http://fgallegos.cbdistinctive.com/blog/archive_202008/sort_entrydatetime-desc/ With the strength of the current housing market growing every day and more Americans returning to work, a faster-than-expected recovery in the housing sector is already well underway. Regardless, many are still asking the question: will we see a wave of foreclosures as a result of the current crisis? Thankfully, research shows the number of foreclosures is expected to be much lower than what this country experienced during the last recession. Here’s why.According to Black Knight Inc., the number of those in active forbearance has been leveling-off over the past month (see graph below):Black Knight Inc. also notes, of the original 4,208,000 families granted forbearance, only 2,588,000 of these homeowners got an extension. Many homeowners have once again started to pay their mortgages, paid off their homes, or never went delinquent on their payments in the first place. They may have applied for forbearance out of precaution, but never fully acted on it (see graph below):The housing market, and homeowners, therefore, are in a much better position than many may think. Much of that has to do with the fact that today’s homeowners have more equity than most realize. According to John Burns Consulting, over 42% of homes are owned free and clear, meaning they are not tied to a mortgage. Of the remaining 58%, the average homeowner has $177,000 in equity. That number is keeping many homeowners afloat today and giving them options to avoid foreclosure.While ATTOM Data Solutions indicates that there is a potential for the number of foreclosures to increase throughout the country, it’s important to understand why they won’t rock the housing market this time around:“The United States faces a possible foreclosure surge over the coming months that could more than double the number of households threatened with eviction for not paying their mortgages.”That number may sound massive, but it is actually much smaller than it seems at first glance. Today’s actual quarterly active foreclosure number is 74,860. That’s over 7.5x lower than the number of foreclosures the country saw at the peak of the housing crash in 2009. When looking at the graph below, it’s clear that even if the number of quarterly foreclosures today doubles, as ATTOM Data Solutions indicates is a possibility (not a given), they will only reach what historically-speaking is a normalized range, far below what up-ended the housing market roughly 10 years ago.Equity is growing, jobs are returning, and the economy is slowly recovering, so the perfect storm for a wave of foreclosures is not realistically in the housing market forecast. As Odeta Kushi, Deputy Chief Economist for First American notes:“Alone, economic hardship and a lack of equity are each necessary, but not sufficient to trigger a foreclosure. It is only when both conditions exist that a foreclosure becomes a likely outcome.”While our hearts are with anyone who may end up in foreclosure as a result of this crisis, we do know that today’s homeowners have more options than they did 10 years ago. For some, it may mean selling their house and downsizing with that equity, which is a far better outcome than foreclosure.Bottom LineHomeowners today have many options to avoid foreclosure, and equity is surely helping to keep many afloat. Even if today’s rate of foreclosures doubles, it will still only hit a mark that is more in line with a historically normalized range, a very good sign for homeowners and the housing market. http://fgallegos.cbdistinctive.com/blog/8510/why-foreclosures-will-not-crush-the-housing-market-next-year/ Tue, 25 Aug 2020 04:47:41 -0700 Today’s housing market is making a truly impressive turnaround, and it’s also setting up some outstanding opportunities for buyers and sellers. Whether you’re thinking of buying or selling a home this year, there are perks today that are rarely available, and definitely worth looking into. Here are the top two.The Biggest Perk for Buyers: Low Mortgage RatesThe most impressive buyer incentive today is the average mortgage interest rate. Just last week, mortgage rates hit an all-time low for the eighth time this year. The 30-year fixed-rate is now averaging 2.88%, the lowest rate in the survey’s history, which dates back to 1971 (See graph below):This is a huge advantage for buyers. To put it in perspective, it means that today you can get a lower rate than any of the past two generations of homebuyers in your family if you decide to purchase at this time.In addition, the National Mortgage News notes how today’s buyers have increasing purchasing power due to these low mortgage rates:“Purchasing power rose 10% year-over-year…With interest rates hitting record lows, buyers were able to afford $32,000 “more house” as of July 23 than they could the year before with the same monthly payment.”This is a great perk for buyers who are hoping to potentially get more for their money in a home, something many are considering today as they re-evaluate the amount of space they ideally need for their families. It is an opportunity not seen in 50 years, and one not to be missed if the time is right for you to buy a home.The Biggest Perk for Sellers: Low InventoryToday, there are simply not enough houses on the market for the number of buyers looking to purchase them. According to the National Association of Realtors (NAR):“Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million).”The red bars in the graph below indicate that the inventory of homes coming into the market continues to decline. It was low as we entered the pandemic and has reduced even further this year. Houses today are selling faster than they’re being listed, and that’s creating an even greater supply shortage (See graph below):The lack of inventory has been a challenging situation for a while now, and with low mortgage rates fueling buyer demand, inventory is even harder for buyers to find today. Buyers are eager to purchase, and because of the shortage of homes available, they’re encountering more bidding wars. This is one of the factors keeping home prices strong, an advantage for sellers. Lawrence Yun, Chief Economist for NAR notes that this trend may continue, too:“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”With low inventory and high buyer demand, homeowners can potentially earn an increasing profit on their houses and sell them quickly in this sizzling summer market.Bottom LineWhether you’re thinking about buying or selling at home, there are some key perks available right now. Contact a local real estate professional today to discuss how they may play to your advantage in the local market. http://fgallegos.cbdistinctive.com/blog/8506/current-buyer-seller-perks-in-the-housing-market/ Wed, 19 Aug 2020 03:46:42 -0700 Some HighlightsA recent study shared by NAR notes that both buyers and sellers think an agent is more helpful than ever during the current health crisis.Expertise and professionalism are highly valued and can save buyers and sellers time and effort along the way.If you’re thinking of buying or selling a home this year, be sure you have a trusted professional on your side. http://fgallegos.cbdistinctive.com/blog/8499/a-real-estate-pro-is-more-helpful-now-than-ever/ Wed, 05 Aug 2020 08:38:19 -0700 In June, the number of first-time homebuyers accounted for 35% of the existing homes sold, a trend that’s been building steadily throughout the year. According to the National Association of Realtors (NAR):“The share of first-time buyers increased in March through June—right into the heart of the pandemic period and the surge in unemployment—and is now trending higher than the 29% to 32% average in past years since 2012.” (See graph below):Why the rise in first-time homebuying?NAR continues to say:“The major factor is, arguably, low mortgage rates. As of the week ended July 16, the 30-year fixed mortgage rate dropped to 2.98%. With rates so low that are locked in under a 30-year mortgage, the typical mortgage payment, estimated at $1,036, has fallen below the median rent, at $1,045. For potential home buyers who were thinking of purchasing a home anyway before the pandemic outbreak and who are likely to remain employed, the low mortgage rate may be the clincher.”Clearly, historically low mortgage rates are encouraging many to buy. With the average mortgage payment now estimated at a lower monthly cost than renting, it’s a great time for first-time homebuyers to enter the market. According to the Q2 2020 Housing Trends Report from the National Association of Homebuilders (NAHB):“Eighty-four percent of Gen Z’s planning to buy a home are first timers, compared to 68% of Millennials, 52% of Gen X’s, and 21% of Boomers. Looking at results by region shows that over 60% of prospective buyers in the Northeast and South are buying a home for the first time. The share is above 55% in the Midwest and West.”There are, however, challenges for first-time buyers. A recent survey conducted by NeighborWorks America also notes that understanding the homebuying process may be the most significant barrier for many hopeful homeowners:“Homeownership is a particular challenge for many, despite high levels of interest. Americans believe there are many benefits to homeownership and half of non-owners will seek information about the process in the next few years…a large share of non-owners say the process is too challenging and only a minority know where to find advice if they wanted it. And although many would seek the guidance of community and non-profit programs, only one in three non-owners are aware of such services.”If you’re among the first-time homebuyers who feel the process is complicated, you’re not alone. If you’re not sure where to begin or you simply want help in figuring out how to save for a home, finding a trusted real estate advisor to work with is a critical step toward your success. A real estate professional can help you understand the process, review your current situation, and guide you with a plan to help you to feel confident when buying a home.Bottom LineIf you’re interested in purchasing a home and need help getting started, reach out to a local real estate professional today to take advantage of the support available to guide you through each step of the way. http://fgallegos.cbdistinctive.com/blog/8488/guidance-and-support-are-key-when-buying-your-first-home/ Mon, 03 Aug 2020 05:49:36 -0700