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Planning to Move? You Can Still Secure a Low Mortgage Rate on Your Next Home

Planning to Move? You Can
Still Secure a Low Mortgage Rate on Your Next Home | MyKCM

This year, mortgage rates have started to slowly climb above recent record-breaking lows. Many homeowners planning to move may feel like they've missed the chance to score a great rate on their next mortgage. In reality, there's still time to secure a rate far below the historic norm. Here's why.

After creeping up for seven consecutive weeks, average mortgage rates have dropped more recently (See graph below). With rates taking a slight dip over the past two weeks at the same time the inventory of houses for sale is so low, homeowners today are sitting in the optimal seat to sell. What's the advantage of selling your house now? Securing a low mortgage rate on your next home.Planning to Move? You Can Still Secure a Low Mortgage Rate on Your Next
Home | MyKCMTo take advantage of today's real estate market, experts are encouraging homeowners to act now before interest rates climb. Danielle Hale, Chief Economist at realtor.com, explains:

…mortgage rates slid for a second week … but we don't expect rates to stay at this level for too long. 

Hale continues to say:

For sellers, getting in early optimizes odds of a quick sale at a good price before there's too much competition, but that means acting now … In this environment, sellers probably really can't go wrong, and that's especially true in the nation's hottest housing markets where homes are selling quickly and getting the greatest number of viewers online.

Most experts agree that rates will continue to trend upward. Sam Khater, Chief Economist at Freddie Mac, states:

Despite the pause in mortgage rates recently, we expect them to increase modestly for the remainder of this year.

In addition, Freddie Mac recently released their Quarterly Forecast, which notes:

We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022. (See graph below):

Planning to Move? You Can Still Secure a Low Mortgage Rate on Your Next
Home | MyKCMWhile buyers everywhere want to secure the lowest rate possible, it's important to remember that today's rates are still much lower than the historic norm. Odeta Kushi, Deputy Chief Economist at First American, emphasizes:

While mortgage rates have trended up in recent months, they are still historically low, so relative to one year ago, housing actually is still more affordable and that's really thanks to this low mortgage rate environment we find ourselves in.

Bottom Line

If you're thinking of moving, don't miss the opportunity to score a great rate on your next home mortgage. Let's connect today so you can get your house ready to sell and find your dream home while mortgage rates are still low.

Posted by Tenby Dahman on April 21st, 2021 10:43 AM

To Renovate or Not To Renovate Before You Sell

To Renovate or Not To
Renovate Before You Sell | MyKCM

When thinking about selling, homeowners often feel they need to get their house ready with some remodeling to make it more appealing to buyers. However, with so many buyers competing for available homes right now, renovations may not be as vital as they would be in a more normal market. Here are two things to keep in mind if you're thinking of selling this season.

1. There aren't enough homes for sale right now.

A normal market has a 6-month supply of houses for sale, but today's housing inventory sits far below that benchmark. According to the National Association of Realtors (NAR), there's only a 1.9-month supply of homes available today. As a result, buyer competition is high and homes are only on the market for about 21 days, during which time many receive multiple offers from hopeful buyers.

In a competitive market that's moving so quickly, it makes sense to sell your house when buyers are scooping homes up as fast as they're being listed. Spending costly time and money on renovations before you sell might just mean you'll miss your key window of opportunity. While certain repairs on your house may be important, your best move right now is to work with a real estate advisor to determine which improvements are truly necessary, and which ones are not likely to be deal-breakers for buyers.

Today, many buyers are more willing to take on home improvement projects themselves in order to get the home they're after, even if it means putting in a little extra work. Home Advisor explains:

When it comes to the number of home improvement projects completed, Gen Z homeowners are leading the pack, completing an average of 3.5 projects. Millennials closely follow Gen Z, taking on an average of 3.3 projects, followed by Gen X at 2.8 projects. Boomers completed an average of 2 projects, and the Silent Generation completed the fewest projects, on average, at 1.8 per household. Compared to 2019, millennials are spending 60% more on home improvement and doing on average 30% more projects.

In this market, it may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.

2. Focus on getting a good return on your investment.

When planning any bigger projects to tackle, you and your real estate agent will want to discuss the potential return on your investment and if those projects are worth the cost. Some homes do need a kitchen or bathroom renovation, roof repairs, or other major work, but definitely not all of them. You might be surprised by how well your house could fair in today's sellers' market. Hanley Wood states:

The 2020 Cost vs. Value report shows a predictable increase in costs for all 22 remodeling projects but a consistent dip in the perceived value of those projects at the time of home sale, as estimated by real-estate professionals in more than 100 metro areas across the U.S. This results in a slight downturn on the return on investment for nearly all projects relative to the trends we saw in last year's report.

Ideally, homeowners getting ready to move should try to avoid over-investing in big renovations if they won't make that money back when they sell their house. According to the 2020 State of Home Spending report from Home Advisor:

The average household spending on home services rose to $13,138, an increase over last year's survey results, where homeowners who did projects spent $9,081 on average in 2019.

Before you renovate, contact a local real estate professional to see if it's the best course of action. You may find out that putting your house on the market as-is will help you sell quickly, and it may result in the best return on your investment. Every home is different, but a conversation with your agent is mission-critical to make sure you make the right moves when selling this season.

Bottom Line

We're in a strong sellers' market, and that means you have the leverage to sell your house on your terms. Let's connect today to determine if renovating is really the best way to spend your time and money before you sell.

Posted by Tenby Dahman on April 1st, 2021 7:31 PM

Americans See Major Home Equity Gains

Americans See Major Home
Equity Gains [INFOGRAPHIC] | MyKCM

Some Highlights

  • Today's home price appreciation is driving equity higher throughout the country.
  • If your needs are changing and you're ready for a new home, your equity may be a great asset to power your next move.
  • Now is a great time to put your equity toward a down payment on the home of your dreams.
Posted by Tenby Dahman on March 19th, 2021 12:33 PM

How to Be a Competitive Buyer in Today's Housing Market

How to Be a Competitive Buyer
in Today's Housing Market [INFOGRAPHIC] | MyKCM

Some Highlights

  • With so few houses for sale today, it's important to be prepared when you're ready to buy a home.
  • Meeting with your lender early, knowing your must-haves and nice-to-haves, preparing for a bidding war, and keeping your emotions in check are all ways to gain confidence in the homebuying process.
  • If you're looking for an expert guide to help you navigate today's lightning-fast housing market, let's connect today.
Posted by Tenby Dahman on March 14th, 2021 12:16 PM

How Upset Should You Be about 3% Mortgage Rates?

How Upset Should You Be about
3% Mortgage Rates? | MyKCM

Last Thursday, Freddie Mac announced that their 30-year fixed mortgage rate was over 3% (3.02%) for the first time since last July. That news dominated real estate headlines that day and the next. Articles talked about the negative impact it may have on the housing market. However, we should realize two things:

1. The bump-up in rate should not have surprised anyone. Many had already projected that rates would rise slightly as we proceeded through the year.

2. Freddie Mac's comments about the rate increase were not alarming:

The rise in mortgage rates over the next couple of months is likely to be more muted in comparison to the last few weeks, and we expect a strong spring sales season.

A muted rise in rates will not sink the real estate market, and most experts agree that it will be a strong spring sales season.

What does this mean for you?

Obviously, any buyer would rather mortgage rates not rise at all, as any upward movement increases their monthly mortgage payment. However, let's put a 3.02% rate into perspective. Here are the Freddie Mac annual mortgage rates for the last five years:

  • 2016: 3.65%
  • 2017: 3.99%
  • 2018: 4.54%
  • 2019: 3.94%
  • 2020: 3.11%

Though 3.02% is not as great as the sub-3% rates we saw over the previous seven weeks, it's still very close to the all-time low (2.66% in December 2020).

And, if we expand our look at mortgage rates to consider the last 50 years, we can see that today's rate is truly outstanding. Here are the rates over the last five decades:

  • 1970s: 8.86%
  • 1980s: 12.7%
  • 1990s: 8.12%
  • 2000s: 6.29%
  • 2010s: 4.09%

Being upset that you missed the best mortgage rate ever is understandable. However, don't throw the baby out with the bathwater. Buying now still makes more sense than waiting, especially if rates continue to bump up this year.

Bottom Line

It's true that you may not get the same rate you would have five weeks ago. However, you will get a better rate than what was possible at almost any other point in history. Let's connect today so you can lock in a great rate while they stay this low.

Posted by Tenby Dahman on March 9th, 2021 8:16 AM

How to Prepare Your House for a Winning Sale This Spring [INFOGRAPHIC]

How to Prepare Your House for
a Winning Sale This Spring [INFOGRAPHIC] | MyKCM

Some Highlights

  • With so few homes available to buy today, houses are in high demand, and they're selling fast.
  • That means it's a great time to sell if you're ready to make a move.
  • Let's connect to make sure your house is ready for a top-dollar sale this spring. It may be closer than you think!
Posted by Tenby Dahman on March 5th, 2021 12:41 PM

Will Low Mortgage Rates Continue through 2021?

Will Low Mortgage Rates
Continue through 2021? | MyKCM

With mortgage interest rates hitting record lows so many times recently, some are wondering if we'll see low rates continue throughout 2021, or if they'll start to rise. Recently, Freddie Mac released their quarterly forecast, noting:

The average 30-year fixed-rate mortgage hit a record low over a dozen times in 2020 and the low interest rate environment is projected to continue through this year. We expect interest rates to average below 3% through the end of 2021. While this is a modest rise from 2020 averages, the recent vote by the Federal Reserve to keep interest rates anchored near zero should keep rates low.

As shown in the graph below, Freddie Mac is projecting low rates going forward with a modest rise that's expected to continue through 2022.Will
Low Mortgage Rates Continue through 2021? | MyKCMFreddie Mac isn't the only authority forecasting low rates with a slight rise. Fannie Mae, The Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR) also anticipate low rates with a small increase as 2021 continues on. Here's the quarterly breakdown of their projections and how they're expected to play out over the next year:Will
Low Mortgage Rates Continue through 2021? | MyKCMIt's important to note that, while a small change in interest rates can have a substantial impact on monthly mortgage payments, these rates are still incredibly low compared to where they were just a couple of years ago.

What does this mean for buyers?

Low mortgage rates are creating an outstanding opportunity for current homebuyers to get more for their money while staying within their budget. As the economy gets stronger and we recover from the challenges of 2020, it's natural for rates to potentially rise in response to a healthier economy. Mark Fleming, Chief Economist at First American, reminds us:

Rising interest rates reduce house-buying power and affordability, but are often a sign of a strong economy, which increases home buyer demand. By any historic standard, today's mortgage rates remain historically low and will continue to boost house-buying power and keep purchase demand robust.

With low rates fueling activity among hopeful buyers, there are a lot of people who are highly motivated and looking for homes to purchase right now. In this environment, it can be challenging to find a home to buy, so a local real estate agent will be key to your success if you're thinking of buying too. Working with a trusted real estate professional to navigate the process while rates are in your favor might be the best move you can make.

Bottom Line

If you're ready to buy a home, it may be wise to make your move before mortgage rates begin to rise. Let's connect to discuss how today's low rates can create more opportunities for you this year.

Posted by Tenby Dahman on February 18th, 2021 8:47 AM

Why It's Easy to Fall in Love with Homeownership- Colorado

Why It's Easy to Fall in Love
with Homeownership [INFOGRAPHIC] | MyKCM

Some Highlights

  • Homeownership provides comfort, stability, and security, and it makes you feel more connected to your community.
  • Your home is something to be proud of and is uniquely yours, so you can customize it to your heart's desire.
  • If you're ready to fall in love with a home of your own, let's connect to get you started on the path to homeownership.
Posted by Tenby Dahman on February 12th, 2021 9:52 AM

What's the Difference between an Appraisal and a Home Inspection?

What's the Difference between
an Appraisal and a Home Inspection? | MyKCM

If you're planning to buy a home, an appraisal is an important step in the process. It's a professional evaluation of the market value of the home you'd like to buy. In most cases, an appraisal is ordered by the lender to confirm or verify the value of the home prior to lending a buyer money for the purchase. It's also a different step in the process from a home inspection, which assesses the condition of the home before you finalize the transaction. Here's the breakdown of each one and why they're both important when buying a home.

Home Appraisal

The National Association of Realtors (NAR) explains:

A home purchase is typically the largest investment someone will make. Protect yourself by getting your investment appraised! An appraiser will observe the property, analyze the data, and report their findings to their client. For the typical home purchase transaction, the lender usually orders the appraisal to assist in the lender's decision to provide funds for a mortgage.

When you apply for a mortgage, an unbiased appraisal (which is required by the lender) is the best way to confirm the value of the home based on the sale price. Regardless of what you're willing to pay for a house, if you'll be using a mortgage to fund your purchase, the appraisal will help make sure the bank doesn't loan you more than what the home is worth.

This is especially critical in today's sellers' market where low inventory is driving an increase in bidding wars, which can push home prices upward. When sellers are in a strong position like this, they tend to believe they can set whatever price they want for their house under the assumption that competing buyers will be willing to pay more.

However, the lender will only allow the buyer to borrow based on the value of the home. This is what helps keep home prices in check. If there's ever any confusion or discrepancy between the appraisal and the sale price, your trusted real estate professional will help you navigate any additional negotiations in the buying process.

Home Inspection

Here's the key difference between an appraisal and an inspection. MSN explains:

In simplest terms, a home appraisal determines the value of a home, while a home inspection determines the condition of a home.

The home inspection is a way to determine the current state, safety, and condition of the home before you finalize the sale. If anything is questionable in the inspection process – like the age of the roof, the state of the HVAC system, or just about anything else – you as a buyer have the option to discuss and negotiate any potential issues or repairs with the seller before the transaction is final. Your real estate agent is a key expert to help you through this part of the process.

Bottom Line

The appraisal and the inspection are critical steps when buying a home, and you don't need to manage them by yourself. Let's connect today so you have the expert guidance you need to navigate through the entire homebuying process.

Posted by Tenby Dahman on January 26th, 2021 9:10 AM

Reasons to Hire a Real Estate Professional

Reasons to Hire a Real Estate
Professional [INFOGRAPHIC] | MyKCM

Some Highlights

  • Choosing the right real estate professional to work with is one of the most important decisions you can make in your homebuying or selling process.
  • The right agent can explain current market conditions and break down exactly what they mean for you.
  • If you're considering buying or selling a home this year, let's connect so you can work with someone who has the experience to answer all of your questions about pricing, contracts, negotiations, and more.
Posted by Tenby Dahman on January 8th, 2021 12:39 PM

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