​In July, inflation numbers declined slightly to 8.5% from June’s 40-year high of 9.1%. Food, gas, and clothing have all become more expensive, yet salaries haven’t increased at the same pace, leaving gaps in monthly budgets. Households have felt the strain of elevated prices. In times of economic uncertainty, many people will hold off on making large purchases. However, unlike purchasing a car or electronics, which start to depreciate in value seconds after the purchase, buying a home is an investment. Here’s why home ownership can help reduce the rising costs that come with inflation.

Homeownership Helps Stabilize Monthly Budgets
The cost of shelter accounts for a large portion of monthly expenses. During times of high inflation, home prices and rent can both increase, reducing the amount left over for expenses like groceries, gas, and savings. While home prices may be rising, purchasing a home is often the more affordable option than signing a rental lease. Here’s why: Rent can increase on a yearly basis, while homebuyers who have locked into a fixed-rate mortgage will be paying the same monthly payments throughout the duration of the loan, usually 15 to 30 years. This helps keep budgets in check. In addition, salaries and wages often rise over time, making mortgages more affordable. Homeowners who locked into their fixed-rate mortgages a decade ago are often paying less per month than renters, leaving more money for other expenses.

Homeowners Can Expect a Steady Home Appreciation
Home prices have soared over the last few years, which means it’s more expensive to buy a home today than it was a year ago. The short supply of homes for sale, combined with high demand from buyers, caused prices to skyrocket. That raging price growth has since slowed down, and the price of homes is expected to moderate over the coming years. Since the 1970s, average home price appreciation has outperformed the average inflation rate in most decades. When you invest in a home, you can expect its value to increase steadily over time.

High inflation and rising costs can make homebuyers question the timing of their purchase. Some buyers might be waiting to see if housing prices will decline, but that scenario is unlikely. Experts predict price growth slowing, but don’t expect a sharp drop in prices. Other homebuyers may be holding off to see if mortgage rates drop, but the current rates?although higher than the rock-bottom rates of the last few years?are still quite low.

Buyers, if you need expert advice on planning your next move, reach out today! I can find you a home that fits your needs and is a smart investment. Buying real estate is still one of the most stable investments a person can make, especially during a time of high inflation.

​Buying a home is a big investment that is accompanied by risk. Minimizing that risk is as simple as arranging for an inspection of the home to ensure that everything is working properly. A thorough inspection of these areas is important before buying or selling a home.

Electrical inspections are very important. Making sure a home’s electrical system is safe can’t be overstressed. This task involves looking at the circuit breakers, house wiring, and outlets. If anything does not meet existing electrical codes, repairs will be needed.

Heating and cooling are an integral part of keeping your home’s temperature regulated and comfortable. The entire system is evaluated, including the heater, AC unit, chimney, duct system, and fireplace (if there is one).

Roof inspections identify existing structural damage caused by a leaky roof and provide information about necessary roof repairs or even a roof replacement. Such an inspection typically includes a look at the flashing, downspouts, and gutters to ensure everything is in good condition.

Plumbing inspections assess the integrity of the water lines, sewage lines, faucets, toilets, sinks, tubs, showers, and water heater. This inspection identifies leaks, misalignments, and other issues that should be corrected and verifies that the plumbing meets local and state codes and ordinances.

Air quality is important for your health. Toxic substances present within a home will affect the air quality. Some toxic substances to screen for include radon, asbestos, mold, mildew, lead, and fungus. Many of these substances can aggravate existing health issues or even cause new health problems.

Pest infestations, particularly large ones, can cause structural damage. Before buying a home, you should hire a specialist to check for pests such as termites, carpenter ants, carpenter bees, mice, squirrels, bats, and raccoons.

Your real estate agent can help you find a qualified home inspector. Since states have rules about the parts of a house that must be inspected prior to sale, you may need to specifically request additional inspections for items not included on this list.

​Selling your home and moving on to bigger and better things can be exciting, especially in a seller’s market. However, some unexpected stress might come along with the home-selling process. Here are four ways selling your home may be more disruptive than you thought—and how to get through the process in one piece.

1. Taking the “Home” out of Your House
Your real estate agent will give you advice, and potential buyers will have their own personal tastes and criticisms, but try not to take all of it too hard. Even overhearing what potential buyers might want to change in your home can set off an emotional response. If you have made some personal decor choices over the years that your real estate agent suggests undoing, such as taking down artwork or painting over bold-colored walls, remember that this advice is just to help you reach a larger potential-buyer audience.

2. Being Available at All Times
While your real estate agent will do most of the heavy lifting when it comes to selling your home, there will be things you’ll need to be available for. Potential homeowners may want to view your home at unscheduled times. Once an offer is accepted, buyers might want to schedule additional inspections or have questions about who will be covering what in the closing costs. Remember, as owner of your home, you will need to be available for selling-related issues.

3. Working Through Negotiations
Unexpected issues might come up when closing on your home, from additional inspections to new damages found that weren’t in initial disclosures. Your buyers may come back asking to work with you to split repair costs or negotiate fixing problems before move-in. Try your best not to let curve balls get to you. They are normal and aren’t things that will necessarily undo the closing process on your home.

4. A Quick Move-Out
Buyers may be quick to close on a home due to their own living situation or parameters of preapproved mortgages. Mentally and logistically preparing yourself for the possibility of moving quickly is a good idea. If closing happens swiftly, you might even be able to put together a deal with the homebuyers, such as negotiating more time to move out or even “renting” your home for a period of time after closing to buy some time to pack up and move.

Having a solid real estate agent in your corner really helps relieve stress. They do the behind-the-scenes work so you don’t have to deal with every detail. If you’re thinking about selling or have questions, contact me today!

Buyers looking to enter the housing market are being hit with both rising mortgage rates and sustained price increases, which are both negatively impacting housing affordability. According to Lawrence Yun, National Association of Realtors' (NAR) chief economist, some buyers "who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate." In addition, monthly payments have increased by 28% from a year ago. Yet despite the decline in housing affordability, buyer demand is still strong, with multiple offers being recorded on most properties.

Housing Becoming Less Affordable
Though the demand from buyers still appears to be strong, many are being priced out of the market due to those climbing mortgage rates and escalating prices. In addition, increasing inflation is taking a toll on consumers' savings. However, Yun predicts improving conditions in the coming months: "I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction." The median existing-home price for all housing types climbed 15% in February. For the past 120 consecutive months, prices have increased year-over-year; what's more, home prices climbed in every sales region in the country.

Home Inventory Still Low
The increase in prices can be attributed in part to the lack of supply. By the end of February, the inventory of available homes reached 870,000, down 15.5% from a year ago. At the current sales pace, this level of inventory would supply the market for just 1.7 months; this was up from the 1.6-month supply in January but down from the 2.0-month supply in February 2021. Overall existing-home sales, meanwhile, declined in February, with each sales region in the country recording month-over-month sales decreases. According to NAR, year-over-year sales were down in three regions but were up in the South.

Who's Purchasing?
Fewer first-time buyers were able to make purchases, with this group accounting for just 29% of all sales in February, down from 31% a year ago. According to NAR's 2021 Profile of Home Buyers and Sellers, the annual share of first-time buyers was 34%. Individual investors and second-home buyers—two groups who account for most all-cash sales-were responsible for 19% of all transactions, up from 17% in February 2021. All-cash sales represented 25% of all transactions in February 2022 and 22% in February 2021. The average property remained available for sale for just 18 days in February, down from 20 days a year ago. Of all the homes sold in February, 84% were on the market for less than 30 days.

Regional Sales Breakdown
Northeast: Existing-home sales annual rate of 690,000; this was a decline of 11.5% from a month ago and a decrease of 12.7% from a year ago. The median sales price of $383,700 was up 7.1% from February 2021.
Midwest: Existing-home sales annual rate of 1.33 million; sales dropped 11.3% from January and 1.5% from February 2021. At $248,900, the median sales price represented a 7.5% increase from a year ago.
South: Existing-home sales annual rate of 2.79 million; this was a decrease of 5.1% month-over-month but an increase of 3.0% year-over-year. The median sales price jumped 18.1% from February 2021 to $318,800.
West: Existing-home sales annual rate of 1.21 million; sales were down 4.7% from a month ago and 8.3% from a year ago. At $512,600, the median price climbed 7.1% from February 2021.

​Many things affect mortgage rates, such as your credit score, your debt-to-income ratio, and the location of your property. One thing not a lot of people have to think about is occupancy type—but this will significantly affect rates. So what is occupancy type?

Occupancy type is how you use a property. There are three types:
Principal residence. This is the home where you live most of the time. For mortgage purposes, this is the home where you spend most of each year, and it is also the address listed on your federal and state tax returns.
Second home. This is a property you occupy for part of the time. In most cases, this means a vacation home—a cabin by the lake or a house on the beach. If your job requires you to split your time between two locations and you decide to buy a house in the second location, this would also be a second home.
Investment property. This is a property you purchased with the intention of generating income. Be aware that a primary residence can turn into an investment property if, for example, you build a tiny house in the yard and rent it out. Flipping a house also makes it an investment property. If you have a vacation home that you occupy for a few weeks and then rent out the rest of the time, that also becomes an investment property.
Why Do Mortgage Rates Change by Occupancy Type?
Lenders give different rates because they consider these occupancy types to have different risk levels. Let’s say you own a house you live in and a duplex you’re renting out. If things change, which mortgage will you stop paying first?

Lenders consider second homes riskier than principal residences and investment properties riskier than both. The riskier the home, the higher down payment or credit score your lender might require from you.

Be Transparent with the Lender About the Property Use
It’s illegal to intentionally misrepresent the intended use of a property. This can result in hefty fines and put you in default of your loan agreements. Some mortgage companies randomly inspect second homes to make sure they aren’t being rented out. The IRS considers your second home a residence if you use it for at least 14 days per year or 10% of the days you rent it out, whichever is greater, although your lender might have stricter rules.

What if you retire and decide to move to that beach house and rent out your primary residence? You can always change the occupancy status as long as you have had the mortgage for about a year, even if it’s not paid off yet.

If you are considering buying a second home or an investment property, you should understand how this can affect your mortgage. It’s also important to be transparent with your lender about the purpose of the property and to work with them to get the loan you need.

Are you considering buying or selling a property? I have answers for all your real estate-related questions. Contact me today.