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Ways Your Home Equity Can Help You Reach Your Goals

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If you’ve owned your house for at least a couple of years, there’s something you’re going to want to know more about – and that’s home equity.

If you’re not familiar with that term, Freddie Mac defines it like this:

“. . . your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.”

That means your equity grows as you pay down your home loan over time and as home values climb. While it’s true home prices dipped slightly last year, they rebounded and have been climbing in many areas since then. Here’s why that price growth is good news for you.

In the latest Equity Insights Report, Selma Hepp, Chief Economist at CoreLogic, explains:

“With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year. And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up.”

And that figure is just for the last year. To help you really understand how that number can add up over time, the report also says the average homeowner with a mortgage has more than $300,000 in equity. That much equity can have a big impact.

Here are a few examples of how you can put your home equity to work for you.

1. Buy a Home That Fits Your Needs

If your current space no longer meets your needs, it might be time to think about moving to a bigger home. And if you’ve got too much space, downsizing to a smaller one could be just right. Either way, you can put your equity toward a down payment on something that fits your changing lifestyle.

2. Reinvest in Your Current Home

And, if you’re not ready to move just yet, you can use the equity you have to improve your current home. But it’s important to consider the long-term benefits certain upgrades can bring to your home’s value. A real estate agent is a great resource on which projects to prioritize to get the greatest return on your investment when you sell later on.

3. Pursue Personal Ambitions

Home equity can also serve as a catalyst for realizing your life-long dreams. That could mean investing in a new business venture, retirement, or funding an education. While you shouldn’t use your equity for unnecessary spending, using it responsibly for something meaningful and impactful can really make a difference in your life.

4. Understand Your Options to Avoid Foreclosure

While the number of foreclosure filings remains below the norm, there are still some homeowners who go into foreclosure each year. If you’re in a tough spot financially, having a clear understanding of your options can help. Equity can act as a cushion if you’re not able to make your mortgage payments on time.

Bottom Line

If you want to know how much equity you have in your home, connect with a local real estate agent. They can do a professional equity assessment report on how much you’ve built up over time and talk you through how you can use it to help you reach your goals.

Read more at KeepingCurrentMatters.com

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Mortgage rate decline pulls buyers back into the housing market

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A sharp drop in mortgage interest rates in December may have kickstarted this year’s spring housing market early.

Rates are about a full percentage point lower than they were in October, and consumers expect they will fall even more.

Optimism about mortgage rates increased sharply in December, according to a monthly consumer survey by Fannie Mae. For the first time since the survey was launched in 2010, more homeowners on net believe rates will go down rather than up, according to Mark Palim, deputy chief economist at Fannie Mae.

“This significant shift in consumer expectations comes on the heels of the recent bond market rally,” said Palim. “Notably, homeowners and higher-income groups reported greater rate optimism than renters.”

The average rate on the 30-year fixed has been on a wild ride since the start of the Covid pandemic. It hit more than a dozen record lows in 2020 and 2021, below 3%, causing a historic run on homebuying and a sharp rise in prices, only to then more than double in 2022. Rates hit a more than 20-year high in October 2023, hovering around 8% before falling back below 7% in December. Rates, however, are still twice what they were three years ago.

Buyers are coming back. Washington, D.C.-area real estate agent Paul Legere hosted two open houses over the weekend — homes in the $1.1 million to $1.2 million price range — and said they were the busiest he’s experienced in the last year.

“Similar report from my co-worker,” he added. “Even on Saturday, during torrential rain, we both had over 10 groups of active shoppers. These were people that had been in the market and had slowed or put their search on hold and are coming back, earnestly looking for a new property.”

Looking for inventory

Legere said he expects to see “an infusion” of inventory in the next week or two. Tight inventory has helped keep prices higher, another hurdle for potential homebuyers.

“Homeowners have told us repeatedly of late that high mortgage rates are the top reason why it’s both a bad time to buy and sell a home, and so a more positive mortgage rate outlook may [incentivize] some to list their homes for sale, helping increase the supply of existing homes in the new year,” said Palim.

A recent report from Redfin, a national real estate brokerage, found demand starting to pick up in December as rates fell. Redfin’s Homebuyer Demand Index — a seasonally adjusted measure of requests for tours and other homebuying services from Redfin agents — was up 10% from a month ago to its highest level since August, according to the report. Pending sales, which measure signed contracts on existing homes, were down 3% from December 2022, but that was the smallest decline in two years.

Much will depend on both interest rates and home prices in the months to come. Prices continue to rise, due to lack of supply, and if rates continue to drop, price gains could accelerate. The lower the rate, the more potential homebuyers can afford.

While mortgage rates are expected to drop further, that will depend on the strength of the economy and inflation.

“The rate momentum is as good as the trajectory of economic data. So if the data continues to do what it has been doing, there’s no reason rates couldn’t go down into the 5′s, possibly even the high 4′s if some of the talking heads are right about recession in 2024,” Matthew Graham, chief operating officer of Mortgage News Daily, said on CNBC’s “The Exchange.”

The average rate on the 30-year fixed mortgage hit a recent low of 6.61% at the end of December, but is up slightly this month to 6.76%, according to Mortgage News Daily.

Read more at CNBC.com

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Why Pre-Approval Is Your Homebuying Game Changer

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If you’re thinking about buying a home, pre-approval is a crucial part of the process you definitely don’t want to skip.

So, before you start picturing yourself in your new living room or dining on your future all-season patio, be sure you’re working with a trusted lender to prioritize this essential step. Here’s why.

While home price growth is moderating and mortgage rates have been coming down in recent weeks, affordability is still tight.  At the same time, there’s a limited number of homes for sale right now, and that means ongoing competition among hopeful buyers. But, if you’re strategic, there are ways to navigate these waters – and pre-approval is the game changer.

What Pre-Approval Does for You

To understand why it’s such an important step, you need to know more about pre-approval. As part of the homebuying process, a lender looks at your finances to determine what they’re 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. Freddie Mac explains it like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Getting pre-approved starts to put you in the mindset of seeing the bigger financial picture, one step at a time. And the key is actually more than just getting a pre-approval letter from your lender. The combination of pre-approval and strategic budgeting is your golden ticket to understanding what you can actually afford. It saves you from painful heartaches down the road so you don’t fall in love with a house that might be out of reach.

Pre-Approval Helps Show Sellers You’re a Serious Buyer

But that’s just the beginning. Let’s face it, there are more people looking to buy than there are homes available for sale, and that creates competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you get ready to make your move. But getting pre-approved for a mortgage can help you stand out from other buyers.

In today’s fast-moving housing market, having that pre-approval in your back pocket can be your secret weapon. When sellers see you’re pre-approved, it tells them you’re a strategic and serious buyer. In a world of multiple offers, that’s a big deal. As an article from the Wall Street Journal (WSJ) says:

“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Pre-approval shows sellers you’re more than just a window shopper. You’re a buyer who’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or issues. Sellers love that because they see your offer as a reliable one. A win-win, right?

Bottom Line

So, before you start mentally arranging furniture in your dream home, let’s connect to get your pre-approval set. It’ll save you time, stress, and a lot of headaches that could come up along the way without it. The reality is, the more prepared you are, the more likely you are to land the home you’re longing for.

Read more at KeepingCurrentMatters.com

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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5 Backyard Touches for Winter

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As the winter months approach, many start to retreat indoors, staying warm and cozy until the spring sun returns.

However, just because the temperatures are dropping doesn't mean you can't utilize your outdoor spaces. With a few simple touches, your backyard can become the perfect winter oasis for relaxation and entertaining. This post will share five backyard touches to enhance your outdoor experience during the colder months.

Patio Fire Pit
Adding a fire pit to your backyard is the perfect way to add warmth, comfort, and entertainment during the winter. A patio fire pit creates a cozy atmosphere for gathering around, roasting marshmallows, and enjoying drinks with friends and family. It's also an opportunity to add a unique design element to your outdoor space, with options ranging from sleek and modern to rustic and natural. Ensure to keep a safe distance from flammable materials and have a fire extinguisher ready.

Outdoor Lighting
The shorter daylight hours of winter make outdoor lighting an essential component to your backyard oasis. Illuminate walkways and seating areas with soft, warm lights to create a welcoming ambiance. Consider adding string lights or lanterns to trees and structures to add a touch of magic to your backyard. For an extra special touch, install heated lighting fixtures to warm your outdoor space while providing adequate light.

Warm Furniture and Accents
Make sure to keep your backyard functional and comfortable during the colder months by adding warm blankets, outdoor rugs and cozy furniture. Embrace the season by adding festive decor like pillows with winter-related patterns and colors. To enhance your outdoor seating area, ensure it is protected from the outdoor elements with a covered pergola, gazebo, or patio umbrella.

Hot Tub
Adding a hot tub to your winter outdoor sanctuary provides an escape from the cold while offering many physical and mental health benefits. Fluffy robes, warm drinks, and snowy views make the ultimate outdoor spa experience to help you relax and unwind. Choose a hot tub with the right size to accommodate guests and ensure you're properly cleaning and maintaining it to keep it running safely and efficiently.

Winter Garden
Add winter garden elements to your outdoor space by planting winter-appropriate produce such as carrots, onions, and garlic. Consider adding garden decor like birdhouses, birdbaths, and frost-proof sculptures to add charm to your garden. By planting evergreens and winter shrubs, not only will you have greenery all year-round, but it creates a winter-focused backdrop for your winter retreat.

These backyard touches will transform your outdoor space into a winter wonderland, making it the perfect spot to relax, entertain, and enjoy all the joys that the season has to offer. By incorporating these touches, you can fully embrace the winter months and enjoy your outdoor space to the fullest. So put on those cozy socks, grab a warm drink, and create your ultimate winter oasis in your own backyard.

Read more at Rismedia.com

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Hello, Himalayan Salt Saunas! Are Wellness Communities the Next Big Trend in Real Estate?

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For decades now, a certain type of homeowner has yearned not just for a house in a nice town—but for one in a development with pools, tennis courts, and game rooms, among other amenities.

Generally, such homes are found in planned communities run by homeowners associations (HOAs).

But these days, more buyers want the benefits of an HOA plus a whole lot more. Think pickleball courts, spas, blueberry picking (yes, you read that right), and Himalayan salt saunas.

Known as wellness communities, these developments offer a range of niceties in addition to fitness and recreational facilities.

“These communities put health and wellness center stage,” says Eric Bramlett, a real estate agent and the owner of Bramlett Residential in Austin, TX.

Is wellness living just a buzz term? Or does this new type of community signify a true shift in the way people want to—and can—live their lives? We reached out to developers, real estate experts, and residents in these communities to find out more.

What exactly is “wellness”?

Wherever you find these developments, you will find a focus on physical and mental health.

“The residents of wellness communities are given the opportunity to engage in regular exercise, which helps boost energy levels and minimizes the risks of disease,” points out David Tully, a real estate agent who has worked with these developments at eXp Realty in Reno, NV. “There are also often programs and facilities dedicated to meditation, yoga, or mindfulness, which helps increase self-awareness and minimizes stress.”

He adds that there are also opportunities to engage in group activities, events, and classes, where residents can connect with each other.

What to expect in a wellness community

Wellness living is still a new category, so the forms it takes can vary considerably.

Embrey Mill, built in 2015 in North Stafford, VA, boasts 10 miles of paths and wooded trails, 285 acres of open space, 15 parks and playgrounds, two resort-style pools, and a full-service bistro, says Erin Smith, senior director of sales and marketing for Brookfield Residential.

There are also community gardens, wash-and-play dog centers, and a dedicated clubhouse with bocce ball courts for residents who are 55+. The community is an all-ages development, with a dedicated section for those 55+.

Wellness living doesn’t necessarily mean a home in the country, though. The Park in Santa Monica, CA, offers a range of luxe amenities focused on wellness. While most of these extras feel fairly standard for a particular type of upper-echelon, 1% lifestyle, others really kick it up a notch.

“We offer everyday amenities like valet parking, on-site storage, and car washes, while also offering a Himalayan salt sauna, meditation rooms, a working library, a 1-acre rooftop with a pool, garden, and dog park,” says co-CEO of Witkoff, Alex Witkoff. “Community is another huge emphasis of wellness-based living. We believe that offering weekly experiences to residents—such as poolside Saturdays, happy hours, movie nights, and other events—promotes stronger social and mental wellbeing.”

What living in a wellness community is really like

Sure, wellness communities sound idyllic. But are they the equivalent of an exercise bike? Once a new resident moves in, are these developments’ amenities used for a few weeks, only to slowly fade into the background as residents return to more sedentary habits?

Not necessarily. Residents insist they’ve seen changes in their physical and mental health as a direct result of where they live.

“Opportunities to escape into deep woods and trails right in our own backyard are a big draw for us,” notes Greg, 62, who prefers to use his first name only for privacy, when explaining his and wife Amanda’s attraction to Serenbe, a wellness community in Chattahoochee Hills, GA.

He’s also coming around to some of the spa amenities on tap: hyperbaric oxygen therapy, cryotherapy, and red-light therapy.

Tina Willis, a personal injury attorney and owner of Tina Willis Law in Winter Garden, FL, says she uses the amenities in her wellness community daily.

“Having a 30-plus-mile rail trail outside my door makes it effortless to maintain a healthy lifestyle, even with my busy schedule as an attorney,” she says.

The cons of living in a wellness community

There are not many disadvantages to having easy spa and hiking-trail access. Still, there could be a few unexpected drawbacks to life in wellness communities.

For instance, there might not be as much diversity in an upscale community as you would encounter in a neighborhood that doesn’t host regular happy hours.

“These communities typically attract individuals having similar demographics, interests, and lifestyles,” notes Tully. “And they also often have stricter rules and regulations than other residential areas, including the appearance of properties, guidelines regarding noise levels, and restrictions on various activities.”

How much does wellness living cost?

If you suspect that living a wellness lifestyle doesn’t come cheap, you are right. Renting a unit in a wellness community starts at around $2,500 and soars into the $10,000-a-month range. Meanwhile, buying a home in one of these developments will start in low- to mid-six figures and can climb well into the multimillion-dollar territory.

Bottom line? Wellness living won’t appeal to everyone; but for a certain homebuyer seeking a direct conduit to health and social connection, it’s the future.

Wellness-centric housing enclaves are popping up across the country, but they’re especially abundant in regions with warmer climates and opportunities for outdoor activities.

Read more at Realtor.com

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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