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        <title>Real Estate Blog</title>
        <link>http://www.minneapolisurbanhomes.com/blog/2022-04/</link>
        <description></description>
<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/the-dream-of-homeownership-is-worth-the-effort.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/the-dream-of-homeownership-is-worth-the-effort.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>The Dream of Homeownership Is Worth the Effort</title>
    <description> <![CDATA[ 



 




If you’re in the market to buy a home this season, stick with it. Homebuyers face challenges in any market, and today’s is no exception. But if you persevere, your decision to purchase a home will be worth the effort in the end. In fact, a recent survey from Bankrate shows homeownership is so powerful that:




“Nearly three in four homeowners say they would still buy their current home if they had it to do [sic] all over again.”




That means the results – owning a home and the benefits that come with it – outweigh the effort needed to achieve their goal. If you’re a homebuyer, let that provide you with the confidence to know the work you’re putting in today will pay off for years to come. Here are a few reasons to stick with your search and focus on the outcome.


Homeownership Contributes Significantly to Your Financial Well-Being


The National Association of Realtors (NAR) lists several motivations to consider if you’re thinking about buying a home. One of the top financial reasons is the equity you build. As NAR says:




“Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity . . . Building equity in your home is a ready-made savings plan.”




Your equity is a powerful tool you can leverage in a number of ways. And with recent home price appreciation, homeowners are seeing record levels of equity today. That may be one reason why so many people view owning a home as a great investment and a top indicator of financial well-being. As the survey from Bankrate mentioned above shows:




“. . . Americans place a higher value on homeownership than on any other indicator of economic stability, . . .”




Owning a home ranks above other major accomplishments like retirement, having a successful career, and getting a college degree. That indicates just how impactful the financial benefits of homeownership truly are.


The Emotional Benefits of Owning a Home Are Powerful


Of course, homeownership is more than an investment. In their list of top reasons to buy a home, NAR also highlights some of the powerful, non-financial aspects of homeownership. Among them is the opportunity to customize your home to reflect your personality and needs. As they say:


“The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.”


Another benefit homeowners enjoy is the stability it provides. Homeowners typically stay put longer than renters. According to NAR, when you remain in one place longer than a few years, you can grow closer to your community. And that can enhance your sense of pride and lead to better relationships.


What Does That Mean for You?


The benefits of homeownership are powerful, as Leslie Rouda Smith, President of NAR, says:


&quot;From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable.”


Even if you face challenges in today’s market, the payoff when you succeed and purchase a home will be worth it.


Bottom Line


If you’re planning to buy a home this year, there are incredible benefits waiting for you at the end of your journey. Let’s connect to discuss everything homeownership has to offer.


 ]]> </description>
    <pubDate>Thu, 28 Apr 2022 14:58:00 -0500</pubDate>
</item>
<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/where-are-mortgage-rates-headed.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/where-are-mortgage-rates-headed.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Where Are Mortgage Rates Headed?</title>
    <description> <![CDATA[ 



 




There’s never been a truer statement regarding forecasting mortgage rates than the one offered last year by Mark Fleming, Chief Economist at First American:




“You know, the fallacy of economic forecasting is: Don't ever try and forecast interest rates and or, more specifically, if you're a real estate economist mortgage rates, because you will always invariably be wrong.”




Coming into this year, most experts projected mortgage rates would gradually increase and end 2022 in the high three-percent range. It’s only April, and rates have already blown past those numbers. Freddie Mac announced last week that the 30-year fixed-rate mortgage is already at 4.72.


Danielle Hale, Chief Economist at realtor.com, tweeted on March 31:




“Continuing on the recent trajectory, would have mortgage rates hitting 5 within a matter of weeks. . . .”




Just five days later, on April 5, the Mortgage News Daily quoted a rate of 5.02.


No one knows how swiftly mortgage rates will rise moving forward. However, at least to this point, they haven’t significantly impacted purchaser demand. Ali Wolf, Chief Economist at Zonda, explains:




“Mortgage rates jumped much quicker and much higher than even the most aggressive forecasts called for at the end of last year, and yet housing demand appears to be holding steady.”




Through February, home prices, the number of showings, and the number of homes receiving multiple offers all saw a substantial increase. However, much of the spike in mortgage rates occurred in March. We will not know the true impact of the increase in mortgage rates until the March housing numbers become available in early May.


Rick Sharga, EVP of Market Intelligence at ATTOM Data, recently put rising rates into context:




“Historically low mortgage rates and higher wages helped offset rising home prices over the past few years, but as home prices continue to soar and interest rates approach five percent on a 30-year fixed rate loan, more consumers are going to struggle to find a property they can comfortably afford.”




While no one knows exactly where rates are headed, experts do think they’ll continue to rise in the months ahead. In the meantime, if you’re looking to buy a home, know that rising rates do have an impact. As rates rise, it’ll cost you more when you purchase a house. If you’re ready to buy, it may make sense to do so sooner rather than later.


Bottom Line


Mark Fleming got it right. Forecasting mortgage rates is an impossible task. However, it’s probably safe to assume the days of attaining a 3 mortgage rate are over. The question is whether that will soon be true for 4 rates as well.


 ]]> </description>
    <pubDate>Wed, 13 Apr 2022 13:47:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/the-future-of-home-price-appreciation-and-what-it-means-for-you.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/the-future-of-home-price-appreciation-and-what-it-means-for-you.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>The Future of Home Price Appreciation and What It Means for You</title>
    <description> <![CDATA[ 



 




Many consumers are wondering what will happen with home values over the next few years. Some are concerned that the recent run-up in home prices will lead to a situation similar to the housing crash 15 years ago.


However, experts say the market is totally different today. For example, Odeta Kushi, Deputy Chief Economist at First American, tweeted just last week on this issue:




“. . . We do need price appreciation to slow today (it’s not sustainable over the long run) but high price growth today is supported by fundamentals- short supply, lower rates &amp; demographic demand. And we are in a much different &amp; safer space: better credit quality, low DTI [Debt-To-Income] &amp; tons of equity. Hence, a crash in prices is very unlikely.”




Price appreciation will slow from the double-digit levels the market has seen over the last two years. However, experts believe home values will not depreciate (where a home would lose value).


To this point, Pulsenomics just released the latest Home Price Expectation Survey – a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. It forecasts home prices will continue appreciating over the next five years. Below are the expected year-over-year rates of home price appreciation based on the average of all 100+ projections:




2022: 9


2023: 4.74


2024: 3.67


2025: 3.41


2026: 3.57




Those responding to the survey believe home price appreciation will still be relatively high this year (though half of what it was last year), and then return to more normal levels over the next four years.


What Does This Mean for You as a Buyer?


With a limited supply of homes available for sale and both prices and mortgage rates increasing, it can be a challenging market to navigate as a buyer. But buying a home sooner rather than later does have its benefits. If you wait to buy, you’ll pay more in the future. However, if you buy now, you’ll actually be in the position to make future price increases work for you. Once you buy, those rising home prices will help you build your home’s value, and by extension, your own household wealth through home equity.


As an example, let’s assume you purchased a $360,000 home in January of this year (the median price according to the National Association of Realtors rounded up to the nearest $10K). If you factor in the forecast for appreciation from the Home Price Expectation Survey, you could accumulate over $96,000 in household wealth over the next five years (see graph below):





Bottom Line


If you’re trying to decide whether to buy now or wait, the key is knowing what’s expected to happen with home prices. Experts say prices will continue to climb in the years ahead, just at a slower pace. So, if you’re ready to buy, doing so now may be your best bet for your wallet. It’ll also give you the chance to use the future home price appreciation to build your own net worth through rising equity. If you want to get started, let’s connect today.


 ]]> </description>
    <pubDate>Fri, 08 Apr 2022 11:16:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/what-you-need-to-budget-for-when-buying-a-home.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/what-you-need-to-budget-for-when-buying-a-home.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>What You Need To Budget for When Buying a Home</title>
    <description> <![CDATA[ 



 




When it comes to buying a home, it can feel a bit intimidating to know how much you need to save and where to find that information. But you should know, you’re not expected to have all the answers yourself. There are many trusted professionals who can help you understand your finances and what you’ll need to budget for throughout the process.


To get you started, here are a few things experts say you should plan for along the way.


1. Down Payment


As you set your savings goal for your purchase, your down payment is likely already top of mind. And, like many other people, you may believe you need to set aside 20 of the home’s purchase price for that down payment – but that’s not always the case. The National Association of Realtors (NAR) says:




“One of the biggest misconceptions among housing consumers is what the typical down payment is and what amount is needed to enter homeownership. Having this knowledge is critical to know what to save . . .”




The good news is, you may be able to put as little as 3.5 (or even 0) down in some situations. To understand your options, partner with a trusted professional who can go over the various loan types, down payment assistance programs, and what each one requires.


2. Earnest Money Deposit


Another item you may want to plan for is an earnest money deposit. While it isn’t required, it’s common in today’s highly competitive market because it can help your offer stand out in a bidding war.


So, what is it? It’s money you pay as a show of good faith when you make an offer on a house. This deposit works like a credit. You’re using some of the money you already saved for your purchase to show the seller you’re committed and serious about their house. It’s not an added expense, it’s just paying some of that up front. First American explains what it is and how it works:




“The deposit made from the buyer to the seller when submitting an offer. This deposit is typically held in trust by a third party and is intended to show the seller you are serious about purchasing their home. Upon closing the money will generally be applied to your down payment or closing costs.”




In other words, an earnest money deposit could be the very first check you’ll write toward your purchase. The amount varies by state and situation. Realtor.com elaborates:




“The amount you’ll deposit as earnest money will depend on factors such as policies and limitations in your state, the current market, what your real estate agent recommends, and what the seller requires. On average, however, you can expect to hand over 1 to 2 of the total home purchase price.”




Work with a real estate advisor to understand any requirements in your local area and what they’ve recommended for other buyers in your market. They’ll help you determine if it’s something that could be a useful option for you.


3. Closing Costs


The next thing to plan for is your closing costs. The Federal Trade Commission (FTC) defines closing costs as:




“The upfront fees charged in connection with a mortgage loan transaction. …generally including, but not limited to a loan origination fee, title examination and insurance, survey, attorney’s fee, and prepaid items, such as escrow deposits for taxes and insurance.”




Basically, your closing costs cover the fees for various people and services involved in your transaction. NAR has this to say about how much to budget for:




“A home costs more than just the sale price. For example, closing costs—which make up about 2 to 5 of the home’s purchase price—are a major added expense…Lenders provide a Closing Disclosure at least three business days prior to closing on a mortgage. But buyers will need to budget for these added costs ahead of time to avoid sticker shock days before closing.”




The key takeaway is savvy buyers plan ahead for these expenses so they can come into the process prepared. Freddie Mac sums it up like this:




“If you're in the market to buy a home, your down payment is probably top of mind. And rightly so - it's likely the biggest cost of homebuying. However, it is not the only cost and it's critical you understand all your expenses before diving in. The more prepared you are for your down payment, closing and other costs, the smoother your homebuying journey will be.”




Bottom Line


Knowing what to budget for in the homebuying process is essential. To make sure you understand these and any other expenses that may come up, let’s connect so you have reliable expertise on what to expect when you buy a home.


 ]]> </description>
    <pubDate>Tue, 05 Apr 2022 12:34:00 -0500</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/balancing-your-wants-and-needs-as-a-homebuyer-today.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/balancing-your-wants-and-needs-as-a-homebuyer-today.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Balancing Your Wants and Needs as a Homebuyer Today</title>
    <description> <![CDATA[ 



 




Since the number of homes for sale is low today, it can feel challenging to find one that checks all your boxes. But if you know which features are absolutely essential in your next home and which ones are just nice bonuses, you can land a home that fits your needs.


Danielle Hale, Chief Economist for realtor.com, explains it like this:




“Focus on the goal you set out for yourself, like your list of must-haves and nice-to-haves and your budget, . . . Stick to that. Be persistent.”




So how do you go about creating your list of desired features? The first step is to get pre-approved for your mortgage. Pre-approval helps you better understand your budget, and that plays an important role in how you’ll craft your list. After all, you don’t want to fall in love with a home that’s too far out of reach.


Once you have a good grasp of your budget, you can begin to list all the features of a home you would like. Here’s a great way to think about them before you begin:




Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).


Nice-To-Haves – These are features that you’d love to have but can live without. Nice-To-Haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of the these, it’s a contender (examples: a second home office, garage, etc.).


Dream State– This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: farmhouse sink, multiple walk-in closets, etc.).




Finally, once you’ve created your list and categorized it in a way that works for you, discuss it with your real estate advisor. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your needs.


Bottom Line


Crafting your home search checklist may seem like a small task, but it can save you time and money. It’s also one of the keys to being successful in today’s competitive market. Let’s connect so we can work together to find a home that fits your wants and needs.


 ]]> </description>
    <pubDate>Mon, 04 Apr 2022 11:03:00 -0500</pubDate>
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