How To Buy a Home Without Waiting for Lower Rates

Many people are hoping mortgage rates will come down before they buy a home. But will that actually happen? According to the latest forecasts, experts say rates will decline, but not by as much as a lot of people want.

The good news? Even if they don’t drop substantially, there are still ways to make buying a home more affordable.

How Much Will Rates Drop?

A few months ago, experts were forecasting mortgage rates could dip below 6% by the end of the year. But recent projections suggest that may not happen after all.

While mortgage rates are still expected to decline some later this year, projections from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo now show them stabilizing closer to 6.5% by the end of the year.

That means if you’re holding off on buying a home in hopes of much lower mortgage rates, you may be waiting a while. And if you need to move because something in your life has changed, like a new job, a new baby, or a marriage – waiting that long may not be an option.

Creative Financing Options in Today’s Market

Since rates aren’t expected to decline as much as originally expected, it may be worth considering alternative financing options that could help you get into a home sooner rather than later. Here are three strategies to discuss with your lender to see if any of these make sense for you:

1. Mortgage Buydowns

A mortgage buydown allows you to pay an upfront fee to lower your mortgage rate for a set period of time. This can be especially helpful if you want or need a lower monthly payment early on. In fact, 27% of agents say first-time homebuyers are increasingly requesting buydowns from sellers in order to buy a home right now.

2. Adjustable-Rate Mortgages

Adjustable-rate mortgages (ARMs) typically start with a lower mortgage rate than a traditional 30-year fixed mortgage. This makes them an attractive option, especially if you expect rates to drop in the coming years or plan to refinance later.

And if you remember the housing crash, know that today’s ARMs aren’t like the risky ones back then. Lance Lambert, Co-Founder of ResiClub, helps drive this point home by saying:

“. . . ARM products today are different from many of the products issued in the mid-2000s. Before 2008, lenders often approved ARMs based on borrowers ability to pay the initial lower interest rates. And sometimes they didn’t even check that (remember Ninja loans). Today, adjustable-rate borrowers qualify based on their ability to cover a higher monthly payment, not just the initial lower payment.”

In simple terms, banks used to give loans without checking to see if buyers could afford them. Now, lenders verify income, assets, and jobs, reducing the risks associated with ARMs compared to the past.

3. Assumable Mortgages

An assumable mortgage allows you to take over the seller’s existing loan — including its lower mortgage rate. And with more than 11 million homes qualifying for this option according to U.S. News, it’s worth exploring if you want or need a better rate.

Bottom Line

Waiting for a big decline in mortgage rates may not be the best strategy. Instead, options like buydowns, ARMs, or assumable mortgages could make homeownership more affordable right now. Connect with a local lender to explore what works for you.

Read more at Keeping Current Matters

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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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A Quick Guide To What’s Happening With Colorado’s Property Taxes

When it comes to property taxes, Colorado has been on a wild ride for the past few years. Spiking tax values prompted ballot measures and special legislative sessions, as policymakers and voters struggled to find the right formula to fund schools and local governments without overwhelming homeowners.

All of that led Jan Edwards of Denver to write in to Colorado Wonders recently, asking for help to tease apart exactly what all has happened with property taxes in the past few years. The questions she brought us are ones many Coloradans share.

Edwards bought her townhome in Denver a decade ago. She’s on a fairly fixed income and looking for ways to economize, especially as inflation has made many necessities more expensive. Her rising property taxes don’t make that easy.

“It's a scary time and people are struggling,” Edwards said. “And now their property taxes — what's going to happen here?”

What was the Gallagher Amendment, and how did getting rid of it contribute to the current situation?

Jan said she’d heard that the repeal of the Gallagher Amendment in 2020 is why taxes have spiked so rapidly, but she doesn’t even really remember seeing the issue on the ballot, and wants to understand now what policymakers were thinking when they urged voters to take this step.

For almost 40 years, the Gallagher Amendment acted as a brake on Colorado’s residential property tax rates. It dictated that residential properties would pay no more than 45 percent of the state’s total property taxes, with the rest paid by commercial property owners and others.

Over the years, as housing development boomed, the result was that homes were taxed at a lower and lower rate, to keep the equation in balance. That worked out OK in fast growing-urban areas, but in rural parts of the state where residential growth was slower, schools and local governments saw their tax base erode.

In order to stave off further cuts, Democrats and Republicans joined together in 2020 to ask Coloradans to repeal the amendment, which voters did by about 15 percentage points.

But without that limit on what share of the tax base residential property taxes were responsible for, and as pandemic migration trends caused home values to soar, property taxes spiked much faster than voters possibly ever imagined.

Was there a long term plan for what to do about property taxes, with Gallagher gone?

The short answer is, no. When Gallagher was repealed, neither voters nor lawmakers put anything in its place.

Instead, for the last four years, the legislature has scrambled to stay ahead of the roiling housing market and the ballooning effect it has on tax bills.

In 2021, lawmakers approved a two-year rate reduction.

In 2022, they enhanced and extended that temporary discount for an extra year.

In 2023, Democrats urged voters to pass permanent reductions, essentially paid for out of TABOR refunds. After that effort, known as Prop. HH, failed, Gov. Jared Polis convened a special session to approve more short-term tax reductions.

In 2024, lawmakers first passed a bipartisan, 11th-hour bill to permanently lower tax rates, and then met in another special session to cut them even further, after they came under pressure from a powerful conservative group that threatened to put even deeper cuts to voters at the ballot box

Public officials are hoping that the bill they passed last year will be a permanent fix; it contains a brake that caps how much property tax revenues can grow in a year, theoretically preventing the kinds of spikes the state saw right after the Gallagher repeal.

But then why are property taxes still going up?

There are two reasons Colorado homeowners are likely to still see higher property tax bills next year and beyond.

The first is that property values have continued to rise. They’re not booming the way they were earlier in the decade, but they do tend to increase from year to year, and so tax bills will increase with them.

The second reason is that the discounted rate passed in 2022 is going away. That temporary discount was actually bigger than the permanent savings put in place last year. So when it comes time to pay your taxes in 2026, the typical homeowner will see a several hundred dollar increase as the new rate kicks in. They will, however, be saving money compared to what would have happened if the legislature hadn’t lowered the permanent rate.

Is there anything homeowners can do?

For those who qualify, the Homestead Property Tax Exemption can help lower their tax bills. The exemption applies to people over 65, disabled veterans and Gold Star spouses. To get the exemption, homeowners have to apply to their county assessor.

For everyone, the state operates a program that allows people to defer some or all of the increase in their property tax bills if they grow at more than 4 percent over two years. The program works essentially like a low-income loan, and the deferred taxes will have to be paid back in full, eventually.

Read more at CPR News

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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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Home Depot Sales Beat Expectations. What Does That Tell Us About The Housing Market?

Home Depot posted gains in same store sales for the first time in two years last quarter, according to an earnings report Tuesday morning.

The retailer is often looked to as a bellwether for the home renovation and construction business, which, like the housing market, has been chilled by higher interest rates and inflation.

Home Depot’s upswing in sales exceeded expectations, but the outlook wasn’t all positive.

The renovation market has been on a rollercoaster since the pandemic, from stay-at-home spending sprees to high interest rate retrenchment. Home Depot’s sales grew by about 1% last quarter, which seems to show things are starting to normalize, said Greg Portell, a retail consultant with Kearney.

“I think it is important not to confuse normalization with all of a sudden an uptick. Normalization just allows consumers to have some certainty,” said Portell.

Nick Spector, the owner of Alair Homes in Houston, has noticed a change in his customers as the shock of inflation and higher interest rates has receded.

“We’re seeing a lot of people you know, interested in moving forward with projects that they’ve been thinking about for months or even years, in a lot of cases,” said Spector.

Generally, there’s an uptick in smaller scale renovations. Spector said many homeowners decided to stay put instead of looking for a new house. High prices and mortgage rates have slowed down home sales, which puts a dent in large scale remodels.

“When somebody moves into a new home, there’s typically something that they want to do, whether it’s, ‘We need to blow out these walls and do some major changes,’” said Spector.

A slow housing market will likely keep growth in home renovations low, said Michael Baker, managing director at D.A. Davidson.

“I don’t think we’re out of the woods yet, as relates to the housing market, but it doesn’t seem to be getting worse, and in fact, bouncing along the bottom and maybe getting a little bit better,” said Baker.

He said even if the Federal Reserve doesn’t cut interest rates as quickly as once hoped, rates are unlikely to go up anytime soon.

Though, the new administration has introduced some uncertainties, said Kearney’s Greg Portell.

“The challenge for consumers is going to be, how do you interpret the headlines on things like tariffs, on things like trade, on things like immigration?” said Portell.

If costs for construction labor and raw materials are unpredictable, normalization gets a whole lot harder.

Read more at Marketplace

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How to Make Your Basement More Sustainable

As consumers become increasingly aware of the challenges our planet is facing, a growing number are starting to adopt a more sustainable mindset when it comes to their living spaces.

In a March 2024 survey by the National Association of Realtors, the real estate professionals surveyed say that 5% of their clients are very interested in sustainable home features, while 40% are somewhat interested. And in an April 2023 survey by America At Home Study and Kantar, 46% of respondents say that a home that minimizes the environmental impact is important to their personal wellness.

One area of the home where sustainability may be overlooked, though, is the basement.

Because finishing a basement tends to come with a built-in set of challenges, such as water damage concerns and minimal natural light, it can be difficult to design a basement that lends to maximum sustainability.

Making that effort could help reduce your energy bills once your basement is finished andomake your home more marketable and valuable once the time comes to sell it. With that in mind, here are a few ways you can make your basement more sustainable, whether it’s finished already or you’re looking to turn an unfinished space into a usable living area.

Choose the Right Flooring

It’s etassential to choose the right basement flooring, knowing that these parts of the home may be more prone to flooding than others. That’s why Prasanna Lachagari, design director/partner at SDI Architecture in Boston, recommends sustainable flooring – specifically, a natural stone or porcelain tile. If that doesn’t work for your budget, she recommends a manufactured or engineered floor that does not need to be adhered and contains a large percentage of recycled materials.

“Moisture will degrade adhesive materials, allowing for the floor material to pop up,” she explains. While linoleum is a great green product, since it usually requires gluing, she adds it’s not the most practical choice for a basement floor.

Integrate Natural Elements

Lachagari is a fan of incorporating natural elements into a basement for both sustainability and aesthetics.

“Personally, I love a focus on biophilic design,” she says. “For a basement, I might try a graywater system to recycle water from sinks into a decorative indoor plant wall. Then, with those green walls made up of live plants, maybe build in a rainwater collection system.”

Lachagari says e usfng reclaimed materials and biophilic design gives a basement character and significantly reduces its carbon footprint. As a bonus, if you choose the right materials and prioritize those that address the moisture issue, “you can easily go decades without having to deal with any additional basement work.”

Consider Wool Insulation

Adding insulation to a basement is a great way to reduce energy costs. Although basements often do a good job of staying cooler than the rest of the house in the summer, thee can become chilly in the wintery The proper insulation could result in less heat usage, which is better for the planet and your wallet.

Andrew Legge, CEO of Havelock Wool in Reno, Nevada, suggests using sheep wool insulation in particular.

“Unlike traditional materials, sheep wool is renewable, nontoxic and naturally flame-resistant, offering hard-to-beat health and environmental benefits,” he says. “Wool insulation also absorbs and releases moisture, preventing mold and significantly enhancing indoor air quality.”

Invest in the Right Window Treatments

Basement windows tend to be smaller than the windows you’ll find in the rest of the house. Despite that, they can be a sbignificant source of heat loss and energy inefficiency, says Jocelyne Galaviz, director of training and design at Bloomin' Blinds in Plano, Texas. That’s why she insists it’s important to choose the right window treatments for your basement – ones that limit your energy use.

“Opt for window treatments specifically designed for insulation to help prevent drafts and heat transfer, maintaining a stable temperature in the basement year round,” she says. “Options like cellular shades, thermal lined drapes and insulating shutters can reduce heat loss by up to 40%, lowering energy use and cutting costs.”

Galaviz also recognizes that basements often struggle with limited natural light. To address this, consider dual purpose window treatments. These typically include a sheer fabric that allows natural light in, coupled with a darkening fabric that provides insulation.

“Dual purpose window treatments let homeowners balance natural light while minimizing UV exposure and heat loss, such as dual layered shades or solar shades with drapery. This reduces the need for artificial lighting during the day, lowering electricity use,” she says.

Buy the Right Furniture

Creating a sustainable basement isn’t just a matter of choosing the right fixtures, flooring and insulation. The right furniture can also mtake a space more environmentally friendly, says Amy Granger, director of marketing at Dania Furniture and Scandinavian Designs in Boise, Idaho.

“Sustainability isn’t just a trend. It’s a shift toward creating a home that reflects a responsible lifestyle,” she explains. “Choose furniture made from sustainably sourced materials.”

Also, make sure the furniture you choose doesn't contain chemicals that are harmful to the environment. Certain flame retardants and finishes, for example, can contribute to air pollution, so do your research before furnishing your space.

Install a Dehumidifier

Basements are naturally susceptible to dampness and humidity. Installing a dehumidifier is a simple way to protect your investment and help ensure that the sustainable features you've installed last. A dehumidifier might also improve the air quality of your basement, making it a more comfortable space to spend time in.

Read more at US News

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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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Gen Z seeking inventive homeownership paths

While affordability challenges persist, Gen Z is proving resilient, carving out traditional and non-traditional paths to homeownership — particularly in the Midwest. New data from LendingTree and CoreLogic highlights the struggles and successes of young buyers in today’s real estate landscape.

Young buyers still face an uphill battle

According to a LendingTree analysis of anonymized credit reports, only 3.1 % of Americans under 30 currently hold a mortgage in the nation’s 50 largest metro areas. The disparity in homeownership rates across cities underscores affordability concerns.

In Nashville, Tenn., 9.4% of under-30 residents have a mortgage, while in high-cost areas like San Jose, Calif., that figure drops to just 0.8%.

Home prices and mortgage rates have surged since 2021, putting additional pressure on young buyers.

Despite making up 20.3 % of the adult population in the nation’s 50 largest metros, people under 30 account for just 4.7% of mortgage holders. The highest concentrations of young mortgage holders are in Indianapolis (10.2%), Salt Lake City (9.4%), and Cincinnati (8.9%). Meanwhile, metros like New Orleans, Boston, and San Jose report less than 2.5% of mortgage holders under 30.

Generational home-buying divide

Another striking conclusion from LendingTree is the stark difference in home values sought by younger buyers compared to older buyers. On average, under-30 buyers looked at homes priced at $92,332 — 74.9% lower than the $367,681 average sought by buyers 30 and older.

“We’re currently trapped in a vicious cycle,” said Mark Bizzarro, CEO at New York-based Bizzarro Real Estate Agency. “Many people bought or refinanced at the bottom of the market after the 2006 subprime mortgage collapse, including boomers who are now ready to retire. Usually, retirees downsize and move to smaller homes or senior-living residences.

“But many boomers are aging in place, not wanting to pay today’s interest rates to move into a smaller home. That means the larger homes they live in, which are ideal for raising families, aren’t coming on the market like they usually would. As older people begin to leave their larger homes, the housing shortage should ease for younger Gen Z buyers.”

The biggest home price gaps between Gen Z and older buyers are in:

Providence, R.I.: 88.0% lower than older buyers

Charlotte, N.C.: 86.1% lower

San Francisco: 84.1% lower

The smallest price gaps occur in Buffalo, N.Y. (58.0% lower), Milwaukee (58.5% lower), and Salt Lake City (60.9% lower).

Gen Z Buyers Seek Much Less Expensive Homes

“Gen Z will spend an average of $145,000 on rent by age 30,” said Bizzarro. “In expensive places like New York or San Francisco, that average jumps to over a quarter-million dollars. Where it gets interesting is that if they buy, Gen Z will spend $165,000 on housing by age 30, including mortgage, insurance, taxes and other expenses.

“The difference is that in 15 or 30 years, the homeowner will have an asset they can sell or keep living in so they don’t have a monthly housing payment. The renter, on the other hand, will have to keep spending money and have nothing to show for it.”

Midwest leads Gen Z homeownership growth

Amid high costs, the Midwest has emerged as a stronghold for Gen Z homebuyers. According to CoreLogic’s Loan Application Database, Gen Z accounted for 13% of home purchase applications in 2024, a 3% increase from 2023.

Cities like Des Moines, Iowa, and Omaha, Neb., saw Gen Z make up 21% of home purchase applications, the highest in the nation. Other top metros for young buyers include Youngstown, Ohio (20%), Dayton, Ohio (20%), and Grand Rapids, Mich. (20%).

By contrast, Gen Z representation remains low in expensive coastal metros. In California, San Jose and San Francisco reported the lowest share of Gen Z homebuyers at just 4%, followed by Oxnard (5%). Los Angeles, urban Honolulu, and Bridgeport, Conn., each saw Gen Z account for only 6% of home purchase applications.

Non-traditional homebuying strategies

Beyond location, co-ownership is becoming increasingly common among young buyers. While many Gen Zers purchase homes as single applicants, nearly 45 b % had co-applicants in 2024, according to CoreLogic.

These co-buyers often include friends or family members, with some parents co-signing loans.

“Gen Z is becoming more excited about home buying as renting has become more expensive,” said Bizzarro. “A lot of them are beginning to realize they’re much better off paying their own mortgage than someone else’s. Agents need to expose buyers to grant programs and other money-saving opportunities. There are lots of fantastic city, state and federal programs out there. Many banks are also bringing back closing credits for purchasers. Experienced agents will get Gen Z buyers tapped into the free money that’s available.”

Looking ahead

Despite economic obstacles, Gen Z’s presence in the housing market is expected to grow in the coming years. With interest rates remaining high and inventory limited, affordability will continue to be a challenge. However, experts believe demand will persist in budget-friendly regions.

“Here in New York City and other large metro areas, the bottom line is that building or converting existing buildings to make new homes is exactly what we need,” Bizzarro said. “However, there’s not much land to build on anymore. We have to get more creative.

“A lot of the new homebuilding happening now is on land that’s been rezoned. We need to continue projects like that and expand on them. Governments need to keep looking for more areas to rezone. Several places in New York City aren’t zoned for residential, and if we rezoned them, we could build new housing to help ease demand.”

Read more at Housingwire

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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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