3 Key Factors Affecting Home Affordability

Over the past few years, home prices skyrocketed. That’s been frustrating for buyers, leaving many wondering if they’d ever get a shot at owning a home. But here’s some welcome news: that whirlwind pace of home price growth is slowing down. Home Prices Are Rising at a Healthy Pace At the national level, home prices are still going up, but at a much more moderate, normal pace. For example, in November, the year-over-year increase in home prices was just 3.8% nationally, according to Case-Shiller. That’s a far cry from the double-digit spikes that occurred in 2021 and 2022 (see graph below):

In a recent survey , the National Association of Realtors (NAR) asked sellers what they want most from a real estate agent. The number one answer was to help market their house. It makes sense. The way your agent markets your house can be the difference between whether or not it stands out and gets attention from buyers. That’s why it’s so important to work with an expert local agent like me that knows what I am doing. According to that same report from NAR, here are some of the most common methods real estate agents use to market homes, and how you benefit when your agent uses them effectively ( see graph below ): 

Have you been wondering whether you should keep renting or finally make the leap into homeownership? It’s a big decision, and let’s be real — renting can feel like the easier option, especially if buying a home feels out of reach . But here’s the thing: a recent report from Bank of America highlights that 70% of prospective buyers fear the long-term consequences of renting , including not building equity and dealing with rising rents. Maybe you’re feeling that too — concerned about where renting might leave you down the road, but still unsure if you'd even be able to buy right now. The truth is, if you’re able to make the numbers work, buying a home has powerful long-term financial benefits. Let’s break down why homeownership is worth considering in 2025 and beyond, and how it can help set you up for the future. Buying Builds Wealth Over Time Buying a home allows you to turn your monthly housing costs into a long-term investment. That’s because, as shown in data from the Census and the Department of Housing and Urban Development (HUD), home prices tend to increase over time ( see graph below ):

Let’s face it — buying a home can feel like a challenge with today’s mortgage rates. You might even be thinking, “Should I just wait until spring when more homes hit the market and rates might be lower?” But here’s the thing, no one knows for sure where mortgage rates will go from here, and waiting could mean facing more competition, higher prices, and a lot more stress. What if buying now — before the spring rush — might actually give you the upper hand? Here are three reasons why that just might be the case. 1. Less Competition from Other Buyers The winter months tend to be quieter in the real estate market. Fewer people are actively looking for homes, which means you’ll likely face less competition when you make an offer. This makes the process feel less rushed and less stressful. According to the National Association of Realtors (NAR), homes sit on the market longer in winter compared to spring and summer ( see graph below ): 

It’s no secret that affordability is tough with where mortgage rates and home prices are right now. And that may have you worried about how you’ll be able to buy a home. But, if you don’t need a ton of space, you may find you have more cost-effective options in an unexpected place: new home communities. Builders Are Building Smaller Homes Since smaller homes typically come with smaller price tags, buyers have turned their attention to homes with less square footage — and builders have shifted their focus to capitalize on that demand. As U.S. News notes: “The combination of higher home prices and mortgage rates has strained a lot of people's budgets. And that's something builders recognize. To this end, they may be leaning toward smaller spaces . . .That, in turn, can lead to savings for buyers.” Data from the Census shows the overall builder trend toward smaller, single-family homes has been over the last couple of years ( see graph below ): 

There’s one essential step in the homebuying process you may not know a whole lot about and that’s pre-approval. Here’s a rundown of what it is and why it’s so important right now. What Is Pre-Approval? Pre-approval is like getting a green light from a lender. It lets you know how much they’re willing to let you borrow for a home. To determine that number, a lender looks at your financial history. According to Realtor.com , these are some of the documents a lender may ask you for during this process: W-2s from the last two years Tax returns from the last two years Pay stubs from the last 30 days Bank statements from the last 60 days Investment account statements (if applicable) Two years of history of where you’ve lived The result? You’ll get a pre-approval letter showing what you can borrow. Keep in mind, that any changes in your finances can affect your pre-approval status. So, after you receive your letter, avoid switching jobs, applying for new credit cards or other loans, or taking out large sums of money from your savings. Another option is to be fully underwritten and reapproved, therefore there is no need for a loan contingency. This will help your offer be that much more competitive in this competitive market as it will help you complete agains the cash buyers who dont need a loan to be able to buy their home. How It Helps You Determine Your Borrowing Power This year, home prices are expected to rise in most places and mortgage rates are still showing some volatility. So, since affordability is still tight, it’s a good idea to talk to a lender about your home loan options and how today’s changing mortgage rates will impact your future monthly payment. The pre-approval process is the perfect time for that. Because it determines the maximum amount you can borrow, pre-approval also helps you figure out your budget. You should use this information to tailor your home search to what you’re actually comfortable with as far as a monthly mortgage payment. That way, you don’t fall in love with a house that’s out of your comfort zone. How It Helps You Stand Out Once you find a home you want to put an offer on, pre-approval has another big perk. It not only makes your offer stronger, it shows sellers you’ve already undergone a credit and financial check. When a seller sees you as a serious buyer, they may be more attracted to your offer because it seems more likely to go through. As Greg McBride, Chief Financial Analyst at Bankrate , says: “Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.” Bottom Line If you’re planning on buying a home, getting pre-approved for a mortgage should be one of the first things on your to-do list. Not only will it give you a better understanding of your borrowing power, it can put you in the best position possible to make a strong offer when you find a home you love. Connect with a trusted lender to learn more or contact me so I can refer you to one of my favorite and most trusted lenders that I work with regularly.

It’s easy to get caught up in the idea of waiting for the perfect moment to make your move – especially in today’s market. Maybe you’re holding out and hoping mortgage rates will drop, or that home prices will fall. But here’s what you need to realize: trying to time the market rarely works. And here’s why. There is no perfect market. No matter when you buy, there’s always some benefit and some sort of trade-off – and that’s not a bad thing. That’s just the reality of it. If you’re not sure you buy into that, think back to the last 5 years in housing. Just a few years ago, mortgage rates hit a historic low. To take advantage of that, a ton of buyers rushed to buy a home and lock in those lower rates. The side effect? With such a big increase in how many buyers were purchasing, the homes on the market were snapped up fast. And since that resulted in so few homes left for sale, bidding wars became the norm and home prices went through the roof. Those buyers got a great rate, but they had other things to contend with. Now, with higher rates and higher prices, it’s more expensive to buy. You can’t argue that. But at the same time, there are fewer buyers to compete with. That means you typically have more time to think about making an offer and you’ll be less likely to find yourself in a pull-out-all-the-stops bidding war unless you find the gem others also want to buy. Again, there are benefits and trade-offs in any market. So, if you have a reason to move and can afford to do so, you’ve got to take advantage of the trends that work in your favor and lean on a pro to help you navigate the rest. As Bankrate says: “The complexities of the current conditions mean that, now more than ever, it’s smart to lean on the guidance of an experienced local real estate agent. If you want to enter the housing market in 2025, whether as a buyer or a seller, let a pro lead the way for you.” While achieving your goals may feel like an uphill battle in today’s complex market, it is doable. But you’ll need the help of a trusted real estate agent and a lender. I will help you explore creative solutions for your new home. Considering homes that need a little elbow grease, or casting a wider net for your search area may be helpful. And your lender will walk you through different loan options and down payment assistance programs that may help, so you know what you need to do to make the numbers work for you. As Yahoo Finance says: “Buying a house at a time when both mortgage rates and home prices are favorable is a challenge. You probably shouldn’t try to time the housing market . . . Buy when it makes sense for you personally.” Bottom Line There’s no perfect time to move – every market has its pros and cons. The key is knowing how to make the most of the factors working in your favor. If you need to move and can afford to do it, let’s connect so you’ll have the guidance and tools to make it possible. 

You may have heard that staging your home properly can make a big difference when you sell your house, but what exactly is home staging, and is it really worth your time and effort? Here are a few quick FAQs that can help you decide how much you should prioritize staging as you prep for your move. What Is Home Staging? Staging is the process of arranging and decorating your house to highlight its best features and make it as appealing as possible to potential buyers. It can range from simple touch-ups to more extensive setups, depending on your needs and budget. How Does It Help Me Sell My House? Studies show good staging does have an impact on your sale. Staging your house well can help you attract more attention from buyers, which ultimately helps it sell faster and maybe for a higher price than an unstaged home ( see visual ): 

Trying to decide whether it makes more sense to buy a home now or wait? There’s a lot to consider, from what’s happening in the market to your changing needs. But generally speaking, aiming to time the market isn’t a good strategy – there are too many factors at play for that to even be possible. That’s why experts usually say time in the market is better than timing the market. In other words, if you want to buy a home and you’re able to make the numbers work, doing it sooner rather than later is usually worth it. Bankrate explains why: “No matter which way the real estate market is leaning, though, buying now means you can start building equity immediately.” Here’s some data to break this down so you can really see the benefit of buying now versus later – if you’re able to. Each quarter, Fannie Mae releases the Home Price Expectations Survey . It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts are projecting home prices will continue to rise through at least 2029 – just at a slower, more normal pace than they did over the past few years (see the graph below ):