Maryland and DC Real Estate and Community News

Nov. 29, 2022

The Ireland Group - What's Ahead for Mortgage Rates and Home Prices?

The Ireland Group -

What’s Ahead for Mortgage Rates and Home Prices?

What’s Ahead for Mortgage Rates and Home Prices? | MyKCM

Now that the end of 2022 is within sight, you may be wondering what’s going to happen in the housing market next year and what that may mean if you’re thinking about buying a home. Here’s a look at the latest expert insights on both mortgage rates and home prices so you can make your best move possible.

Mortgage Rates Will Continue To Respond to Inflation

There’s no doubt mortgage rates have skyrocketed this year as the market responded to high inflation. The increases we’ve seen were fast and dramatic, and the average 30-year fixed mortgage rate even surpassed 7% at the end of last month. In fact, it’s the first time they’ve risen this high in over 20 years (see graph below):

What’s Ahead for Mortgage Rates and Home Prices? | MyKCM

In their latest quarterly report, Freddie Mac explains just how fast the climb in rates has been:

“Just one year ago, rates were under 3%. This means that while mortgage rates are not as high as they were in the 80’s, they have more than doubled in the past year. Mortgage rates have never doubled in a year before.

Because we’re in unprecedented territory, it’s hard to say with certainty where mortgage rates will go from here. Projecting the future of mortgage rates is far from an exact science, but experts do agree that, moving forward, mortgage rates will continue to respond to inflation. If inflation stays high, mortgage rates likely will too.

Home Price Changes Will Vary by Market

As buyer demand has eased this year in response to those higher mortgage rates, home prices have moderated in many markets too. In terms of the forecast for next year, expert projections are mixed. The general consensus is home price appreciation will vary by local market, with more significant changes happening in overheated areas. As Mark Fleming, Chief Economist at First American, says:

“House price appreciation has slowed in all 50 markets we track, but the deceleration is generally more dramatic in areas that experienced the strongest peak appreciation rates.

Basically, some areas may still see slight price growth while others may see slight price declines. It all depends on other factors at play in that local market, like the balance between supply and demand. This may be why experts are divided on their latest national forecasts (see graph below):

What’s Ahead for Mortgage Rates and Home Prices? | MyKCM

Bottom Line

If you want to know what’s happening with home prices or mortgage rates, let’s connect so you have the latest on what experts are saying and what that means for our area.

Posted in Market Updates
Nov. 8, 2022

The Ireland Group - The Cost of Waiting for Mortgage Rates To Go Down

The Ireland Group -

The Cost of Waiting for Mortgage Rates To Go Down

The Cost of Waiting for Mortgage Rates To Go Down | MyKCM

Mortgage rates have increased significantly in recent weeks. And that may mean you have questions about what this means for you if you’re planning to buy a home. Here’s some information that can help you make an informed decision when you set your homebuying plans.

The Impact of Rising Mortgage Rates

As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.

Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is $389,500). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.

The Cost of Waiting for Mortgage Rates To Go Down | MyKCM

As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a real estate advisor to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.

Are Mortgage Rates Going To Go Down?

The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. Realtor.com says this about where rates could go from here:

“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.

So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get inflation under control.

And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”

Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining equity over time which will help grow your net worth. The question now becomes: what makes more sense for you?

Bottom Line

Each person’s situation is unique. To make the best decision for you, let's connect to explore your options.

Posted in Market Updates
Sept. 30, 2022

The Ireland Group - What Experts Say Will Happen with Home Prices Next Year

The Ireland Group -

What Experts Say Will Happen with Home Prices Next Year

What Experts Say Will Happen with Home Prices Next Year | MyKCM

Experts are starting to make their 2023 home price forecasts. As they do, most agree homes will continue to gain value, just at a slower pace. Over the past couple of years, home prices have risen at an unsustainable rate, leaving many to wonder how long it would last. If you’re asking yourself: what’s ahead for the price of my home, know that experts are now answering this question, and its welcome news for homeowners who may have been led by the media to believe their home would lose value.

Historically, home prices have appreciated at a rate near 4%. For 2023, the average of six major forecasters noted below is 2.5%. While one, Zelman & Associates, is calling for depreciation, the other five are calling for appreciation. The graph below outlines each expert forecast to show where they project home prices are going in the coming year.

What Experts Say Will Happen with Home Prices Next Year | MyKCM

To understand why experts are calling for appreciation next year, look to the economics of supply and demand. Dave Ramsey, Financial Expert, says this:

“The root issue of what drives house prices almost always is supply and demand . . .”   

Two things are driving home prices upward. First, the undersupply of homes on the market is an issue we continue to face in this country. We still don’t have enough homes on the market for the number of people that want to buy them. To further that point, we’re still in a sellers’ market nationally, and in that scenario, home prices tend to appreciate.

Second, millennials are moving through their peak homebuying years. Since they’re the largest demographic behind the baby boomers, demand isn’t going away any time soon.

Bottom Line

Experts are calling for home prices to appreciate next year, although at a slower pace than the previous three years. The reason for this is simple. The dynamics of supply and demand are playing out in real estate and will continue for many years to come.

Posted in Market Updates
Sept. 30, 2022

The Ireland Group - Top Reasons Homeowners Are Sellinng Their Houses Right Now

The Ireland Group -

Top Reasons Homeowners Are Selling Their Houses Right Now

Top Reasons Homeowners Are Selling Their Houses Right Now | MyKCM

Some people believe there’s a group of homeowners who may be reluctant to sell their houses because they don’t want to lose the historically low mortgage rate they have on their current home. You may even have the same hesitation if you’re thinking about selling your house.

Data shows 51% of homeowners have a mortgage rate under 4% as of April this year. And while it’s true mortgage rates are higher than that right now, there are other non-financial factors to consider when it comes to making a move. In other words, your mortgage rate is important, but you may have other things going on in your life that make a move essential, regardless of where rates are today. As Jessica Lautz, Vice President of Demographics and Behavioral Insights at the National Association of Realtors (NAR), explains:

Home sellers have historically moved when something in their lives changed – a new baby, a marriage, a divorce or a new job. . . .”

So, if you’re thinking about selling your house, it may help to explore the other reasons homeowners are choosing to make a move today. The 2022 Summer Sellers Survey by realtor.com asked recent home sellers why they decided to sell. The visual below breaks down how those homeowners responded:

Top Reasons Homeowners Are Selling Their Houses Right Now | MyKCM

As the visual shows, an appetite for different features or the fact that their current home could no longer meet their needs topped the list for recent sellers. Additionally, remote work and whether or not they need a home office or are tied to a specific physical office location also factored in, as did the desire to live close to their loved ones.

The realtor.com survey summarizes the findings like this:

The primary reason homeowners decided to sell in the last year was the realization that, after so much time spent at home, they wanted different features and amenities, such as walkability, outdoor space, pool, etc. . . . 

If you, like the homeowners they surveyed, find yourself wanting features, space, or amenities your current home just can’t provide, it may be time to consider listing your house for sale.

Even with today’s mortgage rates, your lifestyle needs may be enough to motivate you to make a change. The best way to find out what’s right for you is to partner with a trusted real estate professional who can provide expert guidance and advice throughout the process. They can help walk you through your options, so you can make a confident decision based on what matters most to you and your loved ones.

Bottom Line

While the financial reasons for moving are important, there’s often far more to consider. Non-financial reasons can also be a significant motivating factor. If you need help weighing the pros and cons of selling your house, let’s connect today.

Posted in Market Updates
Sept. 30, 2022

The Ireland Group - Watching the Stock Market? Check the Value of Your Home for Good News

The Ireland Group -

Watching the Stock Market? Check the Value of Your Home for Good News.

Watching the Stock Market? Check the Value of Your Home for Good News. | MyKCM

While watching the stock market recently may have started to feel pretty challenging, checking the value of your home should come as welcome relief in this volatile time. If you’re a homeowner, your net worth got a big boost over the past few years thanks to rising home prices. And that increase in your wealth came in the form of home equity. Here’s how it works.

Equity is the current value of your home minus what you owe on the loan. Because there was a significant imbalance between the number of homes available for sale and the number of buyers looking to make a purchase over the past few years, home prices appreciated substantially. And while rising inventory and mortgage rates have cooled the market some in recent months, home prices nationally remain strong.

That’s why, according to the latest Homeowner Equity Insights from CoreLogicthe average homeowner equity has grown by $60,000 over the last 12 months. While that’s the national number, if you want to know what happened, on average, over the past year in your area, look at the map below from CoreLogic:

Watching the Stock Market? Check the Value of Your Home for Good News. | MyKCM

Why This Is So Important Right Now

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), helps explain why this matters so much today:

“. . . the decline in the stock market has dented overall net wealth. It has fallen by $6 trillion from the first to the second quarter. Only housing wealth has held on, with homeowners' real estate wealth (home value minus mortgage balance) rising by $1.2 trillion.”

While equity helps increase your overall net worth, it can also help you achieve other goals like buying your next home. When you sell your current house, the equity you built up comes back to you in the sale, and it may be just what you need to cover a large portion – if not all – of the down payment on your next home.

Bottom Line

There’s volatility in today’s stock market, but home equity is still incredibly strong. To find out just how much equity you have in your current home, let’s connect.

Posted in Market Updates
Sept. 28, 2022

The Ireland Group - Buyers Are Regaining Some of Their Negotiation Power In Today's Housing Market

The Ireland Group -

Buyers Are Regaining Some of Their Negotiation Power in Today’s Housing Market

Buyers Are Regaining Some of Their Negotiation Power in Today’s Housing Market | MyKCM

If you're thinking about buying a home today, there's welcome news. Even though it’s still a sellers’ market, it’s a more moderate sellers’ market than last year. And the days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close.

Today, you should have less competition and more negotiating power as a buyer. That’s because the intensity of buyer demand and bidding wars is easing this year. So, if bidding wars were the biggest factor that had you sitting on the sidelines, here are two trends that may be just what you need to re-enter the market.

1. The Return of Contingencies

Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But now, fewer people are waiving the inspection and appraisal.

The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection and appraisal is declining. And a recent survey from realtor.com confirms more sellers are accepting offers that include these conditions today. According to their August study:

  • 95% of sellers reported buyers requested a home inspection
  • 67% of sellers negotiated with buyers on repairs as a result of the inspection findings

This goes to show buyers are more able to include these conditions in their offers today and negotiate as needed based on the outcome of the inspection.

2. Sellers Are More Willing To Help with Closing Costs

Generally, closing costs range between 2% and 5% of the purchase price for the home. Before the pandemic, it was a common negotiation tactic for sellers to cover some of the buyer’s closing costs to sweeten the deal. This didn't happen as much during the peak buyer frenzy over the past two years.

Today, as the market shifts and demand slows, data from realtor.com suggests this is making a comeback. A recent article shows 32% of sellers paid some or all of their buyer’s closing costs. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area.

Bottom Line

Regardless of the extremely competitive housing market of the past several years, today’s data suggests negotiations are starting to come back on the table. This is good news if you're planning to enter the housing market. To find out how the market is shifting in our area, let's connect.

Posted in Market Updates
Sept. 28, 2022

The Ireland Group - Three Things Buyers Can do In Today's Housing Market

The Ireland Group -

Three Things Buyers Can Do in Today’s Housing Market

Three Things Buyers Can Do in Today’s Housing Market | MyKCM

It’s clear the 2022 housing market has been defined by rising mortgage rates. With rates on the rise, it’s also become more costly to purchase a home. According to the National Association of Realtors (NAR):

“Compared to one year ago, the monthly mortgage payment rose to $1,944 from $1,265, an increase of 53.7%.”

If you’re thinking of buying a home or have been trying to recently, that’s a big increase in a monthly mortgage payment – and it may be causing you to press pause on your plans. This jump is making homes less affordable, especially compared to the last two years when mortgage rates were at historic lows.

The good news is you can navigate today’s housing market and this rising rate environment with a few simple tips. Here are three things you may want to consider to help make your homeownership goals a reality.

1. Expand Your Search Area and Criteria

If you’ve been looking for a home in the city center or a specific area that’s starting to feel out of your price range, you may want to try looking a little further out in a location that could be more affordable. Expanding your search location or re-prioritizing the items on your wish list can open up opportunities you haven’t considered, and that could help you afford more of what you need (and want) in a home. As CNET notes:

“Area growth is likely to keep pace with the market, which means that the outskirts of town might be hopping within five years. Consider stepping out of your ideal location by searching in the nearby cities. You may find better prices and more square footage.”

2. Explore Alternative Financing Options

Working with a trusted lender to learn about the different loan types and options is essential too. According to Nerd Wallet:

“A variety of mortgages are available with varying down payment and eligibility requirements.”

Experts know how to point you in the right direction when it comes to exploring ways to find the best home loan for your situation. With rising mortgage rates making it more costly to finance a home today, there may be an ideal option out there your loan officer can introduce you to. This could make a home purchase more affordable and within your financial reach over the life of your loan.

3. Look for Grants, Gift Funds, and Down Payment Assistance

There are also many options available when it comes to securing the funding you need to purchase a home. One valuable resource to explore is downpaymentresource.com. Searching for specific down payment assistance options available in your local community could be a game changer when it comes to taking your first step toward homeownership. As NAR indicates:

“Many local governments and non-profit organizations offer down-payment assistance grants and loans, targeted to area borrowers and often with specific borrower requirements.”

Plus, there are programs and special benefits for individuals working in certain professions or with unique statuses, including teachers, doctors and nurses, and veterans.

Ultimately, that means there are many federal, state, and local programs available for you to explore. The best way to do that is to connect with a local real estate professional and your lender to learn more about what’s available in your area.

Bottom Line

If you’ve been searching for a home and have found yourself stepping out of the process because you’re worried about rising costs, let’s connect. Having a team of local advisors on your side may be just what you need to guide your search in a new and more affordable direction.

Posted in Market Updates
Sept. 9, 2022

The Ireland Group - How Owning a Hone Builds Your Net Worth

The Ireland Group -

How Owning a Home Builds Your Net Worth

How Owning a Home Builds Your Net Worth | MyKCM

Owning a home is a major financial milestone and an achievement to take pride in. One major reason: the equity you build as a homeowner gives your net worth a big boost. And with high inflation right now, the link between owning your home and building your wealth is especially important.

If you’re looking to increase your financial security, here’s why now could be a good time to start on your journey toward homeownership.

Owning a Home Is a Key Ingredient for Financial Success

report from the National Association of Realtors (NAR) details several homeownership trends, including a significant gap in net worth between homeowners and rentersIt finds:

“. . . the net worth of a homeowner was about $300,000 while that of a renter’s was $8,000 in 2021.”

To put that into perspective, the average homeowner’s net worth is roughly 40 times that of a renter’s. This difference shows owning a home is a key step in achieving financial success.

Equity Gains Can Substantially Boost a Homeowner’s Net Worth

The net worth gap between owners and renters exists in large part because homeowners build equity. When you own a home, your equity grows as your home appreciates in value and you make your mortgage payments each month. As a renter, you don’t have that same opportunity. A recent article from CNET explains:

Homeownership is still considered one of the most reliable ways to build wealth. When you make monthly mortgage payments, you're building equity in your home . . . When you rent, you aren't investing in your financial future the same way you are when you're paying off a mortgage.”

But on top of that, your home equity grows even more as your home appreciates in value over time. That has a major impact on the wealth you build, as a recent article from Bankrate notes:

“Building home equity can help you increase your wealth over time, . . . A home is one of the only assets that have the potential to appreciate in value as you pay it down.”

In other words, when you own your home, you have the advantage of your mortgage payment acting as a contribution to a forced savings account that grows in value as your home does. And when you sell, any equity you’ve built up comes back to you. As a renter, you’ll never see a return on the money you pay out in rent every month.

Bottom Line

Owning a home is an important part of building your net worth. If you’re ready to start on your journey to homeownership, let’s connect today.

Posted in Market Updates
Sept. 9, 2022

The Ireland Group - Here's Why It's Still a Sellers Market

Here’s Why It’s Still a Sellers’ Market [INFOGRAPHIC]

Here's Why It's Still a Sellers' Market [INFOGRAPHIC] | MyKCM

Some Highlights

  • While buyer demand has moderated and housing supply has grown in recent months, it’s still a sellers’ market because inventory is low.
  • The latest data shows sellers continue to benefit from serious buyers and competitive offers. In July, the average home received 2.8 offers and 39% sold over the asking price.
  • You haven’t missed your opportunity to sell. Let’s connect to start the process today.
Posted in Market Updates
Sept. 9, 2022

The Ireland Group - Buyers: You May Face Less Competition as Bidding Wars Ease

Buyers: You May Face Less Competition as Bidding Wars Ease

Buyers: You May Face Less Competition as Bidding Wars Ease | MyKCM

One of the top stories in recent real estate headlines was the intensity and frequency of bidding wars. With so many buyers looking to purchase a home and so few of them available for sale, fiercely competitive bidding wars became the norm during the pandemic – and it drove home prices up. If you tried to buy a house over the past two years, you probably experienced this firsthand and may have been outbid on several homes along the way.

But here’s the news you’ve been waiting for: data shows clear signs bidding wars are easing this year.

According to the National Association of Realtors (NAR), the average number of offers on recently sold homes has declined considerably over the past few months (see graph below):

Buyers: You May Face Less Competition as Bidding Wars Ease | MyKCM

The graph shows homes were seeing a high of around five offers earlier this year. But the latest data shows that average was down to just shy of three offers per recently sold home. This shift is happening largely because rising mortgage rates moderated buyer demand and slowed home sales, resulting in a growing supply of homes on the market. Essentially, more choices for buyers.

What This Means for You

If you put your home search on pause because you were outbid last year or because you didn’t want to deal with the peak intensity of bidding wars, you can breathe a welcome sigh of relief. While it’s still a sellers’ market, an uptick in inventory gives you a window of opportunity to jump back in. You may still be competing with some buyers, but it likely won’t be anything like it was just a few short months ago.

Bottom Line

If you put your plans on pause because of intense bidding wars in recent years, it may be time to kick off your home search. Today, bidding wars are easing and that may mean less competition for you as a buyer. If you’re serious about buying a home or making a move, let’s connect to get started today.

Posted in Market Updates