Rent vs Buy – Page 2 – The Real Estate Beat

House Hacks to Buy Real Estate

The biggest challenges for first-time homebuyers in this situation can be twofold: they often struggle to finance their home purchase, and they aren’t sure the best way to make their offer stand out. Below are some different options to discuss when considering a first-time home purchase.

1. Explore Creative Financing
In incredibly competitive markets, getting the money needed to make an offer – particularly one that is over asking price – can be a challenge. Luckily,
These creative financing tricks incorporate a set of strategies that can help clients buy a property with less of their own money used as a down payment and may even lower their monthly note. If buying is a challenge, one can explore the following options:

House-hacking

With the rise in housing costs, sometimes a great way to afford a home is to split the cost – and house-hacking can help. In simplest terms, house-hacking is when someone purchases a piece of real estate – a single-family home or duplex – and leases out one of the bedrooms or units. This rental income can then be applied toward their mortgage. House-hacking may help clients afford a house that may otherwise be out of their price range, or make a mortgage, in general, more affordable.

Having a renter immediately lowers monthly costs and helps pay off a mortgage quickly. Moreover, it can reduce expenses, lower taxable income base, increase savings, and provide passive income. In summation, it gives buyers the usual financial benefits of home ownership – equity, tax deductions – but with the added bonus of having someone to help mitigate the costs. But there are downsides and all aspects should be explored with a Realtor and Real Estate Attorney to understand your Landlord rights.

Co-signers

Another option to explore is having a co-signer, such as a family member, friend, or benefactor who would be willing to help them buy their first home. In the modern economy, it’s common for parents or other interested parties to help people purchase their first home. From simply giving an initial lump sum for a down payment, investing cash to help finance a mortgage, to co-borrowing on the loan, there are a multitude of ways people can help others financially. However, it may be beneficial to take this approach either with someone they know well – like a parent – or codified in a contract.

2. Make Smart Offers
The problem may not be financing their dream home, but helping them stand out in a highly competitive market. If that’s the case, there are some topics to explore to make sure one is staying competitive in a multiple-offers market.

Discuss payment methods

Making a cash offer on a home will leave most sellers with a harder time saying no. It is not a feasible option for everyone, but an all-cash offer is appealing to sellers because they don’t have to hassle with finding a mortgage, it’ll expedite the closing process, and it means instant cash in their pocket. For first-time homebuyers, finding a friend or family member to help finance the property could be a worthwhile feat.

A little extra time

Understanding sellers’ needs can help put an offer at the forefront of their mind. And sometimes, what they need is a little extra time in the house to get their affairs in order. This could look like working out a deal where the sellers stay for free in the house an additional 30 days. Or participating in a leaseback program, where they pay the buyer rent for staying on the property for a set period of time. As buyers are exploring these options and conversations, flexibility and open communication are key.

The Caton Team Knows…

Whether you’re just starting your journey in Real Estate or you’ve bought and sold before you can trust – The Caton Team to be your guides. We’ve built our business on trust, honesty, communication, respect, loyalty, wisdom, and knowledge. Each client is unique – please reach out for a personal consultation or read our blog HERE.

Got Questions? The Caton Team is here to help.

We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out for a personal consultation. Please enjoy our free resources below and get to know our team from our TESTIMONIALS.

Effective. Efficient. Responsive. The Caton Team 🏡 How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

Got Real Estate Questions? The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – wouldn’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

source of article was email received by The Caton Team

The Truths Young Homebuyers Need To Hear – Shared Article

SOURCE

For many young or first-time homebuyers, purchasing a home can feel intimidating. A recent survey shows some homebuyers ages 25 to 40 may be unsure about the homebuying process and what they can afford. It found:

“1 in 4 underestimated their buying potential by $150k or more”
“1 in 4 underestimated the increase in value by $100k or more”
“47% don’t know what a good interest rate is”

Because they feel uncertain, many young homebuyers have given up on their search, or worse, they’ve decided homebuying isn’t for them and never started on their journey to begin with.

If you’re interested in buying but aren’t sure where to begin, here are three key concepts about homeownership you should understand before you get started.

1. What You Need To Know About Down Payments

Saving for a down payment is sometimes viewed as one of the biggest obstacles for homebuyers, but that doesn’t have to be the case. As Freddie Mac says:

“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

According to the most recent Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%. That number is even lower when we control for age – for buyers in the 22 to 30 age range, the median down payment was only 6%.

2. You May Be Able To Afford More Home Than You Think

Working remotely, exercising, and generally spending more time than ever in our homes has changed what many people are looking for in their living space. However, some young homebuyers don’t feel they can afford a home that suits their growing needs and have decided to continue renting instead. That means they’ll miss out on some of the long-term benefits of owning a home. As an article recently published by NAR points out:

“Many young adults are underestimating how much they need for homeownership, the survey finds. Millennials underestimated how much home they can afford right now, how much interest they would pay over a 30-year mortgage, and how much home values appreciate, on average, over 10 years…”

Knowing how much home you can afford when starting the buying process is critical and could be the game-changer that gets you from renting to buying.

3. Homeownership Will Become Less Affordable the Longer You Wait

Finally, with mortgage rates starting to rise along with home prices appreciating, putting off buying a home now could cost you much more later. Sam Khater, Chief Economist at Freddie Mac, notes:

“As the economy progresses and inflation remains elevated, we expect that rates will continually rise in the second half of the year.”

Most experts forecast interest rates will rise in the months ahead, and even the smallest increase can influence your buying power. If you’ve been on the fence about buying a home, there’s no time like the present.

Bottom Line

If you feel overwhelmed by the prospect of starting your home search, you’re not alone. Let’s connect today so we can talk more about the process, what you’ll need to start your search, and what to expect.

The Caton Team knows what it takes to close a successful escrow for our selling clients – that’s why when we represent buyers – we outshine the rest. Read our TESTIMONIALS to learn more about why our clients love us and our unique approach to buying Real Estate in Silicon Valley.

Got Questions? The Caton Team is here to help.

Effective. Efficient. Responsive. The Caton Team 🏡 How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

Got Real Estate Questions? The Caton Team is here to help.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

5 Tips for Making Your Best Offer – Shared Article

SOURCE

In today’s sellers’ market, standing out as a buyer is critical. Multi-offer scenarios and bidding wars are the norm due to the low supply of houses for sale and high buyer demand. If you’re buying this fall, you’ll want every advantage, especially when you’ve found the home of your dreams.

Below are five things to keep in mind when it’s time to make an offer.

1. Know Your Budget

Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. As Freddie Mac puts it:

“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”

Showing sellers you’re serious can give you a competitive edge. It enables you to act quickly when you’ve found your perfect home.

2. Be Prepared To Move Fast

Speed and the pace of sales are contributing factors to today’s competitive housing market. According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), the average home is on the market for just 17 days. As the report notes:

“Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.”

When homes are selling fast, staying on top of the market and moving quickly are key. After you’ve worked with your agent to find the home that suits your needs, they’ll help you put together and submit your best offer as soon as possible.

3. A Real Estate Professional Can Lead You to Victory

No matter what the housing market looks like, rely on a trusted real estate advisor. As Freddie Mac says:

“The success of your homebuying journey largely depends on the company you keep. . . . be sure to select experienced, trusted professionals who will help you make informed decisions and avoid any pitfalls.”

Agents are experts in the local real estate market. They have insight into what’s worked for other buyers in your area and what sellers may be looking for in an offer. It may seem simple, but catering to what a seller may need can help your offer stand out.

4. Craft a Strong, Fair Offer

In the past, offering at or near the asking price was enough to make your offer appealing to sellers. In today’s market, that’s often not the case. According to the latest Realtors Confidence Index from NAR, 50% of offers are above the list price.

In such a competitive market, emotions and prices can run high. Having an agent to help craft a strong, fair offer is critical in these situations. Your agent can help you understand:

The market value of the home
Recent sales trends in the area
Current buyer demand

5. Understand the Seller’s Needs, but Resist Waiving Certain Contingencies

When crafting an offer, you’ll want to keep both your best interest and the interest of the seller in mind. Your trusted real estate advisor will help you consider which levers you could pull, including contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Of course, there are certain contingencies you don’t want to give up, like the home inspection.

Freddie Mac explains:

“Resist the temptation to waive the inspection contingency, especially in a hot market or if the home is being sold ‘as-is’, which means the seller won’t pay for repairs. Without an inspection contingency, you could be stuck with a contract on a house you can’t afford to fix.”

Bottom Line

Today’s competitive housing market makes it more important than ever to make a strong offer on a home. Let’s connect to make sure your offer rises to the top.

The Caton Team knows what it takes to close a successful escrow for our selling clients – that’s why when we represent buyers – we outshine the rest. Read our TESTIMONIALS to learn more about why our clients love us and our unique approach to buyer Real Estate in Silicon Valley.

Got Questions? The Caton Team is here to help.

Effective. Efficient. Responsive. The Caton Team 🏡 How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

Got Real Estate Questions? The Caton Team is here to help.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

Should I Rent or Should I Buy? – Shared Article

SOURCE

Should I Rent or Should I Buy? [INFOGRAPHIC] | Simplifying The Market

Some Highlights

It’s worth considering the many benefits of homeownership before you make the decision to rent or buy a home.
When you buy, you can stabilize your housing costs, own a tangible asset, and grow your net worth as you gain equity. When you rent, you face rising housing costs, won’t see a return on your investment, and limit your ability to save.
If you want to learn more about the benefits of homeownership, let’s connect today.

Each client is unique – please reach out for a personal consultation or read our blog HERE

Got Questions? The Caton Team is here to help.

Effective. Efficient. Responsive. The Caton Team 🏡 How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

Got Real Estate Questions? The Caton Team is here to help.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

Why You Should Consider Condos as Part of Your Home Search – Shared Article

Source

The historically low inventory over the past few years led to challenges for many buyers trying to find a home that met their needs and their budget. If you’re in the same boat, you should know the recent shift in the housing market may have opened up doors for you to restart your search.

The inventory of homes for sale has increased this year, and that’s giving buyers much needed options. As Danielle Hale, Chief Economist at realtor.com, says:

“. . . today’s shoppers have more than 5 homes to consider for every 4 they had at this time a year ago.”

But perspective is important. Overall, housing supply is still low. If you need even more choices, expanding your search by adding additional housing types, like condominiums, could help.

Exploring Condos Could Add Options That Fit Your Budget

One thing to consider is condos generally differ from single-family homes in average space and floorplans. But that size difference is one reason why condos can be a more affordable option. According to a recent report from realtor.com, condo buyers paid roughly 7% less for their home than buyers of other housing types last year. With rising mortgage rates and home prices, the relative affordability of a condo could be worth considering.

Remember, your first home doesn’t have to be your forever home. The important thing is to get your foot in the door as a homeowner. Buying a condo now can springboard you into a bigger home later on. An article from the Urban Institute explains:

“Because condos and co-ops are generally more affordable, they tend to help first-time homebuyers step onto the first rung of the homeownership ladder. These buyers often use the equity on their condo to then purchase a larger single-family home.”

In other words, owning a condo will help you start building wealth in the form of home equity. In time, the equity you build can fuel a future purchase should you decide you want to buy a home with more space or different amenities.

Condo Living Provides Several Great Perks

Boosting the number of options in your budget during your home search is just one reason to consider condos, but there are several other benefits to condo living.

First, they tend to require minimal upkeep and lower maintenance – and that can give you more time to spend doing the things you enjoy. A recent article from Bankrate highlights this, saying:

“Condos can be a good option for anyone who wants to keep home maintenance to a minimum . . . if the roof is leaking or the carpet in the lobby needs to be replaced, that’s not your responsibility — the condo association handles those duties.”

Plus, since many condos are located in or near city centers, they offer the added benefit of being in close proximity to work and leisure. Again, realtor.com explains:

“Buying a condo, which is generally less expensive than a single-family home, enables a household to afford to own in the middle of it all, and often means a newer-built home with less maintenance responsibility.”

Ultimately, owning and living in a condo can be a lifestyle choice. And if that appeals to you, they could give you the added options you need to buy your first home.

Bottom Line

Adding condominiums to your housing search could be a great move. If you’re ready to search condos in your area, connect with a local real estate professional today.

Each client is unique – please reach out for a personal consultation or read our blog HERE

Got Questions? The Caton Team is here to help.

Effective. Efficient. Responsive. The Caton Team 🏡 How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

Got Real Estate Questions? The Caton Team is here to help.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

Pre-Approval in 2023: What You Need To Know – Shared article

Source

One of the first steps in your home buying journey is getting pre-approved. To understand why it’s such an important step, you need to understand what pre-approval is and what it does for you. Business Insider explains:

“In a preapproval [sic], the lender tells you which types of loans you may be eligible to take out, how much you may be approved to borrow, and what your rate could be.”

Basically, pre-approval gives you critical information about the home buying process that’ll help you understand your options and what you may be able to borrow.

How does it work? 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 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 higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.

Pre-Approval Helps Show You’re a Serious Buyer

Another added benefit is pre-approval can help a seller feel more confident in your offer because it shows you’re serious about buying their house. A recent article from Forbes notes:

“From the seller’s perspective, a preapproval [sic] letter from a reputable local lender often can make the difference between accepting and rejecting an offer.”

This goes to show, even though you may not face the intense bidding wars you saw if you tried to buy during the pandemic, pre-approval is still an important part of making a strong offer. In fact, Christy Bieber, Personal Finance Writer at The Motley Fool explains it may be the most important part of making an offer:

“Pre-approval maximizes the chances you’ll be able to actually close the deal – and sellers want to see that.

The fact that a pre-approval gives you a better chance of getting your offer accepted is undoubtedly the most important reason to complete this step . . .”

Bottom Line

Getting pre-approved is an important first step towards buying a home. It lets you know 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 purchase a home in today’s market.

The Caton Team knows what it takes to turn our buyers into homeowners. Let us guide you home.

Got Questions? The Caton Team is here to help.

Effective. Efficient. Responsive. The Caton Team 🏡 How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

Got Real Estate Questions? The Caton Team is here to help.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

Are Interest Rates Stopping You From Buying Real Estate Today? It doesn’t have to…

The news is full of bad news – that’s why The Caton Team is here to change the narrative. Yes – rates did jump 2nd Quarter of 2022 and it rippled through the Real Estate Market. Today – late January 2023, rates have settled down a bit from their nightmarish high of around 7% – today we’re seeing 4.5-6% popping up again.

BUT… it’s still not the 3% we loved in 2021! So, if Buying Bay Area Real Estate is still a goal – when the news says the market is down – now is the time to act – so let’s talk about solutions.

Welcome Home Funding, a division of Berkshire Hathaway HomeServices, is offering two products to help wishful home buyers get into a home while the market is soft – i.e. – that short window when it’s a buyer’s market here in the Bay Area.

Welcome Home Funding is offering a RATE BUY DOWN. Take a look at the example below. Year 1 – the interest rate is nice and low, getting a buyer into a property and each year it goes up a point*.

Next up is the Welcome Home Funding – RATE REBOUND. No one knows when the market will peak or where interest rates will land but with RATE REBOUND a buyer can rest assured that if rates drop further they can take advantage of the lower rate with NO lender fees on the refinance within 5 years of their purchase AND get a $1000 credit to go towards third parties fees associated with refinancing – like the appraisal report and new credit pull. Please note this product has a promotional lifespan. Homes must be IN Contract by 6.30.2023 and Close Escrow by 9.30.23 to qualify. Please note lender fees do apply to the original purchase loan with Welcome Home Funding.

For more information – contact The Caton Team|Cell 650.799.4333| EMAIL|

Or Mike Kamienski with Welcome Home Funding |Cell (650) 484-6488 | EMAIL|

Got Questions? The Caton Team is here to help.

We love what we do and would love to help you navigate your sale or purchase of Residential Real Estate. Please reach out at your convenience for a personal consultation. Please enjoy our free resources below and get to know our team through our clients’ words. Testimonials.

HOW TO SELL | HOW TO BUY

How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

HOW TO SELL during COVID-19 – HOW TO SELL – HOW TO BUY during COVID-19- – HOW TO BUY – MOVING MID PANDEMIC – TRUST AGREEMENTS and HEALTH CARE DIRECTIVES – OUR TESTIMONIALS

Got Real Estate Questions? The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, or concerns, or need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text, or click away!

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Want Real Estate Info on the Go? Download our FREE Real Estate App: Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

Tips To Reach Your Homebuying Goals in 2023 – shared article

SOURCE

If you’re planning to buy a home in 2023, here are a few things to focus on:

Work on your credit and save for a down payment. If saving feels like a challenge, there’s help available.
Then, get pre-approved, create a list of desired features, and prioritize them.
Reach out to a real estate professional so you have expert advice on how to reach your home-buying goals this year.

Got Questions? The Caton Team is here to help.

HOW TO SELL | HOW TO BUY

How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

HOW TO SELL during COVID-19 – HOW TO SELL – HOW TO BUY during COVID-19- – HOW TO BUY – MOVING MID PANDEMIC – TRUST AGREEMENTS and HEALTH CARE DIRECTIVES – OUR TESTIMONIALS

Got Real Estate Questions? The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Want Real Estate Info on the Go? Download our FREE Real Estate App: Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third party information not verified.

What To Expect from the Housing Market in 2023 – shared article

What To Expect from the Housing Market in 2023 – SOURCE

The 2022 housing market has been defined by two key things: inflation and rapidly rising mortgage rates. And in many ways, it’s put the market into a reset position.

As the Federal Reserve (the Fed) made moves this year to try to lower inflation, mortgage rates more than doubled – something that’s never happened before in a calendar year. This had a cascading impact on buyer activity, the balance between supply and demand, and ultimately home prices. And as all those things changed, some buyers and sellers put their plans on hold and decided to wait until the market felt a bit more predictable.

But what does that mean for next year? What everyone really wants is more stability in the market in 2023. For that to happen we’ll need to see the Fed bring inflation down even more and keep it there. Here’s what housing market experts say we can expect next year.

What’s Ahead for Mortgage Rates in 2023?

Moving forward, experts agree it’s still going to be all about inflation. If inflation is high, mortgage rates will be as well. But if inflation continues to fall, mortgage rates will likely respond. While there may be early signs inflation is easing as we round out this year, we’re not out of the woods just yet. Inflation is still something to watch in 2023.

Right now, experts are factoring all of this into their mortgage rate forecasts for next year. And if we average those forecasts together, experts say we can expect rates to stabilize a bit more in 2023. Whether that’s between 5.5% and 6.5%, it’s hard for experts to say exactly where they’ll land. But based on the average of their projections, a more predictable rate is likely ahead (see chart below):

What To Expect from the Housing Market in 2023 | Keeping Current Matters

That means, we’ll start the year out about where we are right now. But we could see rates tick down if inflation continues to drop. As Greg McBride, Chief Financial Analyst at Bankrate, explains:

“. . . mortgage rates could pull back meaningfully next year if inflation pressures ease.”

In the meantime, expect some volatility as rates will likely fluctuate in the weeks ahead. If we see inflation come back under control, that would be good news for the housing market.

What Will Happen to Home Prices Next Year?

Homes prices will always be defined by supply and demand. The more buyers and fewer homes there are on the market, the more home prices will rise. And that’s exactly what we saw during the pandemic.

But this year, things changed. We’ve seen home prices moderate and housing supply grow as buyer demand pulled back due to higher mortgage rates. The level of moderation has varied by local area – with the biggest changes happening in overheated markets. But do experts think that will continue?

The graph below shows the latest home price forecasts for 2023. As the different colored bars indicate, some experts are saying home prices will appreciate next year, and others are saying home prices will come down. But again, if we take the average of all the forecasts (shown in green), we can get a feel for what 2023 may hold.

The truth is probably somewhere in the middle. That means nationally, we’ll likely see relatively flat or neutral appreciation in 2023. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”

Bottom Line

The 2023 housing market is going to be defined by mortgage rates, and rates will be determined by what happens with inflation. The best way to keep a pulse on what experts are projecting for next year is to lean on a trusted real estate advisor.

Got Questions? The Caton Team is here to help.

Interest rates rise and fall – as do our client’s needs. Let us help you determine your Real Estate course, regardless of the market conditions. We stand ready to serve.

HOW TO SELL | HOW TO BUY

How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

HOW TO SELL during COVID-19 – HOW TO SELL – HOW TO BUY during COVID-19- – HOW TO BUY – MOVING MID PANDEMIC – TRUST AGREEMENTS and HEALTH CARE DIRECTIVES – OUR TESTIMONIALS

Got Real Estate Questions? The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, or concerns, need a referral, or some guidance – we are here for you. Contact us at your convenience – we are but a call, text, or click away!

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Want Real Estate Info on the Go? Download our FREE Real Estate App: Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third-party information not verified.

Why Are Things So Tough for First-time Homebuyers?

A little over a decade ago, about half of homes were being sold to first-time buyers.

Things have changed.

Now, only 27% of sold homes are going to first-time buyers. It isn’t that people aren’t interested in purchasing a home – after all, demand for homes was turbocharged during the course of the COVID-19 pandemic.

But first-time homebuyers are having an exceptionally hard time breaking into the market. What gives? Why are a record low proportion of properties being sold to people buying their first home?

1. High Price of Homes

The first reason first-time homebuyers are having a hard time accessing the market is the sky-high price of homes.

Home prices have risen nearly 20% in the past year – representing an unusual and historic surge that disadvantages first-time buyers, who are typically younger, haven’t accumulated housing equity, and don’t have the means to make a sizable down payment.

Whether rising home prices will abate at some point this year is hotly debated, but the price of homes has been juiced by three interrelated factors:

Inventory: Housing inventory remains at a record low, and continued supply chain bottlenecks leaves most experts predicting low inventory for the foreseeable future.
Inflation: Inflation is at its highest rate in 40 years, increasing the price of consumer goods and services – including homes and the materials necessary to build them.
Investors: Investors buy about one-third of homes in the U.S., increasing competition for available homes. Rising inflation could cause even more investors to flood the housing market, as real estate is traditionally seen as a safe investment against devalued currency.

Overall, rising prices is the biggest challenge for anyone – especially those making their first purchase – who wants to buy a home.

2. Rising Interest and Mortgage Rates

The high price of homes alone serves as an impediment for first-time homebuyers. But it’s not the only factor boxing first-time buyers out of the real estate market.

Rising interest and mortgage rates are also squeezing first-time homebuyers especially hard.

Consider a couple buying their first home. They’re targeting a mortgage of $200,000, which is already far lower than the median in many markets. Rising interest rates, which the Federal Reserve introduced to tamp down inflation, have risen from 2.6% to around 5% in the past 16 months. The $200,000 mortgage the buyers are targeting? It’s now more than $200 per month more expensive than it would have been 16 months ago.

Skyrocketing mortgage rates mean that the competition for affordable homes is even higher than before – prospective buyers seem, on average, aware that rates are likely to rise even further in the short and medium-term.

3. Slowing Wage Growth

As if rising home prices and steeper mortgage rates weren’t enough, first-time homebuyers also face the new challenge of apparently slower wage growth.

In the wake of the COVID-19 pandemic, government stimulus, and a historically tight labor market, American wages grew fast. But that wage growth has cooled somewhat in the early part of 2022, with more people working or looking for work and employers feeling less pressure to offer pay increases to bring people into the labor force.

Slower wage growth may be a relief to people concerned about inflation, but is in the short-term a major difficulty for homebuyers, especially those purchasing for the first time. Wages are generally not keeping pace with inflation, and the preexisting high price of homes and rising mortgage rates mean that many young buyers are less equipped to buy than they were months ago.

For the immediate future, first-time homebuyers are likely to struggle to enter the housing market. In the long term, tapering home prices and mortgage rates and increased inventory could make for a friendlier first-time homebuyer market.

To view the original article, visit the Homesnap blog.

Other articles of interest: Is Housing Inventory Finally About to Rise? | Are We in a Real Estate Bubble?

It can feel daunting but it isn’t. It is a journey. The Caton Team believes in Home Ownership for long term wealth and are here every step of the way.

The Caton Team is here to help.

We love what we do and would love to help you navigate your sale or purchase of residential Real Estate. Please reach out at your convenience for a personal consultation. Please enjoy our free resources below and get to know our team through our clients’ words.

HOW TO SELL | HOW TO BUY

How can The Caton Team help You?

Get exclusive inside access when you follow us on Facebook & Instagram

HOW TO SELL during COVID-19 – HOW TO SELL – HOW TO BUY during COVID-19- – HOW TO BUY – MOVING MID PANDEMIC – TRUST AGREEMENTS and HEALTH CARE DIRECTIVES – OUR TESTIMONIALS

Got Real Estate Questions? The Caton Team is here to help.

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

Want Real Estate Info on the Go? Download our FREE Real Estate App: Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts. Information is deemed reliable but not guaranteed. Third party information not verified.

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties

Share this:

1. What You Need To Know About Down Payments

2. You May Be Able To Afford More Home Than You Think

3. Homeownership Will Become Less Affordable the Longer You Wait

Bottom Line

The Caton Team knows what it takes to close a successful escrow for our selling clients – that’s why when we represent buyers – we outshine the rest. Read our TESTIMONIALS to learn more about why our clients love us and our unique approach to buying Real Estate in Silicon Valley.

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties

Share this:

1. Know Your Budget

2. Be Prepared To Move Fast

3. A Real Estate Professional Can Lead You to Victory

4. Craft a Strong, Fair Offer

5. Understand the Seller’s Needs, but Resist Waiving Certain Contingencies

Bottom Line

The Caton Team knows what it takes to close a successful escrow for our selling clients – that’s why when we represent buyers – we outshine the rest. Read our TESTIMONIALS to learn more about why our clients love us and our unique approach to buyer Real Estate in Silicon Valley.

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties

Share this:

Some Highlights

Each client is unique – please reach out for a personal consultation or read our blog HERE

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties

Share this:

Exploring Condos Could Add Options That Fit Your Budget

Condo Living Provides Several Great Perks

Bottom Line

Each client is unique – please reach out for a personal consultation or read our blog HERE

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties

Share this:

Pre-Approval Helps Show You’re a Serious Buyer

Bottom Line

The Caton Team knows what it takes to turn our buyers into homeowners. Let us guide you home.

Read more here > A GUIDE TO BUYING | BUYING INFO

Got Questions? The Caton Team is here to help.

Berkshire Hathaway HomeServices – Drysdale Properties

Share this:

Got Questions? The Caton Team is here to help.

Share this:

Got Questions? The Caton Team is here to help.

Share this:

What’s Ahead for Mortgage Rates in 2023?

What Will Happen to Home Prices Next Year?

Bottom Line

Got Questions? The Caton Team is here to help.

Share this:

1. High Price of Homes

2. Rising Interest and Mortgage Rates

3. Slowing Wage Growth

Share this: