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Market Update Blogs & Article Posts
Avoid the Rental Trap in 2023
If you’re a renter, you likely face an important decision every year: renew your current lease, start a new one, or buy a home. This year is no different. But before you dive too deeply into your options, it helps to understand the true costs of renting moving forward.
In the past year, both current renters and new renters have seen their rent go up based on information from realtor.com:
“Three out of four renters (74.2%) who have moved in the past 12 months reported seeing their rent increase. The strain from recent rent hikes isn’t exclusive to renters who have recently moved. Nearly two-thirds of renters (63.2%) who have lived in their current rental between 12 and 24 months, and likely renewed their lease, have also reported increases in their rent.”
And if you look back at historical data, that shouldn’t come as surprise. That’s because, according to the Census, rents have been rising fairly consistently since 1988.
So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. The 2023 Housing Forecast from realtor.com expects rents will keep climbing.
That forecast projects rents will increase by 6.3% in the year ahead (shown in green). When compared to the blue bars in the graph, it’s clear that the 2023 projection doesn’t call for an increase as drastic as the ones renters have seen over the past two years, but it’s still above the historical average for rent hikes between 2013-2019.
That means, if you’re planning to rent again this year and you’ve not yet renewed your lease, you may pay more when you do.
Homeownership Provides an Alternative to Rising Rents
These rising costs may make you reconsider what other alternatives you have. If you're looking for more stability, it could be time to prioritize homeownership. One of the many benefits of owning your own home is it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac says:
“Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you're paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.”
If you’re planning to make a move this year, locking in your monthly housing costs for the duration of your loan can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases like you would if you left your housing payment up to your landlord and their renewal cycle.
Homeowners also enjoy the added benefit of home equity, which has grown substantially. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage on a house, you grow your wealth through the forced savings that is your home equity.
Bottom Line
If you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Let’s chat to see how you can begin your journey to homeownership today.
Sellers Reasons NOW Is the time to sell. (3/15/22)
If you’re thinking of selling your house this year, timing is crucial. After all, you’ll want to balance getting the most out of the sale of your current home and making the best investment when you buy your next one. If that’s the case, you should know – you may be able to get the best of both worlds today.
1. The Number of Homes on the Market Is Still Low
There are far more buyers in the market today than there are homes available. Listing your house now makes it the center of attention.
2. Your Equity Is Growing in Record Amounts
Homeowners are sitting on record amounts of equity thanks to recent home price appreciation. That much equity can open doors for you to make a move. It may be just what you need to cover a large portion – if not all – of the down payment on your next home.
3. Mortgage Rates Are Increasing
While recent global uncertainty caused rates to dip slightly in the near-term, experts project rates will rise in the months ahead. When that happens, it’ll cost you more to purchase your next home. That’s why it’s important to act now if you’re ready to sell.
4. Home Prices Are Climbing Too
You have an opportunity to get ahead of the curve by leveraging your growing equity and purchasing your next home before prices climb higher. And, once you make your purchase, you can find peace of mind in knowing ongoing home price appreciation is growing the value of your new investment.
If you want to win when you sell and when you buy, this spring could be your golden opportunity. Text or Call me so you have the insights you need to take advantage of today’s incredible sellers’ market.
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The Average Homeowner Gained More Than $55K in Equity over the Past Year (3/21/22)
If you’re a current homeowner, you should know your net worth just got a big boost. It comes in the form of rising home equity. Equity is the current value of your home minus what you owe on the loan. Today, you’re building that equity far faster than you may expect – and this gain is great news for you.
Here’s how it happened. Home values are on the rise thanks to low housing supply and high buyer demand. When you own a home, the rising prices mean your home is worth more in today’s market. And as home values climb, your equity does too. As Dr. Frank Nothaft, Chief Economist at CoreLogic, explains, “Home prices rose 18% during 2021 in the CoreLogic Home Price Index, the largest annual gain recorded in its 45-year history, generating a big increase in home equity wealth.” According to CoreLogic, the average homeowner’s equity has grown by $55,300 over the last 12 months.
In addition to building your overall net worth, equity can also help you achieve other goals like buying your next home. It works like this: when you sell your house, the equity you built up comes back to you in the sale. In a market where you’re gaining so much equity, it may be just what you need to cover a large portion – if not all – of the down payment on your next home. To find out just how much equity you have in your home and how you can use it to fuel your next purchase, Text or Call me so you can get a professional equity assessment report on your house.
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