The Latest on Inflation: Should You Still Buy a Home?

While the Federal Reserve is working hard to bring down inflation, the latest data shows the inflation rate is still high, remaining around 8%. This news impacted the stock market and added fuel to the fire for conversations about a recession.

You’re likely feeling the impact in your day-to-day life as you watch the cost of goods and services climb. The pinch it’s creating on your wallet and the looming economic uncertainty may leave you wondering: “should I still buy a home right now?” If that question is top of mind for you, here’s what you need to know.

Homeownership Is Historically a Great Hedge Against Inflation

In an inflationary economy, prices rise across the board. Historically, homeownership is a great hedge against those rising costs because you can lock in what’s likely your largest monthly payment (your mortgage) for the duration of your loan. That helps stabilize some of your monthly expenses. James Royal, Senior Wealth Management Reporter at Bankrateexplains:

 

 

And with rents being as high as they are, the ability to stabilize your monthly payments and protect yourself from future rent hikes may be even more important. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains what happened to rents in the latest inflation report:

When you rent, your monthly payment is determined by your lease, which typically renews on an annual basis. With inflation high, your landlord may be more likely to increase your payments to offset the impact of inflation. That may be part of the reason why a survey from realtor.com shows 72% of landlords said they plan to raise the rent on one or more of their properties in the next year.

Becoming a homeowner, if you’re ready and able to do so, can provide lasting stability and a reliable shelter in times of economic uncertainty.

Tips For Buying a Home In the Current Market

If you’re interested in a new home in today’s seller’s housing market, there’s still a considerable amount of planning to be undertaken to make sure you make a sound decision. Here are two tips to help you venture out in the right direction in your search for a home with the right choices.

1. Research and Know Your Options.

Start by studying your local marketplace so you can adjust your budget for your home search. Online real estate search websites let you see the marketplace in the area where you’re planning to buy. Then, find a lender and obtain pre-approval for a mortgage before you begin your house hunt. Pre-approval will consider your financial picture and give you a mortgage limit that you can use to keep tabs on your price range. In a competitive market, having a pre-approved loan may be useful.

2. Explore emerging neighborhoods.

 

 

Neighborhood equity is how desirable a certain neighborhood is for buyers. Issues such as cleanliness, walkability, curb appeal, schools, access to public transit, and overall safety influence buying decisions.

Where to Go From Here

The best hedge against inflation is a fixed housing cost. If you’re ready to learn more and start your journey to homeownership, let’s connect.

How to Get Approved for a Home Loan in Kalamazoo

Things To Avoid After Applying for a Home Loan

Once you’ve applied for a mortgage to buy a home, there are some key things to keep in mind. While it’s exciting to start thinking about moving in and decorating, be careful when it comes to making any big purchases. Here are a few things you may not realize you need to avoid after applying for your home loan.

Don’t Deposit Large Sums of Cash

Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

Don’t Make Any Large Purchases

It’s not just home-related purchases that could disqualify you from your loan. Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income). Since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgage. Resist the temptation to make any large purchases, even for furniture or appliances.

Don’t Co-Sign Loans for Anyone

When you co-sign for a loan, you’re making yourself accountable for that loan’s success and repayment. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.

Don’t Switch Bank Accounts

Lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.

Don’t Apply for New Credit

It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will have an impact on your FICO® score. Lower credit scores can determine your mortgage interest rate and possibly even your eligibility for approval.

Don’t Close Any Accounts

Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those aspects of your score.

In Short, Consult an Expert

To sum it up, be upfront about any changes when talking with your lender. Blips in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. Ultimately, it’s best to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

 

Kalamazoo Home Loan Tips

Tip #1 – Check your credit score

Having an excellent credit score permits you to receive the best deal when looking for a mortgage for your real estate property. We recommend that you order a copy of your credit report so you will be able to see what your credit rating is prior to buying a home. You can then find ways to enhance your credit score if necessary.

Tip #2 – Get your financial documents in order

When you choose to get a mortgage, you will be expected to send a variety of financial documents to your lender. By having these documents prepared beforehand, it will aid the application process.

Tip #4 – Utilize a mortgage calculator

If you’re interested in understanding how your mortgage will work and how you can save money in interest these sheets are perfect for someone looking to fully understand their monthly payments.

Tip #5 – Get pre-qualified

Many real estate agents want prospective clients to be pre-qualified for a mortgage to help them assess their ability to obtain a loan. The mortgage payment prequalification process is fairly simple. Especially important financial information, such as your salary and the condition of your investment funds and savings, is reproduced to calculate the loan qualification. Once you’re pre-qualified, you will have a more clear understanding of how much you are qualified to borrow.

Zac Folsom Group | eXp Realty Long Style Logo

Where to Go From Here

You want your home purchase to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make any major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.

Building Wealth with Home Equity

Home Equity: A Source of Strength for Homeowners Today

Experts agree there’s no chance of a large-scale foreclosure crisis like we saw back in 2008, and that’s good news for the housing market. As Mark Fleming, Chief Economist at First Americansays:

“. . . don’t expect a housing bust like the mid-2000s, as lending standards in this housing cycle have been much tighter and homeowners have historically high levels of home equity, so there likely won’t be a surge in foreclosures.”

Data from the Mortgage Bankers Association (MBA) helps tell this story. It shows the overall percentage of homeowners at risk is decreasing significantly with time (see graph below):

Home Equity: A Source of Strength for Homeowners Today | MyKCMBut even though the volume of homeowners at risk is very low, there is still a small percentage of homeowners who may be coming face to face with foreclosure as a possibility today. If you’re facing difficulties yourself, it can help to understand your options. It starts with knowing what foreclosure is. Investopedia defines it like this:

The good news is there are alternatives available to help you avoid going through the foreclosure process, including:

  • Reinstatement
  • Loan modification
  • Deed-in-lieu of foreclosure
  • Short sale

But before you go down any of those paths, it’s worth seeing if you have enough equity in your home to sell it and protect your investment.

 

You May Be Able To Use Your Equity To Sell Your House

Equity is the difference between what you owe on the home and its market value based on factors like price appreciation.

In today’s real estate market, many homeowners have far more equity in their homes than they realize due to the home price appreciation we’ve seen over the past few years. According to CoreLogic:

“The total average equity per borrower has now reached almost $300,000, the highest in the data series.”

So, what does that mean for you? If you’ve lived in your house for at least a few years or more, chances are your home’s value, and your equity, has risen dramatically. In addition, the mortgage payments you’ve made during that time chipped away at the balance of your loan. If your home’s current value is higher than what you still owe on your loan, you may be able to use that increase to your advantage.

Rick Sharga, Executive VP of Market Intelligence at ATTOM Dataexplains how equity can help:

“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure. . . We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”

What does it mean to have equity in Kalamazoo? Is it the same as cash?

Homeownership and home equity can be viewed as a strategy to increase the accumulation of wealth. As your mortgage debt decreases and your house’s value increases, your property becomes an appreciating asset. Other major purchases don’t usually appreciate the way a house does over time.

Equity denotes the value of your possessions at the end of a 30-year loan period. If you have met all of your loan obligations by the end of the loan term, then you will have 100 equity in your home. If you sell or transfer ownership before the loan or face settlement or bankruptcy, the loan-holder will keep the money.

What is a good home equity loan rate?

You need to take into consideration a number of criteria when looking for a good rate, including your credit score, how much more equity you have, and your location. If you have an average or below average credit score, the interest rate you’re offered might be above the national average. So it will always be wise to consider your options with multiple lenders; that way, you can determine which lender offers the best rate for your situation.

How do I calculate my home equity in Kalamazoo and How much equity can I cash out?

Your home equity quantifies your ownership stake in your home and real estate property. Your home equity is calculated by multiplying your mortgage balance (and any lending) by the home’s current value. For example, if your home is currently valued at $400,000 and you owe $150,000, your home equity would be $250,000.
 
Lenders are inclined to limit the amount of cash you can borrow to 80–85 percent of your typical equity. As an example, if you have $250,000 in equity, you may borrow up to $200,000.

Lean on Experts To Explore Your Options

To find out how much equity you have, work with a local real estate professional. They can give you an estimate of what your house could sell for based on recent sales of similar homes in your area. You may be able to sell your house to avoid foreclosure.

If you find out you have to pursue other options, your agent can help with that too. They’ll be able to connect you with other professionals in the industry, like housing counselors, who can look into your unique situation and offer advice on next steps if selling isn’t your best alternative.

Where to Go From Here

If you’re a homeowner facing hardship, let’s connect so you have an expert on your side to explore your options and see if you can sell your house to avoid foreclosure.

New housing developments in Kalamazoo: Is all-electric the way of the future?

Why It May Be Time To Add Newly Built Homes to Your Search

If you put a pause on your home search because you weren’t sure where you’d go once you sold your house, it might be a good time to get back into the market. If you’re willing to work with a trusted agent to consider a newly built home, you may have even more options and incentives than you realize. That may be why the National Association of Home Builders (NAHB) says the share of buyers looking for new construction is increasing:

“According to the quarterly Housing Trends Report, the popularity of new construction homes is continuing to rebound . . .”

 

Here’s a few reasons more buyers may be drawn to newly built homes.

More Options To Choose from and Potential Builder Incentives

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 has increased this year, it’s still below more typical years like 2019. Currently, according to the National Association of Realtors (NAR), there is a 3.2-month supply at the current sales pace. For reference, a roughly 6-month supply is considered a balanced market, leaving us in a sellers’ market today.

While it’s a smaller segment of the overall inventory of homes for sale, the supply of newly built homes has grown even more. The National Association of Home Builders (NAHB) explains:

New single-family home inventory remained elevated at a 9.2 months’ supply (of varying stages of construction). A measure near a 6 months’ supply is considered balanced.”

 

Here’s why this matters for you. While you have more homes to choose from in either category, there’s one extra benefit of newly built homes. Because the inventory of newly built homes has grown so much, builders are motivated to sell their properties before they build more.

Back in the housing crash of 2008, builders were building too many homes, and that oversupply is part of what contributed to the housing bubble bursting. Now, builders don’t want to have a surplus of inventory in their pipeline, and many are offering buyers incentives to help move that inventory along. As Doug Duncan, Chief Economist at Fannie Maeexplains:

While specifics will vary by builder and market, some buyers are seeing builders reduce prices and offer incentives. To find out what’s available in your area, lean on a trusted real estate professional.

Lifestyle Benefits of Buying a Newly Built Home

In addition to more supply and the potential for builder incentives, newly built homes have various benefits that may suit your lifestyle. For example, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. That can free up time for you to do other things you’re passionate about.

Another perk of a new home is that nothing in the house is used. It’s brand new and uniquely yours from day one. You’ll have all new appliances, windows, roofing, and more. These things can help lower your energy costs, which can add up to significant savings over time. You may even have the latest and greatest technology features built into your new home.

Builder sums up why some buyers today are turning to newly built homes:

If any of these benefits appeal to you, it’s time to connect with a trusted real estate advisor to learn more.

Kalamazoo's Future Housing:  Affordable All-Electric New Homes

Homeowners in Kalamazoo take pleasure in living in energy-efficient homes with every home being constructed to be smart, solar-powered, and electric vehicle (EV) capable. This might sound farfetched, but some residents really like living that way nowadays. In Kalamazoo, homes like this were built as part of Consumers Energy’s super-efficient, all-electric new construction pilot. This pilot was paired with retrofit pilots to help Consumers Energy’s clients get off heating appliances powered solely by fossil fuels in their homes.

What does a Kalamazoo all-electric new home look like?

The pilot includes two phases. Phase 1, beginning in 2020 and completed in 2021, showcased the performance of an energy-efficient, all-electric new home for residents with low- and moderate incomes.

Four affordable, all-electric, single-family homes were built as part of this first phase in collaboration with the Kalamazoo Attainable Homes Partnership (KAHP)—a partnership between the Home Builders Association of Western Michigan, the Kalamazoo Neighborhood Housing Services (KNHS), and Local Initiatives Support Corporation (LISC), whose mission is to build high-quality homes that are attainable in cost and provide homeowners with low-maintenance costs over time.

Phase 2, which kicked off in mid-2020 and runs to this day, was designed to help enlarge on Phase 1 and tackle the learning and scaling issues regarding proponents of an all-electric home. The launch coincided with the expansion of the pilot to include homes, duplexes, and townhome units in non-rural areas with market-rate housing. 

 

 

Where to Go From Here

If you’re considering a newly built home, let’s connect so you have an expert guide on what’s available in our local market. Together we’ll explore your options and the benefits of an all-new home.

Pre-Approval: Key to a Successful Homebuying Journey

Pre-Approval Is a Critical First Step on Your Homebuying Journey

If you’re planning to buy a home or invest in real estate this year, one of the first steps on your journey is getting pre-approved. Especially in today’s housing market when mortgage rates are higher than they were just a few months ago, getting a mortgage pre-approval can be a game changer. Here’s why.

What Is Pre-Approval?

To better understand why pre-approval is key, it’s important to know what pre-approval is. The Mortgage Reports explains it like this:

As part of the pre-approval process, a lender will look at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand your true price range and how much money you can borrow. That can make it easier when you set out to search for homes because you’ll know your overall numbers. And with mortgage rates rising and impacting affordability, a solid understanding of your numbers is even more important.

Pre-Approval Can Signal You’re a Serious Buyer

Another added benefit is that pre-approval lets the seller know you’re qualified to buy their house. A recent article from realtor.com notes:

Even though bidding wars are easing this year as the market shifts, preapproval is still an important part of making a strong offer. It can help a seller feel more confident because it shows you’re serious about their home and that you’re a qualified buyer.

5 Things You Need to Be Pre-Approved for a Mortgage in Kalamazoo

Home shopping commonly begins at a lender’s office with a mortgage application rather than at an open house. The majority of vendors have financing terms and conditions that they are looking for prospective buyers to meet; they frequently have room to negotiate with them if they do.

5 Things You Need To Get A Mortgage Pre-Approved in Kalamazoo

1. Proof of Income

Prospective buyers should provide W-2 forms, pay stubs, income tax returns, year-to-date income, and any additional income sources.

2. Proof of Assets

The lender and the borrower’s bank accounts and income statements reveal that the borrower has sufficient funds to fit a downpayment, closing costs, or reserves on cash. The down payment, expressed as a percentage of the sales price, varies depending on the loan type. Many loans require the buyer to purchase private mortgage insurance (PMI) if they are not putting down 20% or more of the sales price.

3. Good Credit

Most lenders demand a minimum of a FICO score of 620 to approve a conventional loan or a score of 580 to obtain the Federal Housing Administration (FHA) loan. Many banks offer the lowest interest rates on loans to consumers with a high score of 760 or higher.

4. Employment Verification

Lenders will not only verify an individual’s earnings through pay stubs but also will probably call the organization to confirm the individual’s salary and work history.Additional data, such as the borrower’s income stability, the location of the company, the financial strength of the business, and the ability of the business to continue generating and distributing adequate income for the full repayment of debts, can be provided by self-employed borrowers.

5. Other Documentation

The borrower will also need to provide their driver’s license number, Social Security number, and authorization for the lender to pull a credit report.

Where to Go From Here

Getting pre-approved for a mortgage is critical. It helps you better understand what you can borrow and shows sellers you’re serious about purchasing their home. Connect with a local real estate professional and a trusted lender so you have the tools you need to succeed as a homebuyer in today’s market.

 Want to know exactly what a lender is going to be looking for when you purchase a house? You should get our FREE preapproval guide!

VA Loans Offer Opportunities for Veterans to Own a Home

Kalamazoo VA Loans Can Help Veterans Achieve Their Dream of Homeownership

For over 78 years, Veterans Affairs (VA) home loans have provided millions of veterans with the opportunity to purchase homes of their own. If you or a loved one have served, it’s important to understand this program and its benefits.

Here are some things you should know about VA loans before you start the homebuying process.

What Are VA Loans?

VA home loans provide a pathway to homeownership for those who have served our nation. The U.S. Department of Veterans Affairs describes the program like this:

 

Top Benefits of the VA Home Loan Program

In addition to helping eligible buyers achieve their homeownership dreams, VA loans have several other great benefits for buyers who qualify. According to the Department of Veteran Affairs:

  • Qualified borrowers can often purchase a home with no down payment.
  • Many other loans with down payments under 20% require Private Mortgage Insurance (PMI). VA Loans do not require PMI, which means veterans can save on their monthly housing costs.
  • VA-Backed Loans often offer competitive terms and mortgage interest rates.

A recent article from Veterans United sums up just how impactful this loan option can be:

John Bell, Acting Executive Director of the Department of Veterans Affairs Loan Guaranty Service, also explains why this program is so powerful:

“It provides early ownership for many people that would not have that opportunity to begin with. Since there’s no down payment, it allows people to hold their wealth and it gives them the ability to have long term financial security by being able to own a house and let that equity grow.”

 

Kalamazoo County, Michigan VA Loan Information

Purchasing real estate in Michigan is a dream for many folks, however, not every hopeful homebuyer has access the same loan program as the VA homemade loan. The VA loan’s 0-cash down benefit is a significant advantage for homeowners in the state of Michigan, with an average home value over $340,000.

How to get a VA Loan in Kalamazoo

VA loans are made by private lenders and guaranteed by the Department of Veterans Affairs (VA). Because private lenders make the loans, not the VA, you need to find a lender licensed in the state you want to purchase or refinance.

Kalamazoo VA Loan Limits

As of January 1, 2020, Michigan recipients of VA loans will not be limited by VA loan limits in the state of Michigan. This means you can borrow as much as a lender is willing to lend, without needing to provide a down payment. Although veterans not covered by their VA loan entitlement are still subject to Michigan’s VA loan limits.

As of Jan 1, 2022, VA loan limits for all counties in Michigan are $647,200.

VA buyers in Michigan is property taxes

You may be eligible to receive a property tax exemption in Michigan if you meet one of the requirements listed below:

1. A disabled veteran holding a full exemption may receive an exemption if he or she is 100-percent disabled due to service.

2. The state gives a homestead tax credit and property tax reduction for military personnel.

Where to Go From Here

Homeownership is the American Dream. Our veterans sacrifice so much in service of our nation, and one way we can honor and thank them is to ensure they have the best information about the benefits of VA home loans. Thank you for your service.

Is Another Housing Crash on the Horizon?

What’s Ahead for Mortgage Rates and Home Prices?

Now that the end of 2022 is within sight, you may be wondering what’s going to happen in the housing market next year and what that may mean if you’re thinking about buying a home. Here’s a look at the latest expert insights on both mortgage rates and home prices so you can make your best move possible.

Mortgage Rates Will Continue To Respond to Inflation

There’s no doubt mortgage rates have skyrocketed this year as the market responded to high inflation. The increases we’ve seen were fast and dramatic, and the average 30-year fixed mortgage rate even surpassed 7% at the end of last month. In fact, it’s the first time they’ve risen this high in over 20 years (see graph below):

What’s Ahead for Mortgage Rates and Home Prices? | MyKCM

In their latest quarterly report, Freddie Mac explains just how fast the climb in rates has been:

“Just one year ago, rates were under 3%. This means that while mortgage rates are not as high as they were in the 80’s, they have more than doubled in the past year. Mortgage rates have never doubled in a year before.

Because we’re in unprecedented territory, it’s hard to say with certainty where mortgage rates will go from here. Projecting the future of mortgage rates is far from an exact science, but experts do agree that, moving forward, mortgage rates will continue to respond to inflation. If inflation stays high, mortgage rates likely will too.

Home Price Changes Will Vary by Market

As buyer demand has eased this year in response to those higher mortgage rates, home prices have moderated in many markets too. In terms of the forecast for next year, expert projections are mixed. The general consensus is home price appreciation will vary by local market, with more significant changes happening in overheated areas. As Mark Fleming, Chief Economist at First American, says:

“House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.

Basically, some areas may still see slight price growth while others may see slight price declines. It all depends on other factors at play in that local market, like the balance between supply and demand. This may be why experts are divided on their latest national forecasts (see graph below):

What’s Ahead for Mortgage Rates and Home Prices? | MyKCM

 

Housing affordability remains a challenge

The National Association of Home Builders estimates the median price of all new and existing homes sold in the United States rose to $355,000 in the summer of 2021 from $320,000 in the third quarter of 2020.

As a result of skyrocketing prices, it’s getting harder for Americans to afford homes. Just 56.6 percent of homes sold during the third quarter were affordable to families earning a typical income. That was unchanged from the second quarter but down from 63.1 percent in the first quarter of this year and 66 percent in the first quarter of 2020, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.

Mortgage Rates and Home Prices in Kalamazoo

Rising mortgage rates squeezing some Michigan housing markets

Contrary to what others might see, Michigan real estate had not displayed as strong a rise as other areas of the country in recent years. Nevertheless, a new study finds Michigan real estate markets are not seeing as much of in recent months as the rest of the U.S. might be.

ATTOM is a company that tracks the real estate industry. The company’s U.S. Home Sales Report released Thursday shows that returns on median-priced single-family and condo’s house sales in the third quarter reached around 17%, a drop from one year prior. This is the first decline in nearly three years.

Some Michigan real estate markets are also feeling the effects of rising mortgage rates.

Overall, listing prices are going down but good houses are still selling for over asking price. While we’re seeing a small decline in this quarter home prices are still expected to go up next year when interest rates go down. 

What this means is that you shouldn’t lose money purchasing a house right now and anybody who did purchase a couple months ago will rebound from the small drop that we’re seeing in the market right now. 

Where to Go From Here

If you want to know what’s happening with home prices or mortgage rates, let’s connect so you have the latest on what experts are saying and what that means for our area.

Homeownership: The Best Financial Decision You Ever Make

The Majority of Americans Still View Homeownership as the American Dream

Buying a home is a powerful decision, and it remains a key part of the American Dream. In fact, the 2022 Consumer Insights Report from Mynd found the majority of people polled still view homeownership as a key life achievement.

Homeownership has been generally viewed as a central component of the American dream, as home ownership yields several financial advantages to homeowners, including access to credit building equity and reducing housing costs. According to data from the U.S. Census, homeownership has been well above 60% ever since the 1960s.

Despite the vast majority of Americans trying to obtain home ownership, they endure numerous financial obstacles, such as challenges creating an adequate down payment, crippling levels of student loan debt, and issues in accessing credit. In addition to these financial hurdles, high real estate prices in recent times impose further limitations.

Let’s explore just a few of the reasons why so many Americans continue to value homeownership.

The Financial Benefits of Owning a Home

One possible reason real estate ownership is viewed so highly is because owning a home is a significant wealth-building tool, and it provides meaningful financial stability over renting by locking in your monthly housing payments for the length of your home loan. An article from Forbes explains:

Over time, owning a home not only helps boost your own net worth, but it also sets future generations up for success as you pass that wealth down. That may be why the Mynd report also says:

Most Americans (78%) still associate homeownership with the ‘American dream.’ And nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.”

The Non-Financial Benefits of Homeownership

While the financial benefits of real estate ownership are important, becoming a homeowner impacts you on a social and emotional level, too. As Mark Fleming, Chief Economist for First American, says:

Your home provides feelings of achievement, responsibility, and more. 3by30 highlights the top 10 benefits homeowners enjoy. A few non-financial advantages include:

  • Providing you with more freedom and control over your living space
  • Giving you a greater sense of pride
  • Helps with community engagement

Homeownership in Kalamazoo

More and more people are aiming to be a homeowner aims to achieve their dream of homeownership in Kalamazoo. And the reason behind this is the homeownership incentives that they can get to experience in Kalamazoo.

Here are some of the homeownership incentives in Kalamazoo, Michigan.

  • Freddie Mac Home Possible Mortgage 
    Freddie Mac offers the Home Possible Mortgage Program to help home buyers with limited resources afford mortgages. The Home Possible program enables home buyers to buy a home with a down payment as low as 3.0% of the property purchase price and no minimum borrower financial contribution. The Home Possible program is similar to Fannie Mae’s Home Ready Mortgage Program.
  •  NHF Down Payment Assistance
    One of the biggest challenges for homebuyers is coming up with the funds to cover the down payment requirements and/or closing costs associated with a mortgage loan. To bridge that gap, NHF provides down payment and/or closing cost assistance (DPA), up to 5% of the mortgage loan amount.
  • Crowdfund with HomeFundIt
    HomeFundIt is the only crowdfunding program in the nation approved by Fannie Mae and Freddie Mac for use with conventional mortgage loans
  • Landis
    Landis helps renters buy their first home. People can pick out the home of their dreams, rent it for a year (while they build credit and save for a downpayment), then purchase it any time in the first year. Additionally, they offer people tools and incentives to enhance their credit score and build up their down payment.

Where to Go From Here

If your definition of the American Dream involves greater freedom and prosperity, then homeownership could play a major role in helping you achieve that dream. While it may feel challenging to buy a home today as mortgage rates and home prices rise, if the time is right for you, know that there are incredible benefits waiting for you at the end of your journey. You’ll have a place you can grow your wealth, call your own, and feel most comfortable.

Like the National Association of Realtors (NAR) says:

 

 

Get Top Dollar for Your Kalamazoo Home Before Santa Comes!

Sell Your House Before the Holidays

In real estate, is it really a great choice to sell a house before the holiday season?

As you look ahead to the holiday season and the cold winter weather, you’re likely making plans and thinking about what you want to achieve before the year ends. One of those key decision points could be whether or not you want to look for potential buyers and sell house and property and move out. If the location or size of your current home no longer meets your needs, finding a house that better suits your lifestyle may be a top priority for you. But with today’s cooling housing market, is it really a good time to sell your house, or should you wait?

3 reasons you may want to consider selling before the holidays

1. Get One Step Ahead of Other Sellers

Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and deprioritize selling their house until the start of the new year when their schedules and social calendars calm down.

Selling now, while other homeowners may hold off until after the holidays, can help your house stand out. Start the process with a real estate professional today so you can get your house on the market and get ahead of your competition.

2. Get in Front of Serious Buyers This Season

Even though housing supply has increased this year as buyer demand has moderated, it’s still low overall. That means there aren’t enough homes on the market today, especially as the millennial generation reaches their peak homebuying years. As Mark Fleming, Chief Economist at First Americansays:

Serious buyers will still be looking this winter and your house may be exactly what they’re searching for. If you work with an agent to list your house now, you’ll be able to get in front of the eager buyers who are hoping to make a move before the year ends.

3. Seize a Great Chance To Move Up

Don’t forget, today’s homeowners have record amounts of equity. According to CoreLogic, the average amount of equity per mortgage holder has climbed to almost $300,000. That’s an all-time high. That means the equity you have in your house right now could cover some, if not all, of a down payment on the home of your dreams.

And as you weigh the reasons to sell before winter, don’t lose sight of why you’re thinking about moving in the first place. Maybe it’s time to buy a house that’s in a better location for you, has the space you and your loved ones have been craving, or simply gives you that sense of home. A trusted real estate advisor can help you determine how much home equity you have and how you can use it to achieve your goal of making a move.

 

Should you List your House in Kalamazoo this Holiday?

Pros and cons of selling house this holiday season

PROS:

  1. People who look for a home during the holidays are more serious Buyers! This is a big advantage when you sell your house in Kalamazoo before and during the holiday season!
  2. Serious Buyers have fewer houses to choose from during the holidays, and less competition means more money for you! In Kalamazoo, there may be fewer houses to be listed for sale during the holiday season. Thus, you will be one step ahead of your competitors.
  3. Since the supply of listings will dramatically increase in January, there will be less demand for your particular home then.
  4.  Houses show better when decorated for the holidays! If I am a potential buyer, I would love to check a house with festive vibes
  5. Buyers have more time to look for a home during the holidays than they do during the work week!
  6. By selling now, you may have an opportunity to be a non-contingent Buyer during the spring, when many more houses are on the market, for less. This will allow you to sell high and buy low!

CONS:

December is typically a somewhat sluggish time to close a sale, particularly if it involves a real estate closing late in the month. For people at real estate agents, escrow and title companies, bankers, and other lenders, the prospect of a vacation in January or February can make closing the sale a significant challenge.

Even if you have to head to town for business, it can be more difficult to keep your home free of dust or clean or keep your house set up for a showing. Alternatively, if you live somewhere cold or snowy, you may find fewer showing requests when the weather is less than hospitable.

A festive home during the Christmas season can have some unique challenges, as a lot of holiday-themed décor may be difficult to de-personalize. If possible, you might want to switch back from your usual tree and holiday decorations when displaying your home for sale.

 

Where to Go From Here

If you’re thinking about selling your house so you can find a home that better suits your needs, don’t delay your plans. Let’s connect so you can accomplish your goals before winter.

Home Prices Continue to Soar: How Far Will They Go?

Key Factors Affecting Home Affordability Today

What is the most affordable housing for you? How much should you spend to consider it affordable housing?

Every time there’s a news segment about the housing market, we hear about the affordability challenges buyers are facing today. Those headlines are focused on how much mortgage rates have climbed this year. And while it’s true rates have risen dramatically, it’s important to remember they aren’t the only factor in the affordability equation.

An increasing proportion of Americans lament the expense of affordable housing as a rising issue in their local community. In October 2021, 49 percent of U.S. residents expressed discontent with this development, up from 35 percent in early 2018. In a subsequent survey in 2021, 70 percent of U.S. residents stated that young adults are finding it more difficult to purchase their first home than their parents did.

In real estate, housing is deemed affordable if you spend 30 or less of your family income or gross income on it, according to the U.S. Department of Housing and Urban Development.

Here are three measures used to establish affordable housing. It includes home pricesmortgage rates, and wages. Let’s look closely at each one.

3 Measures Used to Establish Affordable Housing

1. Mortgage Rates

This is the factor most people are focused on when they talk about homebuying conditions today. So far, current rates are almost four full percentage points higher than they were at the beginning of the year. As Len Kiefer, Deputy Chief Economist at Freddie Mac, explains:

That increase in mortgage rates is impacting how much it costs to finance a home purchase, creating a challenge for many buyers that’s pricing some out of the market. While the current global uncertainty makes it difficult to project where mortgage rates will go in the future, experts do say that rates will likely remain high as long as inflation does.

2. Home Prices

The second factor at play is home prices. Home prices have made headlines over the past few years because they skyrocketed during the pandemic. Now, the most recent Home Price Index from S&P Case-Shiller shows home values continued to decelerate for a fifth consecutive month (shown in green in the graph below):

Key Factors Affecting Home Affordability Today | MyKCM

This deceleration is happening because higher mortgage rates are moderating demand, and as a result, easing the buyer competition and bidding wars that previously drove prices up.

What’s worth noting though, is how much higher home prices still are than they were before the pandemic (shown in blue in the graph above). Even now, we have a long way to go to get to more normal levels of home price appreciation, which is historically closer to 4%. When both mortgage rates and home prices are high, affordability and your purchasing power become a greater challenge.

But while prices are still elevated in many markets, some areas are seeing slight declines. It all depends on your local market. For insight into what’s happening in your area, reach out to a trusted real estate professional.

3. Wages

The one big, positive component in the affordability equation is the increase in American wages. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have grown over time. This year is no exception.

Key Factors Affecting Home Affordability Today | MyKCM

As the Bureau of Labor Statistics (BLS) reports:

So, when you think about affordability, remember the full picture includes more than just mortgage rates. Home prices and wages need to be factored in as well. Because wages have been rising, they’re a big reason why serious buyers are still purchasing homes this year.

If you have questions or want to learn more, reach out to a trusted advisor who can explain how all of these variables work together and what’s happening in your area. As Leslie Rouda Smith, President of the National Association of Realtors (NAR), says:

Affordable Housing in Kalamazoo, MI

Most renters in Kalamazoo believed that the cost of housing was too high during an Upjohn Institute for Employment Research survey. And with the cost, it makes it hard for them to access affordable housing. 

A major theme of the responses was housing in Kalamazoo, particularly for renters, was found to be unaffordable. About two-thirds of those surveyed who rent housing stated they felt their housing posed an unaffordable cost. Most homeowners, 84.7%, felt their housing was reasonably priced.

Mary Balkema, Kalamazoo County housing director, said the county’s median asking price for a fair market rental is roughly $812 for a worker making less than $15.80 an hour, based on data provided by Kalamazoo Housing Resources Incorporated.

 

Where to Go From Here

To learn more, let’s connect today and make sure you have a trusted lender so you’re able to make an informed decision if you’re planning to buy or sell a home right now.