Jan. 17, 2021

The Importance of Home Equity in Building Wealth

The Importance of Home Equity in Building Wealth

The Importance of Home Equity in Building Wealth | MyKCM

Homeownership has always been the first rung on the ladder leading to household wealth. As Freddie Mac recently posted:

“Homeownership has cemented its role as part of the American Dream, providing families with a place that is their own and an avenue for building wealth over time. This ‘wealth’ is built, in large part, through the creation of equity…Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

Home equity is the difference between the current market value of your house and the amount you currently owe on your mortgage. To estimate your equity, subtract your mortgage balance from the market value of your home.

You can find what you owe on your mortgage by looking at your last monthly statement or by contacting your lender. If you need help determining the current market value of your home, contact a local real estate professional.

Is homeownership truly a better path to wealth than renting?

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are already baked into the rent payment – along with a profit margin. You don’t save money by renting.

As proof of this, First American broke down the net worth of homeowners and renters by income categories. Here are their findings:The Importance of Home Equity in Building Wealth | MyKCMOnly one income category ($127-192K) has a higher net worth for renters over homeowners. Every other category shows that being a homeowner leads to greater accumulated wealth.

According to the latest Homeowner Equity Insights Report from CoreLogic, the average homeowner gained $17,000 in equity in just the last year. Here’s a breakdown of the year-over-year equity gain by state:The Importance of Home Equity in Building Wealth | MyKCM

When can you cash in on your housing wealth?

Your home equity is part of your total wealth as a homeowner. The two most common ways homeowners can leverage their wealth are:

  • Selling
  • Refinancing

Selling: When you decide to sell your home, the equity you’ve built over time will come back to you in the sale. For example, if you paid off your $200,000 mortgage and sold your home for $350,000, you would receive $150,000 after closing.

Refinancing: You can refinance your current mortgage and take out some of the equity you have accumulated. With today’s historically low mortgage rates, you may be able to take out substantial cash and keep your monthly payment the same. Thankfully, homeowners today are doing this responsibly and not repeating the same mistakes made in 2006-2008 when some cashed out their entire equity to purchase luxury items like new cars, lavish vacations, etc.

How can these options help homeowners?

During these difficult times, many households are struggling with their housing expenses. Homeowners, because of their equity, have better alternatives. Odeta Kushi, Deputy Chief Economist at First American, recently explained that homeowners financially impacted by the pandemic will not necessarily be faced with foreclosure:

“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock.”

What might the future bring?

Most experts are calling for home prices to continue appreciating going forward. The Home Price Expectation Survey, a survey of a national panel of over one hundred economists, real estate experts, and investment & market strategists, indicates appreciation will continue for at least the next five years. Using their annual projections, the graph below shows the equity build-up a purchaser would potentially earn by buying a $300,000 home this January:The Importance of Home Equity in Building Wealth | MyKCM

Bottom Line

Home equity, for most Americans, is the quickest way to build household wealth. That wealth gives homeowners more options during good times and in difficult situations.

Krisha Caraway S.0172941 Chaunice Smith S.0191841

Caraway Homes Team at Valley Realty and Management

775-400-6650 or 775-315-3460

Jan. 16, 2021

Why Not to Wait Until Spring to Make a Move

Why Not to Wait Until Spring to Make a Move

Why Not to Wait Until Spring to Make a Move | MyKCM

The housing market recovery coming into the new year has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause is playing out extremely well for real estate, and the current market conditions are truly making this winter an ideal time to make a move. Here’s a dive into some of the biggest wins for homebuyers this season.

1. Mortgage Rates Are Historically Low

In 2020, mortgage rates hit all-time lows 16 times. Continued low rates have set buyers up for significant long-term gains. In fact, realtor.com notes:

“Given this means homes could cost potentially tens of thousands less over the lifetime of the loan.”

Essentially, it’s less expensive to borrow money for a home loan today than it has been in years past. Although mortgage rates are expected to remain relatively low in 2021, even the slightest increase can make a big difference in your payments over the lifetime of a home loan. So, this is a huge opportunity to capitalize on right now before mortgage rates start to rise.

2. Equity Is Growing

According to John Burns Consulting58.7% of homes in the U.S. have at least 60% equity, and 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear.

In addition, CoreLogic notes the average equity homeowners gained since last year is $17,000. That’s a tremendous amount of forced savings for homeowners, and an opportunity to use this increasing equity to make a move into a home that fits your changing needs this season.

3. Home Prices Are Appreciating

According to leading experts, home prices are forecasted to continue appreciating. Today, many experts are projecting more moderate home price growth than last year, but still moving in an upward direction through 2021.

Knowing home values are increasing while mortgage rates are so low should help you feel confident that buying a home before prices rise even higher is a strong long-term investment.

4. There Are Not Enough Homes for Sale

With today’s low inventory of homes on the market, which is contributing to this home price appreciation, sellers are in the driver’s seat. The competition is high among buyers, so homes are selling quickly.

Making a move while so many buyers are looking for homes to purchase may mean your house rises to the top of the buyer pool. Selling your house before more listings come to the market in the traditionally busy spring market might be your best chance to shine.

Bottom Line

If you’re considering making a move, this may be your moment, especially with today’s low mortgage rates and limited inventory. Let’s connect to get you set up for homebuying success in the new year.

Krisha Caraway S.0172941 Chaunice Smith S.0191841

Caraway Homes Team at Valley Realty and Management

775-400-6650 or 775-315-3460

Jan. 15, 2021

3 Must Do's When Selling Your House This Year

3 Must-Do’s When Selling Your House This Year

3 Must-Do’s When Selling Your House This Year | MyKCM

It’s exciting to put a house on the market and to think about making new memories in new spaces. However, despite the anticipation of what’s to come, we can still have deep sentimental attachments to the home we’re leaving behind. Growing emotions can help or hinder a sale depending on how we manage them.

When it comes to the bottom line, homeowners need to know what it takes to avoid costly mistakes when it’s time to move. Being mindful and prepared for the process can help you stay on the right track when selling your house this year.

1. Price Your Home Right

When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask when setting a listing price. Believe it or not, that’s not always true. Don’t forget that the buyer’s bank will send an appraiser to determine the fair value for your house. The bank will not lend more than what the house is worth, so be aware that you might need to renegotiate the price after the appraisal. A real estate professional will help you set the true value of your home.

2. Keep Your Emotions in Check

Today, homeowners are living in their houses for a longer period of time. Since 1985, the average tenure, or the time a homeowner has owned their home, has increased from 5 to 10 years (as shown in the graph below):3 Must-Do’s When Selling Your House This Year | MyKCMThis is several years longer than what used to be the historical norm. The side effect, however, is when you stay in one place for so long, you may get even more emotionally attached to your space. If it’s the first home you bought or the house where your children grew up, it very likely means something extra special to you. Every room has memories, and it’s hard to detach from the sentimental value.

For some homeowners, that makes it even harder to negotiate and separate the emotional value of the house from the fair market price. That’s why you need a real estate professional to help you with the negotiations along the way.

3. Stage Your Home Properly

We’re generally quite proud of our décor and how we’ve customized our houses to make them our own unique homes, but not all buyers will feel the same way about your design. That’s why it’s so important to make sure you stage your house with the buyer in mind.

Buyers want to envision themselves in the space so it truly feels like it could be their own. They need to see themselves inside with their furniture and keepsakes – not your pictures and decorations. Stage and declutter so they can visualize their own dreams as they walk down the hall. A real estate professional can help you with tips to get your home ready to stage and sell.

Bottom Line

Today’s sellers’ market might be your best chance to make a move. If you’re considering selling your house, let’s connect so you have the help need to navigate through the process while prioritizing these must-do’s.

Krisha Caraway S.0172941 Chaunice Smith S.0191841

Caraway Homes Team at Valley Realty and Management

775-400-6650 or 775-315-3460

Jan. 14, 2021

4 Reasons People Are Buying Homes in 2021

4 Reasons People Are Buying Homes in 2021

4 Reasons People Are Buying Homes in 2021 | MyKCM

According to many experts, the real estate market is expected to continue growing in 2021, and it’s largely driven by the lasting impact the pandemic is having on our lifestyles. As many of us spend extra time at home, we’re reevaluating what “home” means and what we may need in one going forward.

Here are 4 reasons people are reconsidering where they live and why they’re expecting to buy a home this year. 

1. Record-Low Mortgage Interest Rates

In 2020, the average interest rate for a 30-year fixed mortgage hit a record low 16 times, continuing to fall further below 3%. According to Freddie Mac, the average 30-year fixed interest rate today is 2.65%. Many wonder how low these rates will go and how long they’ll last. Len Keifer, Deputy Chief Economist for Freddie Macadvises:

“If you’ve found a home that fits your needs at a price you can afford, it might be better to act now rather than wait for future rate declines that may never come and a future that likely holds very tight inventory.”

This sense of urgency is driving many to buy this year.

2. Working from Home

Remote work is a new normal for many businesses, and it’s lasting longer than most expected. Many in the workforce today are discovering they don’t need to live close to the office anymore and they can get more for their money by moving a little further outside of the city limits. David Mele, President at Homes.comsays: 

“The surge in the work-from-home population has rewritten the playbook for many homebuying and rental decisions, from when and where to relocate, to what people are looking for in their next residence.”

The reality is, for some people, working remotely in their current home is challenging, especially when there may be other options available.

3. More Outdoor Space

Another new priority for homeowners is having more usable outdoor space. Being at home is driving those in some areas to seek less densely populated neighborhoods so they have more room to stretch their legs. In addition, those living in apartments and townhomes are often looking for extra square footage, both inside and out.

According to the State of Home Spending report by HomeAdvisorof the households surveyed, almost half reported spending 27% more on outdoor living over the past year. This is a trend that’s expected to grow in 2021 and beyond.

4. Avoiding Renovations

It’s recently come to light that many homeowners would also rather buy a new home than go through the process of fixing up the one they have. According to the 2020 Profile of Home Buyers and Sellers report from the National Association of Realtors (NAR), 44% of homebuyers purchased a new home to “avoid renovations or problems with the plumbing or electricity.”

Depending on what needs to be addressed, today’s high buyer demand may make it possible to skip some renovations before selling. Many of these homeowners have prioritized buying over renovating for convenience and potential cost savings.

Bottom Line

It’s clear that homeownership needs are changing. As a result, Americans are expected to move in record numbers this year. If you’re trying to decide if now is the right time to buy a home, let’s connect today to discuss your options.

Krisha Caraway S.0172941 Chaunice Smith S.0191841
Caraway Homes Team at Valley Realty and Management
775-400-6650 or 775-315-3460
Jan. 14, 2021

Why Preapproval is Key in 2021

Today's housing market is highly competitive for homebuyers, so it's critical to gain every advantage in the process that you can. Let's connect to make sure pre-approval is one of the first steps you take toward homeownership this year.
Krisha Caraway S.0172941 Chaunice Smith S.0191841
Caraway Homes Team at Valley Realty and Management
775-400-6650 or 775-315-3460

Oct. 29, 2019

Where To Wednesday! Taste of the Good Life

July 2, 2019

Tuesday Tip - What does AS IS mean?

July 1, 2019

Monday Market Minute

Posted in Market Updates
July 1, 2019

June 2019 Carson City Market Report

June 2019 Market Report

Carson City Market Report for the Month of June 2019

Carson City Nevada homes have seen steady price improvement month to month as well as year to year as inventory levels remain at all-time lows.

The Numbers Month to Month and Year to Year

The median sales price for Carson City, NV homes for sale was $334,450 in June 2019 compared to $315,000 during June 2018 and $282,225 in June of 2017. Which is about an 18.5% increase in 3 years.

The number of Carson City, NV homes that sold was 60 in June 2019 vs. 89 in June 2018 and 120 that sold June of 2017. This is a 50% decrease in the number of sold homes in 3 years.

There are 138 Carson City, NV Homes for Sale that are in contract which represents 103% of the overall available inventory of 134 homes.

A few highlights of the current homes for sale in Carson City, NV are shown below and represent a nice cross section of properties available, in contract and that have sold.

This Month’s Most Expensive

The most expensive of all Carson City homes for sale is listed at $1,749,900 and includes 6 bedrooms, 5 baths and 5518 square feet of living space. It was built in 2002 and includes almost 9 acres of land in the purchase price.  It’s located in the beautiful and secluded area of Clear Creek Canyon https://www.coldwellbanker.com/property/4270-Old-Clear-Creek-Rd-Carson-City-NV-89705/43244365/detail

This Month’s Least Expensive

The least expensive of all Carson City homes for sale came in at $135,000.  It has 2 bedrooms and 1 baths with 880 sqft, and includes all exterior maintenance with the monthly HOA dues. https://www.coldwellbanker.com/property/3418-WOODSIDE-DR-_UNIT_39-CARSON-CITY-NV-89701/43247887/detail

This Month’s Must See

This month’s must see home is a great 4 bedroom 2.5 bath, 2 car garage in central Carson City. Listed at $422,000  with freshly painted interior and 2550 square feet, it has French doors in the foyer, bay windows, 3 way gas fireplace and a permitted solarium. https://www.coldwellbanker.com/property/1863-Van-Epps-Dr-Carson-City-NV-89701/43254120/detail

 

If you would like more information on the current market or markets in our surrounding areas, or to schedule a showing on the above or any property in our area, give me a call at 775-400-6650. Making Home Dreams Come True is What I DO!

Posted in Market Updates
June 28, 2019

Where To Wednesday! Living The Good Life