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How Misunderstandings About Affordability Could Cost You

by Christie Cannon

How Misunderstandings about Affordability Could Cost You

How Misunderstandings about Affordability Could Cost You | MyKCM
 

There’s a lot of discussion about affordability as home prices continue to appreciate rapidly. Even though the most recent index on affordability from the National Association of Realtors (NAR) shows homes are more affordable today than the historical average, some still have concerns about whether or not it’s truly affordable to buy a home right now.

When addressing this topic, there are various measures of affordability to consider. However, very few of the indexes compare the affordability of owning a home to renting one. In a paper just published by the Urban Institute, Homeownership Is Affordable Housing, author Mike Loftin examines whether it’s more affordable to buy or rent. Here are some of the highlights included.

1. Renters pay a higher percentage of their income toward their rental payment than homeowners pay toward their mortgage.

The report explains:

“When we look at the median housing expense ratio of all households, the typical homeowner household spends 16 percent of its income on housing while the typical renter household spends 26 percent. This is true, you might say, because people who own their own home must make more money than people who rent. But if we control for income, it is still more affordable to own a home than to rent housing, on average.”

Here’s the data from the report shown in a graph:How Misunderstandings about Affordability Could Cost You | MyKCM

2. Renters don’t have extra money to invest in other assets.

The report goes on to say:

“Buying a home is not a decision between investing in real estate versus investing in stocks, as financial advisers often claim. Instead, the home buying investment simply converts some portion of an existing expense (renting) into an investment in real estate.”

It explains that you still have a housing expense (rent payments) even if you don’t buy a home. You can’t live in your 401K, but you can transfer housing expenses to your real estate investment. A mortgage payment is forced savings; it goes toward building equity you will likely get back when you sell your home. There’s no return on your rent payments.

3. Your mortgage payment remains relatively the same over time. Your rent keeps going up.

The report also notes:

“Whereas renters are continuously vulnerable to cost increases, rising home prices do not affect homeowners. Nobody rebuys the same home every year. For the homeowner with a fixed-rate mortgage, monthly payments increase only if property taxes and property insurance costs increase. The principal and interest portion of the payment, the largest portion, is fixed. Meanwhile, the renter’s entire payment is subject to inflation.

Consequently, over time, the homeowner’s and renter’s differing trajectories produce starkly different economic outcomes. Homeownership’s major affordability benefit is that it stabilizes what is likely the homeowner’s biggest monthly expense, assuming a buyer has a fixed-rate mortgage, which most American homeowners do. The only portion of the homeowner’s housing expenses that can increase is taxes and insurance. The principal and interest portion stays the same for 30 years.”

A mortgage payment remains about the same over the 30 years of the mortgage. Here’s what rents have done over the last 30 years:How Misunderstandings about Affordability Could Cost You | MyKCM

4. If you want to own a home and can afford it, waiting could cost you.

As the report also indicates:

“We need to stop seeing housing as a reward for financial success and instead see it as a critical tool that can facilitate financial success. Affordable homeownership is not the capstone of economic well-being; it is the cornerstone.”

Homeownership is the first rung on the ladder of financial success for most households, as their home is most often their largest asset.

Bottom Line

If the current headlines reporting a supposed drop-off in home affordability are making you nervous, let’s connect to go over the real insights into our area.

7 Reasons we’re not in a real estate bubble

by Christie Cannon

Are rapidly rising home prices a warning sign of a real estate bubble? Could the U.S. housing market collapse as it did 14 years ago, triggering a severe recession? Real estate brokers and analysts who pay close attention to market fundamentals say the answer is no.

“I feel very strongly that we are not in a housing bubble simply because of the excessively low inventory,” says Anthony Lamacchia, CEO, Lamacchia Companies, Waltham, Mass. “It is impossible for the housing market to tip over in the next two years.” 

A shortage of homes for sale is just one of the reasons the U.S. housing market will not suddenly slide into a tailspin. Lenders are far more cautious today than they were in 2006-2007 – a time when no-downpayment mortgages and easy credit fueled a wave of speculation, only to result in mass foreclosures when prices collapsed. 

“After 50 years in the real estate business,  this is the first time I have ever seen such a perfect storm,” says Thomas Sbarra, owner and principal, CENTURY 21 Sbarra, Johnson City, New York. “Inventory is at low levels, demand is running wild and prices are still rising pretty much everywhere in the country. While the buying frenzy is like the early 2000s, I think it will be two or three more years before there’s a correction, and the market could just level off.”

An Urban Land Institute survey of 43 economists at real estate organizations found little likelihood of a market meltdown. In fact, the economists projected home prices will grow an average of 4.1 percent over the next three years, above the long-term average of 3.9 percent. In a recent forecast, Fannie Mae projected new and existing home sales will be 6.2 percent high than last year, although the pace of transactions will slow later this year.

“We will certainly see a rebalancing at some point, but no one can predict when,” says Kuba Jewgieniew, CEO and founder of Realty ONE Group, Las Vegas. “I think things are going to calm down,  stabilize and rebalance rather than seeing a bubble that’s going to pop. 

Here are seven reasons the U.S. is not in a housing bubble.

1. Low inventory

Housing sales across the country declined this spring, according to data released by the National Association of Realtors. The primary reason is lack of supply. In March, there were 1.07 million homes for sale, down 28.2 percent from the prior year.  That is far below the 4 million homes on the market in July 2007 during the last housing bubble.

“Our ongoing issues of low inventory, caused in part by the high cost of new builds, will not go away anytime soon,” says Jewgieniew.

With only a 2.1-month supply of inventory for single-family homes in March – well below normal levels – home prices are likely to continue to rise. As Lawrence Yun, chief economist of the National Association of Realtors®, says, “This is not a bubble. It is simply lack of supply.”

2. Lack of supply

Currently, the U.S. housing market is 3.8 million single-family homes short of demand, according to a recent analysis from Freddie Mac. A low level of new home construction over the past three years has increased that shortfall, which was estimated at 2.5 million units in 2018.

New housing starts are rising this spring, but the supply of new homes is projected to remain well below demand. In March, housing starts reached a seasonally adjusted annual rate of 1.739 million units, the highest level since June 2006. Doug Duncan, chief economist for Fannie Mae, says production may decline later this year as homebuilders face supply constraints, such as increasing prices of lumber and other materials.

Overall, the Mortgage Bankers Association (MBA) forecasts single-family housing starts to be around 1.134 million, increasing to 1.165 million single-family homes in 2022 and 1.210 million in 2023. That gradual increase in production will help to ease the current shortage.

3. Favorable demographics

Nearly 5 million millennials will be turning 30 this year, with similar numbers coming in 2022. A significant percentage are looking to buy homes and condominiums – a big change in the market compared with five years ago. 

In fact, millennials are expected to continue to drive the nation’s real estate market for the next decade, spurring demand for starter and move-up homes. Again, strong demand for homes is one of the main reasons a market bubble appears unlikely.

4. Return of international demand

As the COVID-19 pandemic recedes, international travel and home purchases will pick up later in the year. In many states, buyers from Canada, Europe, Asia and the Middle East have sought vacation homes, primary residences and investment properties in the U.S. That global demand for homes – many from all-cash buyers – can buoy many U.S. markets

“There is still a huge influx of foreign capital pouring into the United States as we’re still one of the most stable and attractive countries in the world,” says Jewgieniew. “Now is the time for real estate professionals to create new relationships and networks and grow their opportunities to connect with international clients.”

5. Low mortgage rates

While mortgage rates have begun creeping up, there are no signs of a spike that could bring the home financing process to a halt.  “Real estate professionals should prepare their clients for rates to potentially hit 4 percent, while reassuring them that this is still ridiculously low,” says Jewgieniew.

This spring, the Federal Reserve is supporting housing market by keeping short-term rates low for borrowers – a practice it intends to follow until 2022 at least. The Fed is also purchasing agency mortgage-backed securities (MBS) to stabilize the lending market. Again, there is no sign of a bubble caused by home financing policies.

6. Tight credit

Risky credit practices in the early 2000s were a leading cause of the last housing bubble. Back then, lenders offered loans with “nothing down,” adjustable rates or balloon payments and easy terms to borrowers with marginal credit ratings. At that time, risky loans comprised about 40 percent of the mortgage market, according to a Morgan Stanley report. Currently, those loans are only 2 percent of the market.

7. Greater equity

Rising home prices and greater savings rates have increased equity for millions of U.S. owners. A first quarter report from ATTOM Data Solutions, found that one in three of the 55.8 million mortgaged homes was “equity-rich,” with loans 50 percent or less of estimated market value.

On the other side of the equation, just 2.6 million mortgaged homes were considered seriously underwater, combined loans at least 25 percent more than the value. In addition, distressed sales — including bank-owned (REO) sales, third-party foreclosure auction sales and short sales — accounted for just 5.8 percent of sales, the smallest percentage since 2003 and dramatically below the 42.2 percent in the first quarter of 2009.

A look ahead

Looking ahead to the second half of the year, the pace of home sales may decline and mortgage rates may rise. But those changes should be gradual, rather than bursting a bubble. As Jewgieniew says, “Brokers should be looking forward the future and remember not to be short-sighted. Be sure to have money set aside, especially as there are less and less transactions, and be disciplined with your spending.”

 

Article provided by: Richard Westlund with RealTrends

See the entire article here!

Sellers Are Ready To Enter the Housing Market

by Christie Cannon

Sellers Are Ready To Enter the Housing Market

Sellers Are Ready To Enter the Housing Market | MyKCM
 

One of the biggest questions in real estate today is, “When will sellers return to the housing market?” An ongoing shortage of home supply has created a hyper-competitive environment for hopeful buyers, leading to the ultimate sellers’ market. However, as the economy continues to improve and more people get vaccinated, more sellers may finally be in sight.

The Home Purchase Sentiment Index (HPSI) by Fannie Mae recently noted the percentage of consumer respondents who say it’s a good time to sell a home increased from 61% to 67%. Doug Duncan, Senior Vice President and Chief Economist at Fannie Maeindicates:

Consumer positivity regarding home-selling conditions nearly matched its all-time high.” (See graph below):

Sellers Are Ready To Enter the Housing Market | MyKCMFannie Mae isn’t the only expert group noticing a rise in the percentage of people thinking about selling. George Ratiu, Senior Economist at realtor.comshares:

“The results of a realtor.com survey . . . showed that one-in-ten homeowners plans to sell this year, with 63 percent of those, looking to list in the next 6 months. Just as encouragingly, close to two-thirds of sellers plan to sell their homes at prices under $350,000, which would offer a tremendous boost to affordable housing for first-time buyers.”

Bottom Line

If you’re considering selling your house, don’t wait for more competition to pop up in your neighborhood. Let’s connect today to explore the benefits of selling your house now before more homes come to the market.

3 Graphs Showing Why You Should Sell Your House Now

by Christie Cannon

3 Graphs Showing Why You Should Sell Your House Now

3 Graphs Showing Why You Should Sell Your House Now | MyKCM
 

There’s no doubt that 2021 is the year of the seller when it comes to the housing market. If you’re a homeowner thinking of moving to better suit your changing needs, now is the perfect time to do so. Low mortgage rates are in your favor when you’re ready to purchase your dream home, and high buyer demand may give you the leverage you need to negotiate the best contract terms on the sale of your house. Here’s a look at what’s driving this sellers’ advantage and why there’s so much opportunity for homeowners who are ready to move this season.

1. Historically Low Inventory

The National Association of Realtors (NAR) explains:

 “Total housing inventory at the end of March amounted to 1.07 million units, up 3.9% from February's inventory . . . Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February's 2.0-month supply and down from the 3.3-month supply recorded in March 2020.”

Even with a slight rise in the number of houses for sale this spring, inventory remains near an all-time low (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMHigh buyer interest is creating a major imbalance between supply and demand, but as the small uptick in inventory shows, sellers are beginning to reenter the market. Selling your house now enables you to take advantage of buyer demand and get the most attention for your house – before more listings come to the market later this year.

2. Frequent Bidding Wars

As a result of the supply and demand imbalance, homebuyers are entering bidding wars at an accelerating rate. NAR reports the average number of bids received on the most recently closed sales is 4.8 offers. This number has doubled since the first quarter of 2020 (See graph below):3 Graphs Showing Why You Should Sell Your House Now | MyKCMAs buyers face increasingly tough competition while searching for homes to purchase, they’re more likely to be flexible and generous in their negotiations. This gives a seller the opportunity to choose the best buyer for their needs and be selective about things like time to close, contingencies, renovations, and more. Working with your trusted agent is the best way to determine how to navigate the negotiation process when selling your house.

3. Days on the Market

In today’s market, sellers aren’t waiting very long to find a buyer for their house, either. NAR reports:

Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. 83% of the homes sold in March 2021 were on the market for less than a month.” (See graph below):

3 Graphs Showing Why You Should Sell Your House Now | MyKCMNAR Chief Economist Lawrence Yun explains:

"The sales for March would have been measurably higher, had there been more inventory…Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”

Bottom Line

If you’re thinking about moving, these three graphs clearly show that it’s a great time to sell your house. Let’s connect today so you can learn more about the opportunities in our local area.

Experts Say Home Prices Will Continue to Appreciate

by Christie Cannon

Experts Say Home Prices Will Continue to Appreciate

Experts Say Home Prices Will Continue to Appreciate | MyKCM
 

It’s clear that consumers are concerned about how quickly home values are rising. Many people fear the speed of appreciation may lead to a crash in prices later this year. In fact, Google reports that the search for “When is the housing market going to crash?” has actually spiked 2450% over the past month.

In addition, Jim Dalrymple II of Inman News notes:

“One of the most noteworthy things that came up in Inman’s conversations with agents was that every single one said they’ve had conversations with clients about whether or not the market is heading into a bubble.”

To alleviate some of these concerns, let’s look at what several financial analysts are saying about the current residential real estate market. Within the last thirty days, four of the major financial services giants came to the same conclusion: the housing market is strong, and price appreciation will continue. Here are their statements on the issue:

Goldman Sachs’ Research Note on Housing:

“Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. ... consumer surveys indicate that household buying intentions are now the highest in 20 years. … As a result, the model projects double-digit price gains both this year and next.”

Joe Seydl, Senior Markets EconomistJ.P.Morgan:

“Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”

Morgan Stanley, Thoughts on the Market Podcast:

“Unlike 15 years ago, the euphoria in today's home prices comes down to the simple logic of supply and demand. And we at Morgan Stanley conclude that this time the sector is on a sustainably, sturdy foundation . . . . This robust demand and highly challenged supply, along with tight mortgage lending standards, may continue to bode well for home prices. Higher interest rates and post pandemic moves could likely slow the pace of appreciation, but the upward trajectory remains very much on course.”

Merrill Lynch’s Capital Market Outlook:

“There are reasons to believe that this is likely to be an unusually long and strong housing expansion. Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle. Coronavirus-related preference changes have also sharply boosted home buying demand. At the same time, supply is unusually tight, with available homes for sale at record-low levels. Double-digit price gains are rationing the supply.”

Bottom Line

If you’re concerned about making the decision to buy or sell right now, let’s connect to discuss what’s happening in our local market.

Why Waiting to Buy a Home Could Cost You a Small Fortune

by Christie Cannon

Why Waiting to Buy a Home Could Cost You a Small Fortune

Why Waiting to Buy a Home Could Cost You a Small Fortune | MyKCM
 

Many people are sitting on the fence trying to decide if now’s the time to buy a home. Some are renters who have a strong desire to become homeowners but are unsure if buying right now makes sense. Others may be homeowners who are realizing that their current home no longer fits their changing needs.

To determine if they should buy now or wait another year, they both need to ask two simple questions:

  1. Do I think home values will be higher a year from now?
  2. Do I think mortgage rates will be higher a year from now?

Let’s shed some light on the answers to these questions.

Where will home prices be a year from now?

If you average the most recent projections from the major industry forecasters, the expectation is home prices will increase by 7.7%. Let’s take a house that’s valued today at $325,000 as an example.

If the buyer makes a 10% down payment ($32,500), they’ll end up borrowing $292,500 for their mortgage. Applying the projected rate of home price appreciation, that same house will cost $350,025 next year. With a 10% down payment ($35,003), they’d then have to borrow $315,022.

Therefore, as a result of rising home prices alone, a prospective buyer will have to put down an additional $2,503 and borrow an additional $22,523 just for waiting a year to make their move.

Where will mortgage rates be a year from now?

Today, mortgage rates are hovering around 3%. However, most experts believe they’ll rise as the economy continues to recover. Any increase in the mortgage rate will also increase a purchaser’s cost. Here are the forecasts for the first quarter of 2022 from four major entities:

The projections average out to 3.6% among these four forecasts, a jump up from where they are today.

What does it mean to you if home values and mortgage rates increase?

A buyer will pay a lot more in mortgage payments each month if both of these variables increase. Assuming a buyer purchases a $325,000 home this year with a 30-year fixed-rate loan at 3% after making a 10% down payment, their monthly principal and interest payment would be $1,233.

That same home one year from now could be $350,025, and the mortgage rate could be 3.6% (based on the industry forecasts mentioned above). That monthly principal and interest payment, after putting down 10%, totals $1,432.

The difference in the monthly mortgage payment would be $199. That’s $2,388 more per year and $71,640 over the life of the loan.

Add to that the approximately $25,000 a house with a similar value would build in home equity this year as a result of home price appreciation, and the total net worth increase a purchaser could gain by buying this year is nearly $100,000. That’s a small fortune.

Bottom Line

When asking if they should buy a home, many potential buyers think of the nonfinancial benefits of owning a home. When asking when to buy, the financial benefits make it clear that doing so now is much more advantageous than waiting until next year.

Should I Buy Now or Wait?

by Christie Cannon

Should I Buy Now or Wait? 

Should I Buy Now or Wait? [INFOGRAPHIC] | MyKCM
 

Some Highlights

  • If you’re thinking that waiting a year or two to purchase a home might mean you’ll save some money, think again.
  • Mortgage interest rates are currently very low, but experts across the board are forecasting increases in both home prices and interest rates.
  • Buying a home now means you’ll spend less in the long run. Let’s connect to put your homebuying plans in motion before home prices and mortgage rates climb even higher.

Patience Is the Key to Buying a Home This Year

by Christie Cannon

Patience Is the Key to Buying a Home This Year

Patience Is the Key to Buying a Home This Year | MyKCM
 

The question many homebuyers are facing this year is, “Why is it so hard to find a house?” We’re in the ultimate sellers’ market, which means real estate is ultra-competitive for buyers right now. The National Association of Realtors (NAR) notes homes are getting an average of 4.8 offers per sale, and that number keeps rising. Why? It’s because there are so few houses for sale.

Low inventory in the housing market isn’t new, but it’s becoming more challenging to navigate. Danielle Hale, Chief Economist at realtor.comexplains:

The housing market is still relatively under supplied, and buyers can’t buy what’s not for sale. Relative to what we saw in 2017 to 2019, March 2021 was still roughly 117,000 new listings lower, adding to the pre-existing early-year gap of more than 200,000 fresh listings that would typically have come to market in January or February. Despite this week’s gain from a year ago, we’re 19 percent below the new seller activity that we saw in the same week in 2019.

While many homeowners paused their plans to sell during the height of the pandemic, this isn’t the main cause of today’s huge gap between supply and demand. Sam Khater, Vice President and Chief Economist at Freddie Mac, Economic Housing and Research Division, shares:

The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes . . . That decline has resulted in the decrease in supply of entry-level single-family homes or, ’starter homes.’”

When you consider the number of homes built in the U.S. by decade, the serious lack of new construction is clear (See graph below):Patience Is the Key to Buying a Home This Year | MyKCMThe number of newly built homes is disproportionately lower than the rate of household formation, which, according to the U.S. Census Bureau, has continued to increase. Khater also explains:

Even before the COVID-19 pandemic and current recession, the housing market was facing a substantial supply shortage and that deficit has grown. In 2018, we estimated that there was a housing supply shortage of approximately 2.5 million units, meaning that the U.S. economy was about 2.5 million units below what was needed to match long-term demand. Using the same methodology, we estimate that the housing shortage increased to 3.8 million units by the end of 2020. A continued increase in a housing shortage is extremely unusual; typically in a recession, housing demand declines and supply rises, causing inventory to rise above the long-term trend.”

To catch up to current demand, Freddie Mac estimates we need to build almost four million homes. The good news is builders are working hard to get us there. The U.S. Census Bureau also states:

Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,766,000. This is 2.7 percent (±1.7 percent) above the revised February rate of 1,720,000 . . . Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,739,000. This is 19.4 percent (±13.7 percent) above the revised February estimate of 1,457,000. . . .”

What does this mean? Lawrence Yun, Chief Economist at NAR, clarifies:

The March figure of 1.74 million housing starts is the highest in 14 years. Both single-family units and multifamily units ramped up. After 13 straight years of underproduction – the chief cause for today’s inventory shortage – this construction boom needs to last for at least three years to make up for the part shortfall. As trade-up buyers purchase newly constructed homes, their prior homes will show up in MLSs, and hence, more choices for consumers. Housing starts to housing completion could be 4 to 8 months, so be patient with the improvement to inventory. In the meantime, construction workers deserve cheers.

Bottom Line

If you’re planning to buy this year, the key to success will be patience, given today’s low inventory environment. Let’s connect today to talk more about what’s happening in our area.

4 Tips to Maximize the Sale of Your House

by Christie Cannon

4 Tips to Maximize the Sale of Your House

4 Tips to Maximize the Sale of Your House | MyKCM
 

Homeowners ready to make a move are definitely in a great position to sell today. Housing inventory is incredibly low, driving up buyer competition. This gives homeowners leverage to sell for the best possible terms, and it’s fueling a steady rise in home prices.

In such a hot market, houses are selling quickly. According to the National Association of Realtors (NAR), homes are typically on the market for just 18 short days. Despite the speed and opportunity for sellers, there are still steps you can take to prep your house to shine so you get the greatest possible return.

1. Make Buyers Feel at Home

One of the ways to make this happen is to take time to declutter. Pack away any personal items like pictures, awards, and sentimental belongings. The more neutral and tidy the space, the easier it is for a buyer to picture themselves living there. According to the 2021 Profile of Home Staging by NAR:

“82% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home.”

Not only will your house potentially attract the attention of more buyers and likely sell quickly, but the same report also notes:

“Eighteen percent of sellers' agents said home staging increased the dollar value of a residence between 6% and 10%.”

As Jessica Lautz, Vice President of Demographics and Behavior Insights for NAR, says:

“Staging a home helps consumers see the full potential of a given space or property…It features the home in its best light and helps would-be buyers envision its various possibilities.”

2. Keep It Clean

On top of making an effort to declutter, it’s important to keep your house neat and clean. Before a buyer stops by, be sure to pick up toys, make the beds, and wash the dishes. This is one more way to reduce the number of things that can distract a buyer from the appeal of the home.

Ensure your home smells fresh and clean as well. Buyers will remember the smell of your house, and according to the same report from NAR, the kitchen is one of the most important rooms of the house to focus on if you want to attract more buyers.

3. Give Buyers Access

Buyers are less likely to make an offer on your house if they aren’t able to easily schedule a time to check it out. If your home is available anytime, that opens up more opportunities for multiple buyers to go from curious to eager. It also allows buyers on tight schedules to still get in to see your house.

While health continues to be a great concern throughout the country, it’s important to work with your agent to find the best safety measures and digital practices for your listing. This will drive visibility and create access options that also keep everyone in the process safe.

4. Price It Right

Even in a sellers’ market, it’s crucial to set your house at the right price to maximize selling potential. Pricing your house too high is actually a detriment to the sale. The goal is to drive high attention from competing buyers and let bidding wars push the final sales price up.

Work with your trusted real estate professional to determine the best list price for your house. Having an expert on your side in this process is truly essential.

Bottom Line

If you want to sell on your terms, in the least amount of time, and for the best price, today’s market sets the stage to make that happen. Let’s connect today to determine the best ways to maximize the sale of your house this year.

82,338 Great Reasons to Buy a Home Today

by Christie Cannon

82,338 Great Reasons to Buy a Home Today | MyKCM

 

The financial benefits of buying a home as compared to renting one are always up for debate. However, one element of the equation is often ignored – the ability to build wealth as a homeowner.

Most experts are calling for home prices to continue appreciating over the next several years. The most recent Home Price Expectation Survey, a survey of over one hundred economists, real estate experts, and investment and market strategists, expects home appreciation to increase as follows:

  • 2021: 6%
  • 2022: 4.5%
  • 2023: 4%
  • 2024: 3.6%
  • 2025: 3.5%

Using their annual projections, the graph below shows the equity build-up a purchaser could earn, using a $350,000 home as an example:82,338 Great Reasons to Buy a Home Today | MyKCMA homeowner could increase their net worth by over $80,000 in five years. That’s an average of $16,000 annually. That number should be in any equation determining the financial benefits of owning a home compared to renting.

Bottom Line

Homeowners are going to make a substantial amount of money in home equity over the next five years. If you’re ready to buy a home, let’s connect so you can enjoy this great benefit as well.

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Christie Cannon
Keller Williams Realty
5933 Preston Road #300
Frisco TX 75034
972-215-7747
Fax: 972-215-7748
Keller Williams Frisco - The Christie Cannon Team - http://www.christiecannon.com