Why You Should Buy a Home in 2020

The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.3% from April 2020 to May 2020, and decline 1.3% on a year-over-year basic from April 2020 to April 2021. 2021 will mark the first year home prices are expected to decline in more than nine years.

Why You Should Buy a Home in 2020

“The very low inventory of homes for sale, coupled with homebuyers’ spur of record-low mortgage rates, will likely continue to support home price growth during the spring. If unemployment remains elevated in early 2021, then we can expect home prices to soften. Our forecast has home prices down in 12 months across 41 states.”

– Dr. Frank Nothaft
Chief Economist for CoreLogic

The home price acceleration in the April HPI was supported by increased homes sales in the first quarter of the year. Home price growth is expected to decelerate somewhat in May, with the CoreLogic HPI Forecast calling for a month-over-month increase of 0.3% compared with April 2020. Looking ahead, the CoreLogic HPI Forecast predicts an annual price decline of 1.3% from April 2020 to April 2021. In 2021, home prices are expected to decline for the first time in more than nine years.

Home-purchase activity slowed over March and April compared to last year as shelter-in-place orders, and an unprecedented spike in unemployment, dented home-buying activity fueled by millennials. Nationally, the for-sale inventory of entry-level homes plummeted on average 25% in April. Should this trend continue, we may see an adverse effect on home sales in the near term.

Why You Should Buy a Home in 2020

“Tight supply and pent-up demand, particularly among millennials, provides optimism for a bounce-back in the housing market purchase activity and home prices over the medium term. The next 12 to 18 months are going to be very tough times for the broader economy. As employment and economic activity begin to pick up, as it will surely do, we expect housing to be a driver in a national recovery.”

-Frank Martell
President and CEO of CoreLogic

 

Nationally, the year-over-year home price changed by 5.4%. No states posted an annual decline in home prices in April 2020.  The states with the highest increases year-over-year were Idaho (12%, Arizona (8.3%), Indiana (8%) and Missouri (8%).
Nationally, the year-over-year home price changed by 5.4%. No states posted an annual decline in home prices in April 2020.
The states with the highest increases year-over-year were Idaho (12%, Arizona (8.3%), Indiana (8%) and Missouri (8%).

 

05-hpi-top-us-metros-2006

Top 10 Metros Change

These large cities continue to experience price increases, with Washington D.C. leading the way at 5.7% year over year.

 Why You Should Buy a Home in 2020?   Let’s connect and so that you have the information you need to make the best decision for you and your family.

 

The Expert Economic Recovery Forecast

According to the WSJ, 85.3% of economists believe an economic recovery will begin in the second half of 2020.

DESPITE IMMENSE CHALLENGES facing many sectors of the economy, some encouraging signs suggest “green shoots” of a recovery that could begin as early as this summer, says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. As all 50 states begin to take steps toward reopening after months of coronavirus-related lockdowns and consumer spending and unemployment slowly start to stabilize, “We fully expect the economy could begin to pick up in late June and July with a strong recovery in the fourth quarter,” he notes. Let’s connect to discuss how the expert forecast may influence your plans in the housing market this year.

 

Among the encouraging signs: The Dow surged more than 900 points on Monday, in response to preliminary results from human trials of a vaccine that could potentially help the body’s immune system fight the coronavirus.1 Even after trillions of dollars in economic stimulus, in an appearance before Congress on Tuesday, Federal Reserve (Fed) chair Jerome Powell emphasized the Fed’s ongoing commitment to supporting economic recovery.

 

There’s no doubt that many obstacles remain and economic recovery could still face setbacks, especially if coronavirus rates spike and certain states are delayed on the road to fully reopening. “Everything depends on solutions to what is, first and foremost, a devastating global health crisis,” Hyzy notes. But the following data points are evidence of economic resilience. The Chief Investment Office will be watching them closely in the weeks to come.

 

Unemployment. Weekly jobless claims released May 21 totaled nearly 2.4 million.2 Yet continuing claims—workers already unemployed and receiving ongoing benefits—have leveled off, Hyzy says. “That means workers coming back into the economy, whether temporary or full-time, are at the same levels as those going out. We’ll be watching this closely as economic re-openings continue.”

 

Consumer spending. “Those employment trends match up well, in our view, with the fact that the consumer has begun to stabilize,” Hyzy says. Despite the April sales numbers and ongoing weakness in battered areas such as travel, leisure and entertainment, “spending in the last couple of weeks hasn’t just evened out, it has risen. Even airlines have shown a modest increase in bookings recently.”

 

Capital spending. Companies will have to adjust and accommodate to new ways of doing business, Hyzy believes. Remote work, social distancing and other changes call for new capital investments. “This could be one of the more robust economic catalysts as we head towards the middle part of 2021 and beyond,” he says.

 

What can investors consider doing?

To help position themselves for the recovery, investors may want to consider stocks of large, well-established U.S. companies, Hyzy says. Promising areas include technology, healthcare and communications services, as well as companies focused on innovations for consumers, among others. With low interest rates likely to persist even during the recovery, investors may want to compensate for low yields from Treasury bonds with high-quality corporate bonds or dividend-paying stocks, he adds.

Let’s connect to discuss how the expert forecast may influence your plans in the housing market this year.

Mortgage Rates

Mortgage Rates

Mortgage rates drop to another record low — here’s why Americans may not want to wait too much longer before locking rates in

Mortgage rates have fallen to a new all-time low for the fourth time this year. But there’s significant upside risk to the low rate environment, and Americans may not want to wait too much longer before locking rates in.

The 30-year fixed-rate mortgage averaged 3.13% for the week ending June 18, down eight basis points from a week earlier, Freddie Mac FMCC, -0.60% reported Thursday. The previous record low was 3.15% back at the end of May. A year ago, the 30-year home loan averaged 3.84%.

The 15-year fixed-rate mortgage dropped four basis points to an average rate of 2.58%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage dipped one basis point to 3.09%.

“Mortgage rates have hit another record low due to declining inflationary pressures, putting many home buyers in the buying mood,” Freddie Mac’s chief economist Sam Khater said in the report.

 The interest rates on home loans roughly track the direction of long-term bond yields, including the 10-year Treasury note. The 10-year Treasury yield TMUBMUSD10Y, 0.699% has seesawed over the past week in response to weakness in the stock market driven by concerns about the rise in coronavirus infections across many parts of the country.

“Upticks in coronavirus cases across the country left market participants skeptical of the economic recovery’s sustainability,” said Matthew Speakman, an economist with Zillow ZG, +1.09% . “This sparked a sell-off in stocks and a flight to the safe haven of bonds — something that normally pushes mortgage rates lower.”

But now the mortgage market is at a turning point, Speakman said. And it all depends on what happens with the spread of COVID-19 from here on out.

“More bad news regarding the uptick in coronavirus cases would likely send rates back downward, possibly to new lows,” Speakman said. “However, rates could just as easily begin to trend upward again, particularly if key economic data or measures to contain or treat the virus show meaningful improvements.”

Rates going up could spell trouble for the broader housing market. Eager to lock in the cheap financing, buyers have flocked to apply for home loans to purchase property. There’s evidence that the low rates, coupled with pent-up demand caused by the coronavirus stay-at-home orders, is driving a significant recovery across the housing market.

An increase in rates would hamper the housing market’s ability to rebound. But it’s not the only headwind the market is facing. “It would be difficult to sustain the momentum in demand as unsold inventory was at near record lows coming into the pandemic and it has only dropped since then,” Khater said.

In other words, with very few homes for sale, there’s a rather low ceiling on how high sales activity can go for the foreseeable future.

ARTICLE Published: June 19, 2020 at 9:03 a.m. ET, MARKETWATCH

2020 Homeowner Wish List

2020 Homeowner Wish List

2020 Homeowner Wish List [INFOGRAPHIC] | MyKCM

Some Highlights

  • In a recent study by realtor.com, homeowners noted some of the main things they would change about their homes to make them more livable.
  • Not surprisingly, more space, an updated kitchen, and a home gym rose to the top of the list.
  • If you’re thinking of selling this year, having these items in your listing might make your house more desirable than ever to potential buyers.

Selling Your Home

 

Every day that passes, people have a need to buy and sell homes. That doesn’t stop during the current pandemic. If you’ve had a major life change recently, whether with your job or your family situation, selling your home may be needed, and fast.

While you probably feel like timing with the current pandemic isn’t on your side, making a move is still possible. Rest assured, with technology at your side and fewer sellers on the market in most areas, you can list your house and make it happen safely and effectively, especially when following the current COVID-19 guidelines set forth by the National Association of Realtors (NAR) and the Centers for Disease Control and Prevention (CDC). You may have a new baby, a new employment situation, a parent who moved in with you, you just built a home that’s finally ready to move into, or some other major part of your life that has changed in recent weeks.  Selling your home may be a strong necessity!

Buyers have those needs too, so rest assured that someone is likely looking for a home just like yours. According to the NAR Flash Survey: Economic Pulse taken April 5 – 6, real estate agents indicate, not surprisingly, that there’s a noticeable decline in current homebuyer interest. That said, 10% of agents said in the same survey that they saw no change or even an increase in buyer activity. So, while buyer interest is low compared to normal spring markets, there are still buyers in the market. Don’t forget, you only need one buyer – the right one for your home.  Selling your home may be THE home for that buyer!

Here’s the other thing – people are spending a lot of time on the Internet right now, given the stay-at-home orders implemented across the country. Buyers are actively looking at homes for sale online. Some of them are reaching out to real estate professionals for virtual tours and getting ready to make offers too. Homes are being sold in many markets.

Whenever you decide to sell your home, whether now or later, there will always be do’s and don’ts to navigate throughout the process. Contact me so we can get ahead of some common mistakes and set you up with some mission-critical best practices.

Buying a Home Right Now

Buying a Home Right Now: Easy? No. Smart? Yes.

Through all the volatility in the economy right now, some have put their search for a home on hold, yet others have not. According to ShowingTime, the real estate industry’s leading showing management technology provider, buyers have started to reappear over the last several weeks. In the latest report, they revealed:

“The March ShowingTime Showing Index® recorded the first nationwide drop in showing traffic in eight months as communities responded to COVID-19. Early April data show signs of an upswing, however.”

2020-05-05 Showing Time

https://www.showingtime.com/impact-of-covid-19/

Buying a Home Right Now: Easy? No. Smart? Yes!!!

Why would people be setting appointments to look at prospective homes when the process of purchasing a home has become more difficult with shelter-in-place orders throughout the country? Here are three reasons for this uptick in activity: 1. Some people need to move. Whether because of a death in the family, a new birth, divorce, financial hardship, or a job transfer, some families need to make a move as quickly as possible. 2. Real estate agents across the country have become very innovative, utilizing technology that allows purchasers to virtually:

  • View homes
  • Meet with mortgage professionals
  • Consult with their agent throughout the process

All of this can happen within the required safety protocols, so real estate professionals are continuing to help families make important moves. 3. Buyers understand that mortgage rates are a key component when determining their monthly mortgage payments. Mortgage interest rates are very close to all-time lows and afford today’s purchaser the opportunity to save tens of thousands of dollars over the lifetime of the loan. Looking closely at the third reason, we can see that there’s a big difference between purchasing a house last year and purchasing one now (see chart below):Buying a Home Right Now: Easy? No. Smart? Yes. | MyKCM

Bottom Line:  Buying a Home Right Now: Easy? No. Smart? Yes.

Many families have decided not to postpone their plans to purchase a home, even in these difficult times. If you need to make a move, let’s connect today so you have a trusted advisor to safely and professionally guide you through the process.

Looking to the Future: What the Experts Are Saying

Looking to the Future: What the Experts Are Saying

Looking to the Future: What the Experts Are Saying | MyKCM

As our lives, our businesses, and the world we live in change day by day, we’re all left wondering how long this will last. How long will we feel the effects of the coronavirus? How deep will the impact go? The human toll may forever change families, but the economic impact will rebound with a cycle of downturn followed by economic expansion like we’ve seen play out in the U.S. economy many times over.

Here’s a look at what leading experts and current research indicate about the economic impact we’ll likely see as a result of the coronavirus. It starts with a forecast of U.S. Gross Domestic Product (GDP).

According to Investopedia:

“Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country’s economic health.”

When looking at GDP (the measure of our country’s economic health), a survey of three leading financial institutions shows a projected sharp decline followed by a steep rebound in the second half of this year:Looking to the Future: What the Experts Are Saying | MyKCMA recent study from John Burns Consulting also notes that past pandemics have also created V-Shaped Economic Recoveries like the ones noted above, and they had minimal impact on housing prices. This certainly gives hope and optimism for what is to come as the crisis passes.

With this historical analysis in mind, many business owners are also optimistic for a bright economic return. A recent PricewaterhouseCoopers survey shows this confidence, noting 66% of surveyed business owners feel their companies will return to normal business rhythms within a month of the pandemic passing, and 90% feel they should be back to normal operation 1 to 3 months after:Looking to the Future: What the Experts Are Saying | MyKCMFrom expert financial institutions to business leaders across the country, we can clearly see that the anticipation of a quick return to normal once the current crisis subsides is not too far away. In essence, this won’t last forever, and we will get back to growth-mode. We’ve got this.

Bottom Line

Lives and businesses are being impacted by the coronavirus, but experts do see a light at the end of the tunnel. As the economy slows down due to the health crisis, we can take guidance and advice from experts that this too will pass.

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

 

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year | MyKCM

The last few weeks and months have caused a major health crisis throughout the world, leading to a pause in the U.S. economy as businesses and consumers work to slow the spread of the coronavirus. The rapid spread of the virus has been compared to prior pandemics and outbreaks not seen in many years. It also has consumers remembering the economic slowdown of 2008 that was caused by a housing crash. This economic slowdown, however, is very different from 2008.

One thing the experts are saying is that while we’ll see a swift decline in economic activity in the second quarter, we’ll begin a sharp rebound in the second half of this year. According to John Burns Consulting:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far.” 

Given this situation, if you’re thinking about buying a home this year, the best thing you can do right now is use this time to get pre-approved for a mortgage, which you can do from the comfort of your home. Pre-approval will help you better understand how much you can afford so that you can confidently do the following two things when you’re ready to buy:

1. Gain a Competitive Advantage

Today’s low inventory, like we’ve seen recently and will continue to see, means homebuyers need every advantage they can get to make a strong offer and close the deal. Being pre-approved shows the sellers you’re serious about buying a home, which is always a plus in your corner.

2. Accelerate the Homebuying Process

Pre-approval can also speed-up the homebuying process so you can move faster when you’re ready to make an offer. Being ready to put your best foot forward when the time comes may be the leg-up you need to cross the finish line first and land the home of your dreams.

Bottom Line:  The #1 Thing You Can Do Now to Position Yourself to Buy a Home This Year

Pre-approval is the best thing you can do right now to be in a stronger position to buy a home when you’re ready. Let’s connecttoday to get the process started.

The Overlooked Financial Advantages of Homeownership

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There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.

1. You Won’t Always Have a Monthly Housing Payment

According to a recent article by the National Association of Realtors (NAR):

“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”

As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Homeownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of homeownership. The same piece states:

“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third item noted in the article is how monthly costs become more predictable with homeownership:

As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”

With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying a home sooner rather than later is right for you.