Real Estate Blog for Buyers and Sellers - Charles Barrett

MY BLOGS

What’s Behind Today’s Mortgage Rate Volatility?

What’s Behind Today’s Mortgage Rate Volatility?

If you’ve been keeping an eye on mortgage rates lately, you might feel like you’re on a roller coaster ride. One day rates are up; the next they dip down a bit. So, what’s driving this constant change? Let’s dive into just a few of the major reasons why we’re seeing so much volatility, and what it means for you.The Market’s Reaction to the ElectionA significant factor causing fluctuations in mortgage rates is the general reaction to the political landscape. Election seasons often bring uncertainty to financial markets, and this one is no different. Markets tend to respond not only to who won, but also to the economic policies they are expected to implement. And when it comes to what’s been happening with mortgage rates over the past couple of weeks, as the National Association of Home Builders (NAHB) says:“. . . the primary reason interest rates have been on the rise pertains to the uncertainty surrounding the presidential election. Although the election is now complete, there continue to be growing concerns over budget deficits.”In the short term, this anticipation has caused a slight uptick in mortgage rates as the markets adjust and react. Additionally, factors like international tensions, supply chain disruptions, and trade policies can drive investor sentiment, causing them to seek safer assets like bonds, which can indirectly impact mortgage rates. Essentially, the more global or domestic uncertainty, the greater the chance that mortgage rates may shift.The Economy and the Federal ReserveInflation and unemployment are two other big drivers of mortgage rates. The Federal Reserve (the Fed) has been working to bring inflation under control, and has been closely monitoring the economy as they do. And as long as inflation continues to moderate and the job market shows signs of maximum employment, the Fed will continue its plans to cut the Federal Funds Rate.Although the Fed doesn’t set mortgage rates, their decisions do have an impact, and typically a cut leads to a mortgage rates response. And in their November 6-7th meeting, the Fed had the data they needed to make another cut to the Federal Funds Rate. And while that decision was expected and much of the mortgage rate movement happened prior to that meeting, there was a slight dip in rates.What To Expect in the Coming MonthsAs we look ahead, mortgage rates will respond to changes in the Fed’s policies and other economic indicators. The markets will likely remain in a wait-and-see mode, reacting to each new development. And, with the transition of a new administration comes an element of unpredictability. A recent article from The Mortgage Reports explains:“Today’s economic indicators come with mixed pressures on mortgage rates and we’re likely to be in for a good amount of volatility as markets adjust and respond to the election . . .”The best way to navigate this landscape is to have a team of real estate experts by your side. Professionals will help you understand what’s happening and can provide you with the guidance you need to make informed housing market decisions along the way.Bottom LineThe takeaway? Today’s mortgage rate volatility is going to continue to be driven by economic factors and political changes.Now is the time to lean on experienced professionals. A trusted real estate agent and mortgage lender can help you navigate through it. And with the right guidance, you can make informed decisions.
Is Wall Street Really Buying All the Homes?

Is Wall Street Really Buying All the Homes?

Let’s be real – buying a home right now is tough. You’re scrolling through listings, rushing to open houses, and maybe even losing out to more competitive offers. Somewhere along the way, you might’ve heard the reason it’s so hard to find a home is because big Wall Street investors are swooping in and snatching up everything in sight.But here’s the thing: that’s mostly a myth. While investors are part of the market, according to Redfin, they’re a relatively small part:Here’s what that means. Five out of every six homes are being purchased by everyday homebuyers like you – not big investors.So, before you get discouraged, let’s take a look at what’s really going on. You might be surprised to learn that Wall Street isn’t the competition you may think it is.Most Investors Are Small Mom-and-PopsMost investors aren’t the mega corporations you’ve probably heard about. In fact, many are your neighbors. A recent report from CoreLogic shows most investors are small, mom-and-pop types who own fewer than 10 properties. They aren’t massive companies with endless resources. Picture your neighbor who has another home they’re renting out or a vacation getaway.Only about 1% of the market is owned by large, mega investors with thousands of properties. The majority are still owned by individuals and smaller investors – not the Wall Street giants.Investor Purchases Are DecliningNot only are most investors small, but overall investor purchases have been on the decline. As the same report from CoreLogic says: “Investors made 80,000 purchases in June 2024, compared with 112,000 in June 2023, and a nearly 50% percent drop from the high of 149,000 purchases in June 2021 . . .”And what does this mean going forward? CoreLogic goes on to point out this downward trend is expected to continue into 2025.So, if it seems like competition with investors is pushing you out of the market, it might help to know that investor activity is actually slowing down.Bottom LineThe idea that Wall Street is buying up all the homes is largely a myth. Most investors are small ones, and the share of homes purchased by investors is declining – so you can take this one off your worry list.If you have questions about the housing market, talk to a local real estate agent. They can explain what’s really happening.
Don’t Let These Two Concerns Hold You Back from Selling Your House

Don’t Let These Two Concerns Hold You Back from Selling Your House

If you’re debating whether or not you want to sell right now, it might be because you’ve got some unanswered questions, like if moving really makes sense in today’s market. Maybe you’re wondering if it’s even a good idea to move right now. Or you’re stressed because you think you won't find a house you like.To put your mind at ease, here’s how to tackle these two concerns head-on.Is It Even a Good Idea To Move Right Now?If you own a home already, you may have been holding off because you don’t want to sell and take on a higher mortgage rate on your next house. But your move may be a lot more feasible than you think, and that’s because of your equity.Equity is the current market value of your home minus what you still owe on your loan. And thanks to the rapid appreciation we saw over the past few years, your equity has gotten a big boost. Just how much are we talking about? See for yourself. As Dr. Selma Hepp, Chief Economist at CoreLogic, explains:“Persistent home price growth has continued to fuel home equity gains for existing homeowners who now average about $315,000 in equity and almost $129,000 more than at the onset of the pandemic.”Here’s why this can be such a game-changer when you sell. You can use that equity to put down a larger amount on your next home, which means financing less at today’s mortgage rate. And in some cases, you may even be able to buy your next home in cash, avoiding mortgage rates altogether.The bottom line? Your equity could be the key to making your next move possible.Will I Be Able To Find a Home I Like?If this is on your mind, it’s probably because you remember just how low the supply of homes for sale got over the past few years. It felt nearly impossible to find a home to buy because there were so few available.But finding a home in today’s market isn’t as challenging. That’s because the number of homes for sale is growing, giving you more options to choose from. Data from Realtor.com shows just how much inventory has increased – it's up almost 30% year-over-year (see graph below):And even though inventory is still below pre-pandemic levels, this is the highest it’s been in quite a while. That means you have more options for your move, but your house should still stand out to buyers at the same time. That’s a sweet spot for you.It’s important to note, though, that this balance varies by local market. Some places may have more homes for sale than others, so working with a local real estate agent is the best way to see what inventory trends look like in your area. Bottom LineIf you’re thinking about selling, hopefully these concerns haven’t kept you up at night. With this information, you should realize you don’t have to let the what-if’s delay your move anymore.Connect with a local agent so you have the data and the local perspective you need to move forward.

What’s Happening with Home Prices?

Many people have questions about home prices right now. How much have prices risen over the past 12 months? What’s happening with home values right now? What’s projected for next year? Here’s a look at the answers to all three of these questions.How much have home values appreciated over the last 12 months?According to the latest Home Price Index from CoreLogic, home values have increased by 18.1% compared to this time last year. Additionally, prices have gone up at an accelerated pace for each of the last eight months (see graph below):The increase in the rate of appreciation that’s shown by CoreLogic coincides with data from the other two main home price indices: the FHFA Home Price Index and the S&P Case Shiller Index.The last year has shown tremendous home price appreciation, which is resulting in a major gain in wealth for homeowners through rising equity.What’s happening with home prices right now?All three indices mentioned above also show that while appreciation is in the high double digits right now, that price acceleration is beginning to level off (see graph below):Year-over-year appreciation is still close to 20%, but it’s clearly plateauing at that rate. Many experts believe it will drop below 15% by the end of the year.Keep in mind, that doesn’t mean home values will depreciate. It means the rate of appreciation will slow, yet stay well above the 25-year average of 5.1%.What about next year?The recent surge in prices is the result of heavy buyer demand and a shortage of homes available for sale. Most experts believe that as more housing inventory comes to market (both new construction and existing homes), the supply and demand for housing will come more into balance. That balance will bring a lower rate of appreciation in 2022. Here’s a look at home price forecasts from six major entities, and they all project future appreciation:Fannie MaeFreddie MacMortgage Bankers AssociationHome Price Expectation SurveyZelman & AssociatesNational Association of RealtorsWhile the projected rate of appreciation varies among the experts, due to things like supply chain challenges, virus variants, and more, it’s clear that home values will continue to appreciate next year.Bottom LineThere have been historic levels of home price appreciation over the last year. That pace will slow as we finish 2021 and enter into 2022. Prices will still rise in value, just at a much more moderate pace, which is good news for the housing market.

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How Sellers Win When Housing Inventory Is Low

In today’s housing market, the number of homes for sale is much lower than the strong buyer demand. As a result, homeowners ready to sell have a significant advantage. Here are three ways today’s low inventory will set you up for a win when you sell this season.1. Higher PricesWith so many more buyers in the market than homes available for sale, homebuyers are frequently getting into bidding wars for the houses they want to purchase. According to the latest data from the National Association of Realtors (NAR), homes are receiving an average of 3.7 offers in today’s market. This buyer competition drives home prices up. As a seller, this certainly works to your advantage, potentially netting you more for your house when you close the deal.2. Greater Return on Your InvestmentRising prices mean homes are also gaining value, which increases the equity you have in your home. In the latest Homeowner Equity Insights Report, CoreLogic explains:“In the second quarter of 2021, the average homeowner gained approximately $51,500 in equity during the past year.”This year-over-year growth in equity gives you the ability to sell your house and then put that money toward a down payment on your next home, or to keep it as extra savings.3. Better TermsIn a sellers’ market like we have today, you’re in the driver’s seat if you make a move. You have the power to sell on your terms, and buyers are more likely to work with you if it means they can finally land their dream home.So, is low housing inventory a big deal?Yes, especially if you want to sell on your terms. Moving now while inventory is so low is key to maximizing your opportunities.Bottom LineIf you’re interested in taking advantage of the current sellers’ market, let’s connect today to determine your best move.

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Two Graphs That Show Why You Shouldn’t Be Upset About 3% Mortgage Rates

With the average 30-year fixed mortgage rate from Freddie Mac climbing above 3%, rising rates are one of the topics dominating the discussion in the housing market today. And since experts project rates will rise further in the coming months, that conversation isn’t going away any time soon.But as a homebuyer, what do rates above 3% really mean?Today’s Average Mortgage Rate Still Presents Buyers with a Great OpportunityBuyers don’t want mortgage rates to rise, as any upward movement increases your monthly mortgage payment. But it’s important to put today’s average mortgage rate into perspective. The graph below shows today’s rate in comparison to average rates over the last five years:As the graph shows, even though today’s rate is above 3%, it’s still incredibly competitive. But today’s rate isn’t just low when compared to the most recent years. To truly put today into perspective, let’s look at the last 50 years (see graph below):When we look back even further, we can see that today’s rate is truly outstanding by comparison.What Does That Mean for You?Being upset that you missed out on sub-3% mortgage rates is understandable. But it’s important to realize, buying now still makes sense as experts project rates will continue to rise. And as rates rise, it will cost more to purchase a home.As Mark Fleming, Chief Economist at First American, explains:“Rising mortgage rates, all else equal, will diminish house-buying power, meaning it will cost more per month for a borrower to buy ‘their same home.’”In other words, the longer you wait, the more it will cost you.Bottom LineWhile it’s true today’s average mortgage rate is higher than just a few months ago, 3% mortgage rates shouldn’t deter you from your homebuying goals. Historically, today’s rate is still low. And since rates are expected to continue rising, buying now could save you money in the long run. Let’s connect so you can lock in a great rate now.

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BLOGS

MY BLOGS

What’s Behind Today’s Mortgage Rate Volatility?

What’s Behind Today’s Mortgage Rate Volatility?

Is Wall Street Really Buying All the Homes?

Is Wall Street Really Buying All the Homes?

Don’t Let These Two Concerns Hold You Back from Selling Your House

Don’t Let These Two Concerns Hold You Back from Selling Your House