The current supply of newly built homes for sale coupled with the fact that data shows the majority of builders are doing price reductions are both great news for you. It means you may have more options and possibly some much-needed relief if you consider newly built homes in your search.

Bottom Line

If you’re ready to buy, it may be time to look for a newly built home. To learn what’s available in our area and what incentives these builders are offering, let’s connect today.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Teena and John Turner and Keeping Current Matters, Inc. do 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. Teena and John Turner and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Buyers: You May Face Less Competition as Bidding Wars Ease

Wednesday August 31st, 2022 First Time Home Buyers, For Buyers, Housing Market Updates, Move-Up Buyers

One of the top stories in recent real estate headlines was the intensity and frequency of bidding wars. With so many buyers looking to purchase a home and so few of them available for sale, fiercely competitive bidding wars became the norm during the pandemic – and it drove home prices up. If you tried to buy a house over the past two years, you probably experienced this firsthand and may have been outbid on several homes along the way.

But here’s the news you’ve been waiting for: data shows clear signs bidding wars are easing this year.

According to the National Association of Realtors (NAR), the average number of offers on recently sold homes has declined considerably over the past few months (see graph below):

The graph shows homes were seeing a high of around five offers earlier this year. But the latest data shows that average was down to just shy of three offers per recently sold home. This shift is happening largely because rising mortgage rates moderated buyer demand and slowed home sales, resulting in a growing supply of homes on the market. Essentially, more choices for buyers.

What This Means for You

If you put your home search on pause because you were outbid last year or because you didn’t want to deal with the peak intensity of bidding wars, you can breathe a welcome sigh of relief. While it’s still a sellers’ market, an uptick in inventory gives you a window of opportunity to jump back in. You may still be competing with some buyers, but it likely won’t be anything like it was just a few short months ago.

Bottom Line

If you put your plans on pause because of intense bidding wars in recent years, it may be time to kick off your home search. Today, bidding wars are easing and that may mean less competition for you as a buyer. If you’re serious about buying a home or making a move, let’s connect to get started today.

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What’s Actually Happening with Home Prices Today?

Tuesday August 30th, 2022 For Buyers, For Sellers, Housing Market Updates, Pricing

One of the biggest questions people are asking right now is: what’s happening with home prices? There are headlines about ongoing price appreciation, but at the same time, some sellers are reducing the price of their homes. That can feel confusing and makes it more difficult to get a clear picture.

Part of the challenge is that it can be hard to understand what experts are saying when the words they use sound similar. Let’s break down the differences among those terms to help clarify what’s actually happening today.

Appreciation is when home prices increase.
Depreciation is when home prices decrease.
Deceleration is when home prices continue to appreciate, but at a slower or more moderate pace.

Experts agree that, nationally, what we’re seeing today is deceleration. That means home prices are appreciating, just not at the record-breaking pace they have over the past year. In 2021, data from CoreLogic tells us home prices appreciated by an average of 15% nationwide. And earlier this year, that appreciation was upward of 20%. This year, experts forecast home prices will appreciate at a decelerated pace of around 10 to 11%, on average.

The graph below uses the latest data from CoreLogic to help tell the story of how home prices are decelerating, but not depreciating so far this year.

As the green bars show, home prices appreciated between 19-20% year-over-year from January to March. But over the last few months, the pace of that appreciation has decelerated to 18%. This means price growth is still climbing compared to last year but at a slower rate.

As the Monthly Mortgage Monitor from Black Knight explains:

“Annual home price growth dropped by nearly two percentage points . . . – the greatest single-month slowdown on record since at least the early 1970s. . . While June’s slowdown was record-breaking, home price growth would need to decelerate at this pace for six more months to drive annual appreciation back to 5%, a rate more in line with long-run averages.”

Basically, this means, while moderating, home prices are still far above the norm, and we’d have to see a lot more deceleration to even fall in line with more typical rates of home price growth. That’s still not home price depreciation.

The big takeaway is home prices haven’t fallen or depreciated nationwide, they’re just decelerating or moderating. While some unique and overheated markets may see declines, nationally, home prices are forecast to appreciate. And when we look at the country as a whole, none of the experts project home prices will net depreciate or fall. They’re all projecting ongoing appreciation.

Bottom Line

If you have questions about what’s happening with home prices in our local area, let’s connect.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Teena and John Turner and Keeping Current Matters, Inc. do 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. Teena and John Turner and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.