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        <title>Real Estate Blog</title>
        <link>http://www.minneapolisurbanhomes.com/blog/2023-01/</link>
        <description></description>
<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/lower-mortgage-rates-are-bringing-buyers-back-to-the-market.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/lower-mortgage-rates-are-bringing-buyers-back-to-the-market.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Lower Mortgage Rates Are Bringing Buyers Back to the Market</title>
    <description> <![CDATA[ 



 




As mortgage rates rose last year, activity in the housing market slowed down. And as a result, homes started seeing fewer offers and stayed on the market longer. That meant some homeowners decided to press pause on selling.


Now, however, rates are beginning to come down—and buyers are starting to reenter the market. In fact, the latest data from the Mortgage Bankers Association (MBA) shows mortgage applications increased last week by 7 compared to the week before.


So, if you’ve been planning to sell your house but you’re unsure if there will be anyone to buy it, this shift in the market could be your chance. Here’s what experts are saying about buyers returning to the market as we approach spring.


Mike Fratantoni, SVP and Chief Economist, MBA:




“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers.”




Lawrence Yun, Chief Economist, National Association of Realtors (NAR):




“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”




Thomas LaSalvia, Senior Economist, Moody’s Analytics:




&quot;We expect the labor market to remain robust, wages to continue to rise—maybe not at the pace that they did during the pandemic, but that will open up some opportunity for folks to enter homeownership as interest rates stabilize a bit.&quot;




Sam Khater, Chief Economist, Freddie Mac:




“Homebuyers are waiting for rates to decrease more significantly, and when they do, a strong job market and a large demographic tailwind of Millennial renters will provide support to the purchase market.”




Bottom Line


If you’ve been thinking about making a move, now’s the time to get your house ready to sell. Let’s connect so you can learn about buyer demand in our area the best time to put your house on the market.


 ]]> </description>
    <pubDate>Tue, 31 Jan 2023 10:41:00 -0600</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/whats-really-happening-with-home-prices.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/whats-really-happening-with-home-prices.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>What’s Really Happening with Home Prices?</title>
    <description> <![CDATA[ 



 




Some Highlights




If you’re thinking about selling your house, recent headlines about home prices falling month-over-month may have you second guessing your decision—but perspective matters.


While home prices are down slightly month-over-month in some markets, home values are still up almost 10 nationally on a year-over-year basis. A nearly 10 gain is still dramatic compared to the more normal level of appreciation, which is 3-4.


Let’s connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.




 ]]> </description>
    <pubDate>Mon, 30 Jan 2023 14:02:00 -0600</pubDate>
</item>
<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/the-3-factors-that-affect-home-affordability.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/the-3-factors-that-affect-home-affordability.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>The 3 Factors That Affect Home Affordability</title>
    <description> <![CDATA[ 



 




If you’ve been following the housing market over the last couple of years, you’ve likely heard about growing affordability challenges. But according to experts, the key factors that determine housing affordability are projected to improve this year. Selma Hepp, Executive, Deputy Chief Economist at CoreLogic, shares:




“. . . with slowly improving affordability and a more optimistic economic outlook than previously believed, the housing market could show resilience in 2023.”




The three measures used to establish home affordability are home prices, mortgage rates, and wages. Here’s a closer look at each one.


1. Mortgage Rates


Mortgage rates shot up to over 7 last year, causing many buyers to put their plans on hold. But things are looking different today as rates are starting to come down. George Ratiu, Senior Economist at realtor.com, explains:




“Let’s celebrate some good news. . . . mortgage rates are down. With inflation showing a tangible slowdown, I do expect mortgage rates to follow suit in the months ahead.”




Even a small change in rates can impact your purchasing power. Nadia Evangelou, Director of Forecasting for the National Association of Realtors (NAR), gives this context:




“With a 6 rate instead of 7, buyers pay about $2,700 less every year on their mortgage. As a result, owning a home becomes affordable to about 1.4 million more renters and 4.3 million more homeowners.”




If 7 rates paused your homebuying plans last year, this could be the opportunity you need to get back in the game. Be sure to work with a team of experts who know the latest on mortgage rates and can give you the best advice for the current market.


2. Home Prices


The second factor at play is home prices. Home prices have made headlines over the past few years because they skyrocketed during the pandemic. When discussing home prices in 2023, Lawrence Yun, Chief Economist at NAR, says:




“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”




So, while prices will likely be flat this year in some markets, others could see small gains or slight declines. It all depends on your local area. For insight into what’s happening in your market and how prices are impacting affordability, reach out to a trusted real estate professional.


3. Wages


The final component in the affordability equation is wages. The graph below uses data from the Bureau of Labor Statistics (BLS) to show how wages have increased over time:





When you think about affordability, remember the full picture includes more than just mortgage rates and prices. Wages need to be factored in as well. Because wages have been rising, many buyers have renewed opportunity in the market.


While affordability hurdles are not completely going away this year, based on current trends and projections, 2023 should bring some sense of relief to homebuyers who have faced growing challenges. As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), says:




“Rates are expected to move lower for the year, and home price growth is expected to cool, both of which will help affordability challenges.”




Bottom Line


If you have questions, let’s connect. You’ll also want to make sure you have a trusted lender so you can explore your financing options. You may be closer to owning a home than you think.


 ]]> </description>
    <pubDate>Tue, 24 Jan 2023 15:55:00 -0600</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/want-to-sell-your-house-price-it-right.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/want-to-sell-your-house-price-it-right.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Want To Sell Your House? Price It Right.</title>
    <description> <![CDATA[ 



 




Last year, the housing market slowed down in response to higher mortgage rates, and that had an impact on home prices. If you’re thinking of selling your house soon, that means you’ll want to adjust your expectations accordingly. As realtor.com explains:




“. . . some of the more prominent pandemic trends have changed, so sellers might wish to adjust accordingly to get the best deal possible.”




In a more moderate market, how you price your house will make a big difference to not only your bottom line, but to how quickly your house could sell. And the reality is, homes priced right are still selling in today’s market.


Why Pricing Your House Appropriately Matters


Especially today, your asking price sends a message to potential buyers.


If it’s priced too low, you may leave money on the table or discourage buyers who may see a lower-than-expected price tag and wonder if that means something is wrong with the home.


If it’s priced too high, you run the risk of deterring buyers. When that happens, you may have to lower the price to try to reignite interest in your house when it sits on the market for a while. But be aware that a price drop can be seen as a red flag by some buyers who will wonder what that means about the home.


To avoid either headache, price it right from the start. A real estate professional knows how to determine that ideal asking price. They balance the value of homes in your neighborhood, current market trends, buyer demand, the condition of your house, and more to find the right price. This helps lead to stronger offers and a greater likelihood your house will sell quickly.


The visual below helps summarize the impact your asking price can have:





Bottom Line


Homes that are priced at current market value are still selling. To make sure you price your house appropriately, maximize your sales potential, and minimize your hassle, let’s connect.


 ]]> </description>
    <pubDate>Mon, 23 Jan 2023 10:35:00 -0600</pubDate>
</item>
<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/what-to-expect-from-the-housing-market-in-2023.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/what-to-expect-from-the-housing-market-in-2023.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>What To Expect From the Housing Market in 2023</title>
    <description> <![CDATA[ 



 




The 2022 housing market has been defined by two key things: inflation and rapidly rising mortgage rates. And in many ways, it's put the market into a reset position.


As the Federal Reserve (the Fed) made moves this year to try to lower inflation, mortgage rates more than doubled – something that’s never happened before in a calendar year. This had a cascading impact on buyer activity, the balance between supply and demand, and ultimately home prices. And as all those things changed, some buyers and sellers put their plans on hold and decided to wait until the market felt a bit more predictable.


But what does that mean for next year? What everyone really wants is more stability in the market in 2023. For that to happen we’ll need to see the Fed bring inflation down even more and keep it there. Here’s what housing market experts say we can expect next year.


What’s Ahead for Mortgage Rates in 2023?


Moving forward, experts agree it’s still going to be all about inflation. If inflation is high, mortgage rates will be as well. But if inflation continues to fall, mortgage rates will likely respond. While there may be early signs inflation is easing as we round out this year, we’re not out of the woods just yet. Inflation is still something to watch in 2023.


Right now, experts are factoring all of this into their mortgage rate forecasts for next year. And if we average those forecasts together, experts say we can expect rates to stabilize a bit more in 2023. Whether that’s between 5.5 and 6.5, it’s hard for experts to say exactly where they’ll land. But based on the average of their projections, a more predictable rate is likely ahead (see chart below):





That means, we’ll start the year out about where we are right now. But we could see rates tick down if inflation continues to drop. As Greg McBride, Chief Financial Analyst at Bankrate, explains:




“. . . mortgage rates could pull back meaningfully next year if inflation pressures ease.”




In the meantime, expect some volatility as rates will likely fluctuate in the weeks ahead. If we see inflation come back under control, that would be good news for the housing market.


What Will Happen to Home Prices Next Year?


Homes prices will always be defined by supply and demand. The more buyers and fewer homes there are on the market, the more home prices will rise. And that’s exactly what we saw during the pandemic.


But this year, things changed. We’ve seen home prices moderate and housing supply grow as buyer demand pulled back due to higher mortgage rates. The level of moderation has varied by local area – with the biggest changes happening in overheated markets. But do experts think that will continue?


The graph below shows the latest home price forecasts for 2023. As the different colored bars indicate, some experts are saying home prices will appreciate next year, and others are saying home prices will come down. But again, if we take the average of all the forecasts (shown in green), we can get a feel for what 2023 may hold.





The truth is probably somewhere in the middle. That means nationally, we’ll likely see relatively flat or neutral appreciation in 2023. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:




“After a big boom over the past two years, there will essentially be no change nationally . . . Half of the country may experience small price gains, while the other half may see slight price declines.”




Bottom Line


The 2023 housing market is going to be defined by mortgage rates, and rates will be determined by what happens with inflation. The best way to keep a pulse on what experts are projecting for next year is to lean on a trusted real estate advisor. Let’s connect.


 ]]> </description>
    <pubDate>Mon, 16 Jan 2023 10:59:00 -0600</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/key-terms-to-know-when-buying-a-home.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/key-terms-to-know-when-buying-a-home.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Key Terms To Know When Buying a Home</title>
    <description> <![CDATA[ 



 




Some Highlights




Buying a home is a major transaction that can seem even more complex when you don’t understand the terms used throughout the process.


If you’re looking to become a homeowner this year, it’s important to know these housing terms and how they relate to the current market so you feel confident throughout the homebuying process.


Let’s connect so you have expert answers for any questions as they come up.




 ]]> </description>
    <pubDate>Fri, 13 Jan 2023 15:13:00 -0600</pubDate>
</item>
<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/todays-housing-market-is-nothing-like-15-years-ago.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/todays-housing-market-is-nothing-like-15-years-ago.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Today’s Housing Market Is Nothing Like 15 Years Ago</title>
    <description> <![CDATA[ 



 




There’s no doubt today’s housing market is very different than the frenzied one from the past couple of years. In the second half of 2022, there was a dramatic shift in real estate, and it caused many people to make comparisons to the 2008 housing crisis. While there may be a few similarities, when looking at key variables now compared to the last housing cycle, there are significant differences.


In the latest Real Estate Forecast Summit, Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), drew the comparisons below between today’s housing market and the previous cycle:





Looking at the facts, it’s clear: today is very different than the housing market of 15 years ago.


There’s Opportunity in Real Estate Today


And in today’s market, with inventory rising and less competition from other buyers, there’s opportunity right now. According to David Stevens, former Assistant Secretary of Housing:




“So be advised…this may be the one and only window for the next few years to get into a buyer’s market. And remember…as the Federal Reserve data shows…home prices only go up and always recover from recessions no matter how mild or severe. Long term homeowners should view this market…right now…as a unique buying opportunity.”




Bottom Line


Today’s housing market is nothing like the real estate market 15 years ago. If you’re a buyer right now, this may be the chance you’ve been waiting for.


 ]]> </description>
    <pubDate>Wed, 11 Jan 2023 10:52:00 -0600</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/3-best-practices-for-selling-your-house-this-year.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/3-best-practices-for-selling-your-house-this-year.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>3 Best Practices for Selling Your House This Year</title>
    <description> <![CDATA[ 



 




A new year brings with it the opportunity for new experiences. If that resonates with you because you’re considering making a move, you’re likely juggling a mix of excitement over your next home and a sense of attachment to your current one.


A great way to ease some of those emotions and ensure you’re feeling confident in your decision is to keep these three best practices in mind.


1. Price Your Home Right


The housing market shifted in 2022 as mortgage rates rose, buyer demand eased, and the number of homes for sale grew. As a seller, you’ll want to recognize things are different now and price your house appropriately based on where the market is today. Greg McBride, Chief Financial Analyst at Bankrate, explains:




“Price your home realistically. This isn’t the housing market of April or May, so buyer traffic will be substantially slower, but appropriately priced homes are still selling quickly.”




If you price your house too high, you run the risk of deterring buyers. And if you go too low, you’re leaving money on the table. An experienced real estate agent can help determine what your ideal asking price should be.


2. Keep Your Emotions in Check


Today, homeowners are living in their houses longer. According to the National Association of Realtors (NAR), since 1985, the average time a homeowner has owned their home has increased from 5 to 10 years (see graph below):





This 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 loved ones 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 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


While you may love your decor and how you’ve customized your home over the years, not all buyers will feel the same way about your design. That’s why it’s so important to make sure you focus on your home’s first impression so it appeals to as many buyers as possible. As NAR says:




“Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. The right arrangements can move you into a higher price-point and help buyers fall in love the moment they walk through the door.”




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. A real estate professional can help you with tips to get your house ready to sell.


Bottom Line


If you’re considering selling your house, let’s connect so you have the help you need to navigate through the process while prioritizing these best practices.


 ]]> </description>
    <pubDate>Thu, 05 Jan 2023 16:17:00 -0600</pubDate>
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<item>
    <guid>https://www.minneapolisurbanhomes.com/blog/avoid-the-rental-trap-in-2023.html</guid>
    <link>https://www.minneapolisurbanhomes.com/blog/avoid-the-rental-trap-in-2023.html</link>
        <author>richard@drgmpls.com (Richard Newman)</author>
        <title>Avoid the Rental Trap in 2023</title>
    <description> <![CDATA[ 



 




If you’re a renter, you likely face an important decision every year: renew your current lease, start a new one, or buy a home. This year is no different. But before you dive too deeply into your options, it helps to understand the true costs of renting moving forward.


In the past year, both current renters and new renters have seen their rent go up based on information from realtor.com:




“Three out of four renters (74.2) who have moved in the past 12 months reported seeing their rent increase. The strain from recent rent hikes isn’t exclusive to renters who have recently moved. Nearly two-thirds of renters (63.2) who have lived in their current rental between 12 and 24 months, and likely renewed their lease, have also reported increases in their rent.”




And if you look back at historical data, that shouldn’t come as surprise. That’s because, according to the Census, rents have been rising fairly consistently since 1988 (see graph below):





So, if you’re considering renting as an option in 2023, it’s worth weighing whether this trend is likely to continue. The 2023 Housing Forecast from realtor.com expects rents will keep climbing (see graph below):





That forecast projects rents will increase by 6.3 in the year ahead (shown in green). When compared to the blue bars in the graph, it’s clear that the 2023 projection doesn’t call for an increase as drastic as the ones renters have seen over the past two years, but it’s still above the historical average for rent hikes between 2013-2019.


That means, if you’re planning to rent again this year and you’ve not yet renewed your lease, you may pay more when you do.


Homeownership Provides an Alternative to Rising Rents


These rising costs may make you reconsider what other alternatives you have. If you're looking for more stability, it could be time to prioritize homeownership. One of the many benefits of owning your own home is it provides a stable monthly cost that you can lock in for the duration of your loan. As Freddie Mac says:




“Monthly rent payments may increase over time, but a fixed-rate mortgage will ensure that you're paying the same amount each month. With a fixed-rate mortgage, your interest rate is locked in for the life of loan. Steady payments allow you to budget wisely and make plans for the future.”




If you’re planning to make a move this year, locking in your monthly housing costs for the duration of your loan can be a major benefit. You’ll avoid wondering if you’ll need to adjust your budget to account for annual increases like you would if you left your housing payment up to your landlord and their renewal cycle.


Homeowners also enjoy the added benefit of home equity, which has grown substantially. In fact, the latest Homeowner Equity Insight report from CoreLogic shows the average homeowner gained $34,300 in equity over the last 12 months. As a renter, your rent payment only covers the cost of your dwelling. When you pay your mortgage on a house, you grow your wealth through the forced savings that is your home equity.


Bottom Line


If you’re thinking of renting this year, it’s important to keep in mind the true costs you’ll face. Let’s chat to see how you can begin your journey to homeownership today.


 ]]> </description>
    <pubDate>Wed, 04 Jan 2023 11:15:00 -0600</pubDate>
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