Current Market • Current Market • Home Buying • February 26, 2024

Why ‘Timing the Market’ May Not Be The Best Idea

by Rob Hurt

Although the Fed did not “cooperate” and cut rates as soon as hoped this year, those rate cuts are still projected. We are seeing buyers getting back into the market and expect a FLOOD of buyers once these lower rates hit, and you know what that means, right? With the current low inventory (just under 2 months in Arlington, see chart below), a FLOOD of buyers means multiple offers on the home YOU want, and we are already starting to see more multiple offers. With home prices rising (along with home values) and with the option to refinance when rates drop, doing the math says NOW is likely the best time to get the best value on a new home. If you want to grab a Coke or coffee this week, I can show you the numbers, but in the meantime, I’ll let you check out this article from Realtor Magazine (after the graphic below).

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Article from Realtor Magazine, February 15, 2024 (original link here)

Economist: ‘Timing’ the Market May Not Work for Buyers

Mortgage rates edged up this week, prompting a pause among some would-be house hunters. But here’s why they may not want to wait.

Home shoppers are sensitive to mortgage rates, which was made clear this week with an increase in the average for the 30-year fixed-rate mortgage. The rate rose to 6.77%, and mortgage applications for home purchases fell 3%, according to the Mortgage Bankers Association.

Every notch up and down in rates can impact home buyers’ purchasing power, but borrowing costs have largely stabilized. “While mortgage interest rates edged up weekly, the overall trajectory from fall 2023 is down and is now a full percentage point below the recent high” when rates neared 8%, says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. “While mortgage interest rates may come down to the low 6% range in the middle to later part of the year, buyers must weigh what makes the most sense for them. Timing the real estate market based purely on mortgage interest rates—especially marginal changes—rarely works when new babies, marriages and jobs are the real decision-makers.”

Buyers may not save much by waiting, either. Home buyers purchasing the typical home at $400,000, with a 20% down payment, would likely have a monthly mortgage payment of about $2,080 at this week’s rate average, Lautz says. Last week, when rates averaged 6.64%, home buyers could have paid about $70 less per month—but that was based on a median home price of $391,700.

Home prices are rising quickly. The median price of an existing home surged to an all-time high in December, according to NAR, and prices are expected to continue to climb. The annual median home price is predicted to increase by 1.4% this year, and by another 2.6% in 2025, to $405,200, NAR’s forecast shows. Plus, housing inventory remains at historical lows and remain a major obstacle for would-be home buyers. That will keep pressure on home prices, economists say.

Freddie Mac reports the following national averages for mortgage rates for the week ending Feb. 15:

30-year fixed-rate mortgages: averaged 6.77%, rising from last week’s 6.64% average. Last year at this time, 30-year rate averaged 6.32%.
15-year fixed-rate mortgages: averaged 6.12%, up from last week’s 5.90% average. A year ago, 15-year rates averaged 5.51%.

Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine, editor of the Styled, Staged & Sold blog, and produces a segment called “Hot or Not?(link is external)” in home design that airs on NAR’s Real Estate Today radio show. Follow Melissa on Instagram and Twitter at @housingmuse.

Home Selling • February 12, 2024

Home Equity Can Be a Game Changer When You Sell

by Rob Hurt

Article from Keeping Current Matters, 2/8/24

Are you on the fence about selling your house? While affordability is improving this year, it’s still tight. And that may be on your mind. But understanding your home equity could be the key to making your decision easier. An article from Bankrate explains:

“Home equity is the difference between your home’s value and the amount you still owe on your mortgage. It represents the paid-off portion of your home.

You’ll start off with a certain level of equity when you make your down payment to buy the home, then continue to build equity as you pay down your mortgage. You’ll also build equity over time as your home’s value increases.”

Think of equity as a simple math equation. It’s the value of your home now minus what you owe on your mortgage. And guess what? Recently, your equity has probably grown more than you think.

In the past few years, home prices skyrocketed, which means your home’s value – and your equity – likely shot up, too. So, you may have more equity than you realize.

How To Make the Most of Your Home Equity Right Now

If you’re thinking about moving, the equity you have in your home could be a big help. According to CoreLogic:

“. . . the average U.S. homeowner with a mortgage still has more than $300,000 in equity . . .”

Clearly, homeowners have a lot of equity right now. And the latest data from the Census and ATTOM shows over two-thirds of homeowners have either completely paid off their mortgages (shown in green in the chart below) or have at least 50% equity (shown in blue in the chart below):

That means roughly 70% have a tremendous amount of equity right now.

After you sell your house, you can use your equity to help you buy your next home. Here’s how:

Be an all-cash buyer: If you’ve been living in your current home for a long time, you might have enough equity to buy your next home without having to take out a loan. If that’s the case, you won’t need to borrow any money or worry about mortgage rates. Investopedia states:

“You may want to pay cash for your home if you’re shopping in a competitive housing market, or if you’d like to save money on mortgage interest. It could help you close a deal and beat out other buyers.”

Make a larger down payment: Your equity could also be used toward your next down payment. It might even be enough to let you put a larger amount down, so you won’t have to borrow as much money. The Mortgage Reports explains:

“Borrowers who put down more money typically receive better interest rates from lenders. This is due to the fact that a larger down payment lowers the lender’s risk because the borrower has more equity in the home from the beginning.”

The Easy Way To Find Out How Much Equity You Have

To find out how much equity you have in your home, ask {Rob} for a Professional Equity Assessment Report (PEAR).

Bottom Line

Planning a move? Your home equity can really help you out. Connect with {Rob} to see how much equity you have and how it can help with your next home.

Current Market • Current Market • Current Market • Current Market • Current Market • Current Market • Current Market • Current Market • Current Market • Home Buying • Home Buying • December 20, 2023

Why Mortgage Rates Could Continue to Decline

by Rob Hurt

Check out this article from Keeping Current Matters (original link below):

When you read about the housing market, you’ll probably come across some information about inflation or recent decisions made by the Federal Reserve (the Fed). But how do those two things impact you and your homebuying plans? Here’s what you need to know.

The Federal Funds Rate Hikes Have Stalled

One of the Fed’s primary goals is to lower inflation. In order to do that, they started raising the Federal Funds Rate to slow down the economy. Even though this doesn’t directly dictate what happens with mortgage rates, it does have an impact.

Recently inflation has started to cool, a signal those increases worked and are bringing inflation back down. As a result, the Fed’s hikes have gotten smaller and less frequent. In fact, there haven’t been any increases since July (see graph below):

And not only has the Fed decided not to raise the Federal Funds Rate the last three times the committee met, they’ve signaled there may actually be rate cuts coming in 2024. According to the New York Times (NYT):

“Federal Reserve officials left interest rates unchanged in their final policy decision of 2023 and forecast that they will cut borrowing costs three times in the coming year, a sign that the central bank is shifting toward the next phase in its fight against rapid inflation.”

This indicates the Fed thinks the economy and inflation are improving. Why does that matter to you and your plans to buy a home? It could end up leading to lower mortgage rates and improved affordability.

Mortgage Rates Are Coming Down

Mortgage rates are influenced by a wide variety of factors, and inflation and the Fed’s actions (or as has been the case recently, inaction) play a big role. Now that the Fed has paused the increases, it looks more likely mortgage rates will continue their downward trend (see graph below):

Although mortgage rates may remain volatile, their recent trend combined with expert forecasts indicate they could continue to go down in 2024. That would improve affordability for buyers and make it easier for sellers to move since they won’t feel as locked-in to their current, low mortgage rate.

Bottom Line

The Fed’s decisions have an indirect impact on mortgage rates. By not raising the Federal Funds Rate, mortgage rates are likely to continue declining. Rely on a trustworthy real estate expert (like Rob!) to give you expert advice about changes in the housing market and how they affect you.

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This is not original material. See note/link below.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

Home Selling • December 14, 2023

Why FSBOs Say They Regret Not Using a Real Estate Agent

by Rob Hurt

Article taken from Realtor Magazine.

Home sellers reveal why they decided to bypass professional representation—and the mistakes they made without a trusted adviser.

Homeowners who decline to use a real estate agent to sell their property are twice as likely to say they weren’t satisfied with the selling experience, according to a new survey from Clever Real Estate(link is external) of 1,000 home sellers in 2022 and 2023. Survey respondents say they realize they likely made less money on their home sale and faced more stress by not having a professional representative.

Those who didn’t use a real estate agent said before their transaction that they think pros are overpaid for what they do and are not more knowledgeable about the homeselling process than the average seller. However, when these respondents reflected on their experience after the transaction, they admitted that they made some mistakes without the help of a pro.

More than a third of non-agent sellers, such as FSBOs or those selling to an iBuyer, said the process was more difficult than they expected. What’s more, these sellers admitted:

Buyers distrusted them because they didn’t have an agent (43%).
They struggled to understand their contract (40%).
They made legal mistakes because they didn’t use an agent (36%).

The survey also found other consequences of going it alone as a seller:

Lower sales price: Homeowners who sold without a real estate agent are three times more likely to say they lost money on their home sale. The Clever Real Estate survey found that those who sold their home with an agent tended to earn $46,603 more in average profits than those who sold without an agent in 2022 and 2023. About half of unrepresented sellers say they wish they had priced their home differently, and nearly half now believe their home would have sold for more if they would have used an agent.
Longer selling process: Home sellers without an agent are nearly twice as likely to say they didn’t accept an offer for at least three months; 53% of sellers who used an agent say they accepted an offer within a month of listing their home. Ironically, many homeowners who didn’t use an agent said the primary reason for going it alone was to sell faster.
More stress: Half of home sellers who did not use an agent admit to crying at some point in the process. Fifty-two percent of unrepresented home sellers said they felt overwhelmed by the entire sales process. On the flip side, homeowners who hired an agent were more likely to say they felt good about their sale and expressed less stress.

To be fair, home sellers who used an agent also had some gripes about their experience, albeit much fewer. But those who were unhappy with their agent experience expressed feelings like their agent was only looking to make a sale and didn’t care about their interests, their agent “annoyed” them, or they thought the agent pressured them into decisions, the survey found. That said, 77% of respondents who used an agent say they were satisfied, and 72% say they would use their agent again.

Even as the vast majority of home searches start online, most consumers still use real estate agents to buy or sell a home. Indeed, the National Association of REALTORS®’ 2023 Profile of Home Buyers and Sellers found that 89% of buyers and sellers in the last year used a real estate agent, up from the previous year.

Only 7% of homeowners sold as a FSBO over the last year—which matches the all-time low recorded in 2021, according to NAR data. FSBOs continue to not fare as well in the market as professionally represented homes: FSBOs sold at a median price of $310,000 in the last year, compared to $405,000 for listed homes, NAR’s data shows.

“Having a REALTOR® help you navigate the homebuying and selling process provides peace of mind, especially in a challenging market with high prices, elevated mortgage rates and limited inventory,” says NAR President Tracy Kasper.

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This is not original material. See note/link below.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

Home Ownership • December 4, 2023

Experts Project Home Prices Will Rise over the Next 5 Years

by Rob Hurt

Article by Keeping Current Matters.

Even with so much data showing home prices are actually rising in most of the country, there are still a lot of people who worry there will be another price crash in the immediate future. In fact, a recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them.

To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years.

Experts Project Ongoing Appreciation

While seeing a small handful of expert opinions may not be enough to change your mind, hopefully, a larger group of experts will reassure you. Here’s that larger group.

The Home Price Expectation Survey (HPES) from Pulsenomics is a great resource to show what experts forecast for home prices over a five-year period. It includes projections from over 100 economists, investment strategists, and housing market analysts. And the results from the latest quarterly release show home prices are expected to go up every year through 2027 (see graph below):

And while the projected increase in 2024 isn’t as large as 2023, remember home price appreciation is cumulative. In other words, if these experts are correct after your home’s value rises by 3.32% this year, it should go up by another 2.17% next year.

If you’re worried home prices are going to fall, here’s the big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country for years to come at a pace that’s more normal for the market.

What Does This Mean for You?

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the expert projections from the HPES. Check out the graph below:

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

If you’re someone who’s worried home prices are going to fall, rest assured a lot of experts say it’s just the opposite – nationally, home prices will continue to climb not just next year, but for years to come. If you have any questions or concerns about what’s next for home prices in your local area, connect with a real estate agent.

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This is not original material.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may click on the link at the beginning of this article.

Home Maintenance • December 4, 2023

Interior Painting Tips – Brighten and Modernize on a Budget

by Rob Hurt

Looking to update the interior of your home? Check this article from the National Association of Realtors.

The 60-30-10 Way to Add Color Without Going Overboard
(link to original article)

There’s a formula that can help guide you in bringing more color to warm up a space, while also staying cohesive.

All-white or all-gray interiors are becoming forgettable. More homeowners are adding color with pinks, greens, blues and yellows. But all that color from room to room can make a home feel disjointed and overwhelming.

So how do you add more color while still making it feel cohesive? Designers like to break it down into a formula: 60-30-10. Here’s how it works:

60% of the room should be one color. Consider this your main base color, like using a soft gray or white for your walls. Make this color dominate your space on walls and in larger accents, like an area rug. But you don’t have to use the same hue with everything. Use variations of the color, like a soft or dark gray.

30% should be a complementary color. This should support your main color, but it can still be different enough to add some contrast. Use it for draperies, chairs, accent walls or furniture.
10% should be your accent color. Embrace the latest bright hues, like Pantone’s “Viva Magenta” or Benjamin Moore’s “Raspberry Blush,” a fiery red-orange hue. You don’t have to go bold, however. Your accent color could be black or a natural material, like wood or metal. The main idea is to provide a contrast to your dominant and secondary colors. Weave in your accent color for throw pillows, ottoman, artwork or small decorative accessories.

Moving.com provided a couple of examples for how to use this formula:

Dominant color: White
Secondary color: Gray
Accent: Red

Or:

Dominant color: Gray
Secondary color: White
Accent: Pink

By following a formula, you can embrace color trends while still making a space feel cohesive. The formula helps to strike a balance with color but should be merely used as a guide.

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This is not original material. See link above.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, click the link in the title of this article.

Home Ownership • October 18, 2023

$60,000 Property Tax Cut

by Rob Hurt

If you are a homeowner in Texas, hopefully you are taking advantage of your Homestead Exemption. Did you know this election cycle (Election Day November 7) you will have a chance to vote YES on Proposition 4 which will make this provisional tax bill official? By doing this, you will be decreasing your property tax liability by $60,000! How does that work?

Currently, your Homestead Exemption deducts $40,000 from the assessed value of your home. So, if you owned a home assessed at $350,000, you would only be taxed on $310,000 under the current $40,000 Homestead Exemption. If you vote to make Texas Senate Bill 2 official, the deduction amount will become $100,000 meaning on your same $350,000 home, you would only be taxed on $250,000.

Here’s an overview of the changes that would be applied to 2023 tax bills due in January.

School Tax Compression: Abut $7.1 billion would be sent to Texas school districts in order to lower the taxes they levy on property owners.
Homestead Exemption Increases: From $40,000 to $100,000 as explained above.
Texas Homeowners 65+ or with Disabilities: Both groups would be eligible for a total exemption of $110,000.
Temporary 20% Appraisal Cap: For appraisals on commercial, mineral and residential properties valued under $5 million which do not have a homestead exemption.
Franchise Tax Exemptions: The amount of money a business can make before it’s required to pay the state’s franchise tax (levied on larger entities doing business in Texas) would double.
Elected Appraisal Officials: 3 new positions will be created in each appraisal district’s board of directors for position elected by voters.

So, would you like a $60,000 property tax cut? If so, you need to vote. Early voting is October 23 to November 3. Election Day is November 7. You will need to bring ID to vote, and here are the 7 types of valid ID Texas has for voters:

Texas driver’s license
Texas personal identification card
Election identification certificate
Texas license to carry a handgun
US military ID card with photo
Us citizenship certificate with photo
US passport

Links for more information:

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Proposition 4 Ballot Language:

“The constitutional amendment to authorize the legislature to establish a temporary limit on the maximum appraised value of real property other than a residence homestead for ad valorem tax purposes; to increase the amount of the exemption from ad valorem taxation by a school district applicable to residence homesteads from $40,000 to $100,000; to adjust the amount of the limitation on school district ad valorem taxes imposed on the residence homesteads of the elderly or disabled to reflect increases in certain exemption amounts; to except certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations; and to authorize the legislature to provide for a four-year term of office for a member of the board of directors of certain appraisal districts.”

First Time Home Buyers • October 2, 2023

Rent-To-Own New Construction Home Program

by Rob Hurt

Current Market • First Time Home Buyers • September 12, 2023

With these interest rates, is it a good time to buy my first house?

by Rob Hurt

Hey, this is Rob, Your Realtor, and today I want to address the question, “With these interest rates, is it a good time to buy my first house?” The short answer is YES and I’m about to tell you why.

Today’s interest rate (September 12) of 7.12% for a 30-year, fixed rate mortgage and this has some people holding off or at least hesitating on making that new home purchase believing, as the experts predict, interest rates will drop towards the end of the year and into next year. But if you are ready to move (especially if you are renting), is this the best option? It is the best option, and here’s why.

Historically speaking, we are still below the 50-year interest rate average (see chart above). Still, 7+% interest may feel high, especially after the pandemic market, but have you considered that, as a renter, you are paying 100% interest? Zero percent of your monthly payment is going toward premium on your home and building equity. Every month that you continue to pay rent, you are losing equity that you could be building in your home.

You may look at that and say, “OK, but if rates may drop, shouldn’t I wait?” If rates could drop, the question becomes, “How can I purchase now to begin building equity in my own home and benefit if/when rates drop?” That’s a GREAT question, and a solution that might work for you is buying down the rate. You may be familiar with rate buy-downs, but the one I am talking about specifically is the 2-1 buy down. The way this works is, you “buy” this rate reduction and pay for it up front at closing. For the first year of your loan, you get a 2% interest rate reduction on your house payments. In the second year, you get a 1% interest rate reduction. The third year, you are paying the interest rate you got with your loan BUT…if interest rates have dropped by this time, you can refinance to the lower rate, and you will have been building equity for yourself/your family because you own a home and are not paying rent on someone else’s home.

In another video I will tell you about the incredible buy-down deal another client of mine got moving into their new-construction home. AND, I’ll talk about a strategy we could use to get the seller to pay YOUR rate buy down. I’m Rob, your Realtor and my passion as an agent is helping renters become homeowners. Let’s have a conversation to see how I might be able to help YOU move into your own home. You can reach out through any of my social media platforms, or all my contact information may be found on my website rob-hurt.com. I would love to join you on your home ownership journey, let’s talk!

Home Ownership • August 24, 2023

People Want Less Expensive Homes – And Builders Are Responding

by Rob Hurt

In today’s housing market, there are two main affordability challenges impacting buyers: mortgage rates that are higher than they’ve been the past couple of years, and rising home prices caused by low inventory. To overcome those challenges, many people are working with their agents to find less expensive homes. And with newly built homes making up a historically large percentage of the total available inventory today, that search often includes brand new homes.

People Are Spending Less on Newly Built Homes

The graph below uses the latest information from the Census to show, in June, more of the newly built home sales in this country were in lower price ranges than in 2022:Last year, only 58% of newly built home sales were less than $500,000. This June, that number was up to 65%. This means more people are buying less expensive newly built homes right now while affordability remains a challenge.

Builders Are Offering Lower-Cost Options

Builders have picked up on this trend and are reacting accordingly. George Ratiu, Chief Economist at Keeping Current Matters, explains:

“Builders are also responding to this shift by bringing slightly smaller homes to market in an effort to meet lower price points . . .”

New data from the Census further confirms this pattern – it shows the median sales price of newly built homes has dipped down in recent months (see graph below):And as Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, says, the builders who are most responsive to this trend are forming pathways to homeownership:

“. . . it is creating opportunities for people to be able to afford an entry-level home in an area. . . . if you get that size down, that automatically will make it a more affordable home. The [builders] that are decreasing [size] the most are probably the ones that try to build more of an affordable product.”

How an Agent Can Help

Builders producing smaller, less expensive newly built homes give you more affordable options at a time when that’s really needed. If you’re hoping to buy a home soon, partner with a local real estate agent to find out what’s available in your area. An agent can help you look at newly built homes or ones under construction nearby.

Bottom Line

If you’re having a hard time finding a home you like in your budget, connect with a real estate professional. You need an agent who knows all about the latest inventory in your area, including homes still under construction or just built. That way you have an expert on your side who can provide information on builder reputations, builder contracts and negotiations, and more to help you with the homebuying process.

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This is not original material. See note/link below.

When I find an article I believe will be helpful to my friends and clients, I post it here on my blog. If you would like to read this article from the original source, you may find it here.

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Economist: ‘Timing’ the Market May Not Work for Buyers

How To Make the Most of Your Home Equity Right Now

The Easy Way To Find Out How Much Equity You Have

Bottom Line

The Federal Funds Rate Hikes Have Stalled

Mortgage Rates Are Coming Down

Bottom Line

Experts Project Ongoing Appreciation

What Does This Mean for You?

Bottom Line

Looking to update the interior of your home? Check this article from the National Association of Realtors. The 60-30-10 Way to Add Color Without Going Overboard (link to original article)

People Are Spending Less on Newly Built Homes

Builders Are Offering Lower-Cost Options

How an Agent Can Help

Bottom Line

Looking to update the interior of your home? Check this article from the National Association of Realtors.

The 60-30-10 Way to Add Color Without Going Overboard
(link to original article)