A trend that has been emerging for some time now is the contrast between inventory & demand in the Premium & Luxury Markets vs. the Starter & Trade-Up Home Markets and what that’s, in turn, doing to prices!
Inventory continues to rise in the luxury & premium home markets which is causing prices to cool.
Demand continues to rise with low inventory in the starter & trade-up home markets, causing prices to rise!
According to the National Association of Realtors, median home prices across the US have increased by more than 7% year-over-year. This means you’d pay approx. $374,000 in today’s market for a house you could have purchased a year ago for $349,000. Here are three ways this could impact you:
1 – If You’re Thinking of Selling a Home You may benefit by selling your home now instead of waiting. The new home you’d purchase to replace your current home is likely to cost you more if you wait a year. Not only that, but your monthly payments could also increase if interest rates continue to climb.
2 – If You’re Thinking of Buying a Home For the same reasons stated above, it’s probably a good idea for you to consider buying now instead of waiting. If home prices continue to increase, you’d benefit from the increase instead of being stuck on the other side of the decision wishing you could have purchased a home at last year’s prices.
3 – If You’re Thinking of Making Home Improvements If your home has increased in value, you may be able to tap into the additional equity to finance your home improvement project.
Contact me for more info or to explore your options!
Over the next five years, home prices are expected to appreciate, on average, by 3.6% per year and to grow by 18.2% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.
So, what does this mean for homeowners and their equity position?
As an example, let’s assume a young couple purchased and closed on a $250,000 home this January. If we only look at the projected increase in the price of that home, how much equity will they earn over the next 5 years?
Since the experts predict that home prices will increase by 5.0% in 2018, the young homeowners will have gained $12,500 in equity in just one year.
Over a five-year period, their equity will increase by over $48,000! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.
Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future. If you are ready and willing to buy, find out if you are able to today!
According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.
After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.
“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”
Bankrate.comgathered closing cost data from lenders in every state and Washington, D.C. in order to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.
Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. According to Freddie Mac,
“Closing costs are typically between 2 and 5% of your purchase price.”
You need to speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. I have always wondered – Why do buyers wait till they are under contract to find out how much they need. In many discussions I have found that most Realtors do not understand how closing costs work and also how much they really are. With these two statements above it is no surprise why many buyers have challenges with the home buying process.
We have created a process called the Home Express Mortgage Plan that haelps our clients to know there numbers prior to contract thus helping them navigate the contract negotiation process and make the transition that much easier.
Unfortunatly it is not uncommon – Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.