Have Home Values Hit Bottom?

It is difficult to predict with certainty if home values have hit bottom, as real estate markets can be affected by various factors such as interest rates, the economy, and supply and demand. However, some industry experts and economists suggest that the housing market has shown signs of stabilizing and may have hit bottom in certain regions. Nevertheless, it's important to keep in mind that the housing market can be unpredictable and subject to fluctuations, and that specific local markets may be impacted differently. It's always recommended to do your own research and consult with real estate professionals before making any decisions.

putting down 20% is a common misconception when buying a home

putting down 20% is a common misconception when buying a home. While a 20% down payment is often recommended, it's not a requirement. There are many loan options available that allow for lower down payments, such as FHA loans which only require a minimum of 3.5% down payment. Additionally, many lenders offer programs for first-time homebuyers with even lower down payment requirements. It's important to explore all options and choose the one that works best for your financial situation.

Experts Forecast a Turnaround in the Housing Market in 2023

many experts are forecasting a turnaround in the housing market in 2023, after a period of slowdown due to the COVID-19 pandemic. Factors such as low mortgage rates, increasing demand, and a shortage of inventory are expected to drive up home prices and lead to a more active market. However, it's important to note that real estate markets can be highly local and can vary greatly depending on specific region and city. So, the prediction for a nationwide turnaround may not hold true for all areas.

Mortgage Rates Historically DECLINE in Recessions

During a recession, the demand for borrowing decreases, which leads to lower interest rates as lenders compete to attract borrowers. Additionally, central banks often take measures to reduce interest rates to stimulate the economy during a recession, which also contributes to lower mortgage rates. However, it's worth noting that the relationship between the economy and interest rates is complex, and other factors such as inflation and government policies can also have an impact.

Homeownership in New York can be a powerful tool for building wealth over time.

Homeownership in New York can be a powerful tool for building wealth over time. As you make mortgage payments, you are not only paying off the loan but also building equity in the property. Over time, the value of the property may increase, leading to further appreciation in the equity you hold. Additionally, owning a home often provides a stable and appreciating asset, which can be a source of financial security in retirement or a source of funding for other financial goals. However, it's important to consider the responsibilities and costs associated with homeownership, such as property taxes, maintenance, and repairs.

Lower Mortgage Rates Are Bringing Buyers Back to the Market

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: "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." 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.”

Why You Shouldn’t Fear Today’s Foreclosure Headlines

If you’ve seen recent headlines about foreclosures surging in the housing market, you’re certainly not alone. There’s no doubt, the stories in the media can be pretty confusing right now. They may even make you think twice about buying a home for fear that prices could crash. The reality is, the data shows a foreclosure crisis is not where the market is headed, and understanding what that really means is mission critical if you want to know the truth about what’s happening today. Here’s a deeper look. According to the Year-End 2022 U.S. Foreclosure Market Report from ATTOM, foreclosure filings are up 115% from 2021, but down 34% from 2019. As media headlines grab onto this 115% increase, it’s more important than ever to put that percentage into context. While the number of foreclosure filings did more than double last year, we need to remember why that happened and how it compares to more normal, pre-pandemic years in the market. Thanks to the forbearance program and other relief options for homeowners, foreclosure filings were down to record-low levels in 2020 and 2021, so any increase last year is — no surprise — a jump up. Rick Sharga, Executive VP of Market Intelligence at ATTOM, notes: “Eighteen months after the end of the government’s foreclosure moratorium, and with less than five percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic. It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures.” Clearly, these options meant millions of homeowners could stay in their homes, allowing them to get back on their feet during a very challenging period. With home values rising at the same time, many homeowners who may have found themselves facing foreclosure under other circumstances were able to leverage their equity and sell their houses rather than face foreclosure, and that trend continues today. And remember, as the graph below shows, foreclosures today are far below the record-high 2.9 million that were reported in 2010 when the housing market crashed. So, while foreclosures are rising, keeping perspective in mind is key. As Bill McBride, Founder and Author of Calculated Risk, noted just last week: “The bottom line is there will be an increase in foreclosures over the next year (from record low levels), but there will not be a huge wave of distressed sales as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.”