Real Estate Market Trends Defining the Remainder of 2021

Real estate

Real estateIt’s no secret that the late 2020 and early 2021 housing market has been hot nationwide. While we’ve seen many trends filter in and out over the last several months, experts say there are few that are here to stay:

Inventory problems – Throughout the entirety of 2021, we have seen historically low housing inventory across the US. The low inventory coupled with the high demand for housing has caused buyers to compete for properties offering prices far above the listing price. As we continue into the rest of 2021, low inventory may slightly improve, but for the most part is expected to stay.

Low interest rates – The low interest rates we have seen through 2020 and 2021 caused not only a refinance boom, but also an increase in interest to purchase. While home prices are higher than average, buyers can offset this by locking in a low interest rate. According to real estate professionals, rates are expected to stay relatively low through the rest of the year.

Increased tech – The COVID-19 pandemic forced the mortgage and real estate industries to go digital on many of their processes. While some of this has gone back to the way it was done pre-pandemic, many of the digital processes such as virtual home touring and 3D renderings will likely stick around.

To learn more about trends to look for in the remainder of the 2021 market, click here.

 

Cities Leading the Hot Housing Market

Phoenix, Arizona, USA Downtown Skyline Aerial.

Phoenix, Arizona, USA Downtown Skyline Aerial.

The most recent edition of S&P CoreLogic Case-Shiller Home Price Index reported a 18.6% annual gain in home prices in June, up from 16.8% in May. This marks the third consecutive month of record growth across the U.S. in the 30-year history of the index. According to the report, the largest price gains in recent months were in the following markets:

  • Phoenix, AZ
  • San Diego, CA
  • Chicago, IL
  • Boston, MA
  • Charlotte, NC
  • Cleveland, OH
  • Dallas, TX
  • Denver, CO
  • Seattle, WA

A separate survey conducted by the Federal housing Finance Agency showed that home prices rose almost 5% between the first and second quarters of 2021, which adds to the 40 consecutive quarters of rising home prices. States leading these increases were Idaho, Utah, Arizona, Montana, and Rhode Island.

To learn more, click here.

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Fannie Mae to Include Rent History in Mortgage Approval

Mortgage

MortgageFannie Mae aims to make loans more accessible to homebuyers by including rent payments as part of the mortgage approval process. This action is intended to help borrowers with limited credit histories have better accessibility to home loans.

According to an article by Realtor.com and The Wallstreet Journal, Fannie Mae will start helping lenders factor in borrowers’ history of rent payments with mortgage applications beginning in September. While including rent history will be an option, Fannie Mae does not require lenders to consider rent history if a borrower has a credit score that meets the criteria. Typically, credit reports do not include rent payments as most landlords do not report data to credit-reporting firms.

Speaking about this shift, Hugh Frater, Fannie Mae’s chief executive, said: “In some markets, it’s just as expensive to rent as it is to own. Many renters have the history of making payments, which in my opinion should be equally and fairly considered in their ability to pay a mortgage.

Changes to Fannie Mae’s underwriting system will allow them to automatically identify rent payments from an applicant’s bank account information.

To learn more about this change, click here.

If you are interested in purchasing a home or refinancing your current home, call me today!

America’s 10 Most Affordable Markets

Aerial view of suburban houses and sunset sky - West Chester, Pe

Aerial view of suburban houses and sunset sky - West Chester, PeWith the soaring prices of real estate nationwide, it can be tough to find areas with more reasonably priced homes. A survey was recently conducted by the data team at Realtor.com to identify America’s most affordable metro-area housing markets. After analyzing the 300 largest metros in the U.S., following are the 10 that had the lowest median home price in July 2021:

  1. Pottsville, PA
  2. Peoria, IL
  3. Terre Haute, IN
  4. Youngstown, OH
  5. Huntington, WV
  6. Saginaw, MI
  7. Davenport, IA
  8. Albany, GA
  9. Wichita Falls, TX
  10. Joplin, MO

To learn more about the market in these cities, click here.

Are you interested in purchasing a new home or refinancing your current home? I’d love to help! Call me today.

US Home Prices Jumped During the Second Quarter of 2021

A neighborhood of new homes in a suburban community in the rural

A neighborhood of new homes in a suburban community in the ruralDuring the second quarter of 2021, as extreme demand continued to overwhelm the housing inventory, home prices soared nationwide. According to the National Association of Realtors (NAR), the median sales price for single-family existing homes was higher compared to the second quarter of 2020 in 182 out of the 183 metro areas surveyed. In 94% of those metro areas, prices rose by more than 10% from the year before.

Over the past year, low interest rates and increased remote work have sparked demand in housing across the country. As a result, housing inventory is a record lows, which is driving up home prices. In some areas, prices are increasing so swiftly that they are outweighing the benefits of low mortgage rates. However, experts predict that the market may begin to slow slightly as we move forward into the end of 2021 and beginning of 2022. NAR’s chief economist, Lawrence Yun, said that “the housing market looks to move from ‘super-hot’ to ‘warm,’ with markedly slower price gain.”

For more information on the current market, click here.

Are you interested in purchasing a home or refinancing your current home? I’d love to help! Call me today to set up an appointment so we can review your financial goals.

Emerging Housing Markets of 2021

Emerging Markets

Emerging MarketsHome prices across the nation have reached record highs over the past several months, but experts wonder if the homebuying frenzy will begin to slow and prices will start to decrease soon. Realtor.com® and The Wall Street Journal put together the Emerging Housing Markets Index, which ranks the top 300 largest U.S. metropolitan markets for buyers and investors to purchase a home. This index considered housing demand, home prices, economies, desirable amenities, real estate taxes, and reasonable work commutes.

The top ten markets on the list are:

  1. Billings, MT
  2. Coeur d’Alene, ID
  3. Fort Wayne, IN
  4. Rapid City, SD
  5. Raleigh, NC
  6. Portland, ME
  7. Waco, TX
  8. Johnson City, TN
  9. Bangor, ME
  10. Huntsville, AL

To learn more about this list, click here.

If you are interested in purchasing a new home or refinancing your current home, I would love to help! Call me today to discuss your financing options.

FHFA Drops Adverse Market Fee on Refinances

FHFA

FHFA

On August 1, the Federal Housing Finance Agency (FHFA) will drop the Adverse Market Refinance Fee put in place by Fannie Mae and Freddie Mac. Prior to this change, mortgage lenders had to pay the government sponsored enterprises (GSEs) a fee of 50 basis points when completing a mortgage refinance. FHFA began charging this fee on most refinanced mortgages in 2020 when costs and risks to the agency increased because of COVID-19. This fee became controversial as critics said the policy was a way for GSEs to profit during the refinance boom.

Experts expect this change to positively impact mortgage rates and allow more families to take advantage of the current low-rate environment by refinancing. Speaking about the policy adjustment, FHFA Acting Director Sandra Thompson said, “Today’s action furthers FHFA’s priority of supporting affordable housing while simultaneously protecting the safety and soundness of the Enterprises.” 

Click here to learn more about the elimination of the Adverse Market Refinance Fee.

 Are you interested in learning more about mortgage refinances and if you could benefit from one? Call me today to learn more!

FHA Updates Student Loan Calculation Guidelines to Benefit Homebuyers

Student loan debt

Student loan debt

Historically, homebuyers with student loan debt have had trouble qualifying for mortgages due to their debt-to-income ratio. Recently, the Federal Housing Administration (FHA) adjusted its guidelines to allow more borrowers to qualify for FHA home loans, specifically those with student loan debt.

The new policy removes the previous requirement that a lender must calculate a borrower’s student loan monthly payment based on 1% of the outstanding student loan balance. The policy now bases monthly payment calculations on the actual student loan payment, which is often lower than 1%, allowing more borrowers to qualify. Additionally, if a student loan borrower’s calculated payment is $0, the lender automatically applies 0.5% of the outstanding student loan balance as the assumed payment.

Housing and Urban Development Secretary Marcia L. Fudge commented, “Homeownership is the cornerstone of the American Dream, and the best way to build generational wealth. I am proud that FHA is taking action to make it easier for borrowers with student loan debt to qualify for a federally insured mortgage. This new policy will make a big difference for individuals throughout our nation and is another step in our mandate to promote equity and opportunity for homeownership.”

For more information, click here.

If you have any homebuyers who may be helped by these new guidelines, please let me know! I would love to help them achieve their dreams of homeownership.

Effects of the Pandemic on Millennial Homebuyers

Smiling young couple show house keys moving in together

Smiling young couple show house keys moving in togetherWhile the COVID-19 pandemic brought life to a standstill for most people across the country, it affected the home purchase timeline for millennials in unexpected ways. Record low mortgage rates and stay-at-home orders provided the millennial generation the ability to save money for a down payment and launched them into the purchase market. Nonetheless, the effects of the COVID-19 pandemic made it more challenging to buy a home than some millennial buyers may have anticipated. Following are some effects that the COVID-19 pandemic had on millennial homebuyers:

Longer home searches – Many millennial buyers spent longer than expected searching for homes. Due to lack of inventory and high demand, almost half of millennials surveyed by Angi stated that they spent six months or longer on their home searches.

Bidding wars and increased home prices – Once buyers found homes they loved, many were forced to compete in a multiple-offer situation and pay higher than asking price to purchase the home. The same survey showed two thirds of buyers put in at least four home offers before they had an accepted offer.

Homes requiring improvements – Low inventory led many buyers in search of turnkey homes to recalibrate and purchase homes in need of improvements to create what they were looking for. Angi reported that 56% of millennials purchased a home needing renovation while only 42.4% began their search with that intention.

To read more about the millennial buyer survey results, click here.

Are you interested in purchasing a home or refinancing your current home? I would love to help! Contact me today!

Suburbs With the Most Space for Your Money

View of the sleeping area from panorama from a height Top view of the river by trees and meadows

View of the sleeping area from panorama from a height Top view of the river by trees and meadowsAs Americans spent more time at home last year due to the COVID-19 pandemic, many city dwellers set their sights on the suburbs to capitalize on more space for a lower price tag. Realtor.com created a list of the top suburbs where homebuyers can find the most space for their money. To get this list, researchers examined the ten biggest metro areas in the country and ranked suburbs within a 25-mile commute of the downtowns. The criteria included the median list price for a single-family home of at least 1,800 square feet, and only the suburb with the lowest cost per square foot in each metro area made the cut. Following are the top 5:

  1. Sicklerville, New Jersey (Urban metro: Philadelphia)
  2. Cedar Hill, Texas (Urban metro: Dallas)
  3. Palos Hills, Illinois (Urban metro: Chicago)
  4. Marietta, Georgia (Urban metro: Atlanta)
  5. Jersey Village, Texas (Urban metro: Houston)

Are you interested in purchasing a home or refinancing your current home? I would love to help! Call me today!