How To Buy a Home Without Waiting for Lower Rates

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How To Buy a Home Without Waiting for Lower Rates.

Many people are hoping mortgage rates will come down before they buy a home. But will that actually happen? According to the latest forecasts, experts say rates will decline, but not by as much as a lot of people want.

The good news? Even if they don’t drop substantially, there are still ways to make buying a home more affordable.

How Much Will Rates Drop?

A few months ago, experts were forecasting mortgage rates could dip below 6% by the end of the year. But recent projections suggest that may not happen after all.

While mortgage rates are still expected to decline some later this year, projections from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo now show them stabilizing closer to the 6.5% to 7% range (see below):

a blue and white graph with numbers and textThat means if you’re holding off on buying a home in hopes of much lower mortgage rates, you may be waiting a while. And if you need to move because something in your life has changed, like a new job, a new baby, or a marriage – waiting that long may not be an option.

Creative Financing Options in Today’s Market

Since rates aren’t expected to decline as much as originally expected, it may be worth considering alternative financing options that could help you get into a home sooner rather than later. Here are three strategies to discuss with your lender to see if any of these make sense for you:

1. Mortgage Buydowns

A mortgage buydown allows you to pay an upfront fee to lower your mortgage rate for a set period of time. This can be especially helpful if you want or need a lower monthly payment early on. In fact, 27% of agents say first-time homebuyers are increasingly requesting buydowns from sellers in order to buy a home right now.

2. Adjustable-Rate Mortgages

Adjustable-rate mortgages (ARMs) typically start with a lower mortgage rate than a traditional 30-year fixed mortgage. This makes them an attractive option, especially if you expect rates to drop in the coming years or plan to refinance later.

And if you remember the housing crash, know that today’s ARMs aren’t like the risky ones back then. Lance Lambert, Co-Founder of ResiClub, helps drive this point home by saying:

“. . . ARM products today are different from many of the products issued in the mid-2000s. Before 2008, lenders often approved ARMs based on borrowers ability to pay the initial lower interest rates. And sometimes they didn’t even check that (remember Ninja loans). Today, adjustable-rate borrowers qualify based on their ability to cover a higher monthly payment, not just the initial lower payment.”

In simple terms, banks used to give loans without checking to see if buyers could afford them. Now, lenders verify income, assets, and jobs, reducing the risks associated with ARMs compared to the past.

3. Assumable Mortgages

An assumable mortgage allows you to take over the seller’s existing loan — including its lower mortgage rate. And with more than 11 million homes qualifying for this option according to U.S. News, it’s worth exploring if you want or need a better rate.

Bottom Line

Waiting for a big decline in mortgage rates may not be the best strategy. Instead, options like buydowns, ARMs, or assumable mortgages could make homeownership more affordable right now. Connect with a local lender to explore what works for you.

How does this impact your homebuying plans this year?

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Buyer Bright Spot: There Are More Homes on the Market

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Buyer Bright Spot: There Are More Homes on the Market.

The past few years have been challenging for homebuyers, especially with higher home prices and mortgage rates. And if you’re trying to buy a home, it’s easy to worry you won’t be able to find something in your budget.

But here’s what you need to know. The number of homes for sale has grown a whole lot lately and that’s true for both existing (previously lived-in) and newly built homes. Here’s a look at those two bright spots for buyers right now and why they may make it a bit easier to find the home you’re been looking for.

1. There Are 22% More Existing Homes for Sale

Data from Realtor.com says the number of existing homes for sale improved by an impressive 22% in 2024. And experts say your pool of options is expected to get even better this year. Forecasts show inventory is projected to grow another 11-15% by the end of this year (see graph below):

a graph of sales in inventoryHere’s why this is so good for your search. If you haven’t seen a house with all the features you need, just know that, as the number of homes for sale grows, you’ll have more options to choose from. That means a better chance of finding a home that checks all your boxes. As Ralph McLaughlin, Senior Economist at Realtor.com, says:

“It could be a particularly good time to get out into the market . . . you’re going to have more choice. And that’s not something that buyers have really had much over the past several years.”

2. There Are More Newly Built Homes on the Market

According to data from the Census and the National Association of Realtors (NAR), 31.1%, or roughly 1 in 3, homes on the market right now are newly built homes. That’s more than the norm (see charts below). But don’t worry, that’s not because builders are overdoing it – it’s just that they’re trying to catch up after years of underbuilding.

a graph of a pie chartAnd the best part is, since builders have been focusing on smaller homes with lower price points, you may actually find out new builds are less expensive than you’d expect. So, while a lot of people write off new construction because it’s easy to assume the costs are way higher, lately, that price gap isn’t as big as you’d think. As CNET says:

“If you live in an area where there’s a lot of new construction happening . . . you might be able to purchase a new house for a price similar to or even less than a pre-owned one.”

If you haven’t been able to find a home that’s in your budget, it’s time to ask your agent about new builds. If you don’t, you may have been cutting your pool of options by about a third.

Bottom Line

More choices could be the key to unlocking your homebuying goals in 2025. Talk to a local agent if you want to see what’s available in your area.

What features are you looking for in your next home? Let an agent know so they can put together a list of homes you’d love.

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Time in the Market Beats Trying To Time the Market

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Time in the Market Beats Trying To Time the Market.

a screenshot of a phone

Some Highlights

  • Are you torn between whether to buy a home now or wait? Consider this.
  • Forecasts show prices will climb for ​at least the next 5 years. If you wait, the price of a home will be higher later on. But, if you buy a $400K now, you could gain roughly $83K in equity as prices rise.
  • If you’re able to buy now, this equity is one reason why it’ll be worth it in the long run. Connect with an agent if you’re ready to talk through ways we can make it happen.
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Expert Forecasts for the 2025 Housing Market

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Expert Forecasts for the 2025 Housing Market.

Wondering what’s in store for the housing market this year? And more specifically, what it all means for you if you plan to buy or sell a home? The best way to get that information is to lean on the pros.

Experts are constantly updating and revising their forecasts, so here’s the latest on two of the biggest factors expected to shape the year ahead: mortgage rates and home prices.

Will Mortgage Rates Come Down?

Everyone’s keeping an eye on mortgage rates and waiting for them to come down. So, the question is really: how far and how fast? The good news is they’re projected to ease a bit in 2025. But that doesn’t mean you should expect to see a return of 3-4% mortgage rates. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:

 “Are we going to go back to 4%? Per my forecast, unfortunately, we will not. It’s more likely that we’ll go back to 6%.”

And the other experts agree. They’re forecasting rates could settle in the mid-to-low 6% range by the end of the year (see chart below):

a blue and white graph with numbers and textBut you should remember, this will continue to change as new information becomes available. Expert forecasts are based on what they know right now. And since everything from inflation to economic drivers have an impact on where rates go from here, some ups and downs are still very likely. So, don’t get caught up in the exact numbers here and try to time the market. Instead, focus on the overall trend and on what you can actually control.

A trusted lender and an agent partner will make sure you’ve always got the latest data and the context on what it really means for you and your bottom line. With their help, you’ll see even a small decline can help bring down your future mortgage payment.

Will Home Prices Fall?

The short answer? Not likely. While mortgage rates are expected to ease, home prices are projected to keep climbing in most areas – just at a slower, more normal pace. If you average the expert forecasts together, you’ll see prices are expected to go up roughly 3% next year, with most of them hitting somewhere in the 3 to 4% range. And that’s a much more typical and sustainable rise in prices (see graph below):

a graph of green and white textSo don’t expect a sudden drop that’ll score you a big deal if you’re thinking of buying this year. While that may sound disappointing if you’re hoping prices will come down, refocus on this. It means you won’t have to deal with the steep increases we saw in recent years, and you’ll also likely see any home you do buy go up in value after you get the keys in hand. And that’s actually a good thing. 

And if you’re wondering how it’s even possible prices are still rising, here’s your answer. It all comes down to supply and demand. Even though there are more homes for sale now than there were a year ago, it’s still not enough to keep up with all the buyers out there. As Redfin explains:

“Prices will rise at a pace similar to that of the second half of 2024 because we don’t expect there to be enough new inventory to meet demand.”

Keep in mind, though, the housing market is hyper-local. So, this will vary by area. Some markets will see even higher prices. And some may see prices level off or even dip a little if inventory is up in that area. In most places though, prices will continue to rise (as they usually do).

If you want to find out what’s happening where you live, you need to lean on an agent who can explain the latest trends and what they mean for your plans.

Bottom Line

The housing market is always shifting, and 2025 will be no different. With rates likely to ease a bit and prices rising at a more normal and sustainable pace, it’s all about staying informed and making a plan that works for you.

Reach out to a local real estate pro to get the scoop on what’s happening in your area and advice on how to make your next move a smart one.

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When Will Mortgage Rates Come Down?

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When Will Mortgage Rates Come Down?.

One of the biggest questions on everyone’s minds right now is: when will mortgage rates come down? After several years of rising rates and a lot of bouncing around in 2024, we’re all eager for some relief.

While no one can project where rates will go with complete accuracy or the exact timing, experts offer some insight into what we might see going into next year. Here’s what the latest forecasts show.

Mortgage Rates Are Expected To Ease and Stabilize in 2025

After a lot of volatility and uncertainty, the most updated forecasts suggest rates will start to stabilize over the next year, and should ease a bit compared to where they are right now (see graph below):

a blue and white graph with numbers

As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says: 

“While mortgage rates remain elevated, they are expected to stabilize.”

Key Factors That’ll Impact the Future of Mortgage Rates

It’s important to note that the timing and the pace of what happens with mortgage rates is one of the most challenging forecasts to make in the housing market. That’s because these forecasts hinge on a few key factors all lining up. So don’t be fooled, because while rates are expected to come down slightly, they’re going to be a moving target. And the ups and downs of ongoing economic drivers will likely stick around. Here’s a look at just a few of the things that’ll influence where they go from here:

  • Inflation: If inflation cools, rates could dip a bit more. On the flip side, if inflation rises or remains stubbornly high, rates may stay elevated longer.
  • Unemployment Rate: The unemployment rate also plays a significant role in upcoming decisions by the Federal Reserve (the Fed). And while the Fed doesn’t set mortgage rates, their actions do reflect what’s happening in the greater economy, which can have an impact.
  • Government Policies: With the next administration set to take office in January, fiscal and monetary policies could also affect how financial markets respond and where rates go from here.

Remember, these forecasts are based on the best information available right now. As new economic data comes out, experts will revise their projections accordingly. So, don’t try to time the market based on these forecasts alone.

Instead, the best thing you can do is focus on what you can control right now. Work on improving your credit score, put away any extra cash for your down payment, and automate your savings. All of these things will help you reach your homeownership goals even faster.

And be sure to connect with a trusted agent and a lender, so you always have the latest updates – and an expert opinion on what that means for your move.

Bottom Line

If you’re planning to move and want to stay informed about where mortgage rates are heading, connect with a trusted agent and lender. 

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Why Buying Now Is Worth It

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Why Buying Now Is Worth It.

a house with a blue sky and clouds

Some Highlights

  • You may be torn between buying a home now or waiting. But don’t forget to factor in the equity you’ll gain as prices rise.
  • Experts forecast prices will climb over the next 5 years – and based on those forecasts, you could gain about $90k in equity in that time.
  • So, you could wait, but you’ll miss out on a lot of equity if you do. If you’re ready and able to buy, let’s connect so you can start growing your wealth now.
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2025 Housing Market Forecasts: What To Expect

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2025 Housing Market Forecasts: What To Expect.

Looking ahead to 2025, it’s important to know what experts are projecting for the housing market. And whether you’re thinking of buying or selling a home next year, having a clear picture of what they’re calling for can help you make the best possible decision for your homeownership plans.

Here’s an early look at the most recent projections on mortgage rates, home sales, and prices for 2025.

Mortgage Rates Are Projected To Come Down Slightly

Mortgage rates play a significant role in the housing market. The forecasts for 2025 from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo show an expected gradual decline in mortgage rates over the course of the next year (see chart below):

No Caption ReceivedMortgage rates are projected to come down because continued easing of inflation and a slight rise in unemployment rates are key signs of a strong but slowing economy. And many experts believe these signs will encourage the Federal Reserve to lower the Federal Funds Rate, which tends to lead to lower mortgage rates. As Morgan Stanley says:

“With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly.”

Expect More Homes To Sell

The market will see an increase in both the supply of available homes on the market, as well as a rise in demand, as more buyers and sellers who have been sitting on the sidelines because of higher rates choose to make a move. That’s one big reason why experts are projecting an increase in home sales next year.

According to Fannie Mae, MBA, and NAR, total home sales are forecast to climb slightly, with an average of about 5.4 million homes expected to sell in 2025 (see graph below):

No Caption ReceivedThat would represent a modest uptick from the lower sales numbers in 2023 and 2024. For reference, about 4.8 million total homes were sold in 2023, and expectations are for around 4.5 million homes to sell this year.

While slightly lower mortgage rates are not expected to bring a flood of buyers and sellers back to the market, they certainly will get more people moving. That means more homes available for sale – and competition among buyers who want to purchase them.

Home Prices Will Go Up Moderately

More buyers ready to jump into the market will put continued upward pressure on prices. Take a look at the latest price forecasts from 10 of the most trusted sources in real estate (see graph below):

No Caption ReceivedOn average, experts forecast home prices will rise nationally by about 2.6% next year. But as you can see, there’s a range of opinions on how much prices will climb. Experts agree, however, that home prices will continue to increase moderately next year at a slower, more normal rate. But keep in mind, prices will always vary by local market.

Bottom Line

Understanding 2025 housing market forecasts can help you plan your next move. Whether you’re buying or selling, staying informed about these trends will ensure you make the best decision possible. Reach out to a trusted real estate agent to discuss how these forecasts could impact your plans.

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Why a Foreclosure Wave Isn’t on the Horizon

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Why a Foreclosure Wave Isn’t on the Horizon.

Even though data shows inflation is cooling, a lot of people are still feeling the pinch on their wallets. And those high costs on everything from gas to groceries are fueling unnecessary concerns that more people are going to have trouble making their mortgage payments. But, does that mean there’s a big wave of foreclosures coming?

Here’s a look at why the data and the experts say that’s not going to happen.

There Aren’t Many Homeowners Who Are Seriously Behind on Their Mortgages

One of the main reasons there were so many foreclosures during the last housing crash was because relaxed lending standards made it easy for people to take out mortgages, even when they couldn’t show they’d be able to pay them back. At that time, lenders weren’t being as strict when looking at applicant credit scores, income levels, employment status, and debt-to-income ratio.

But since then, lending standards have gotten a whole lot tighter. Lenders became much more diligent when assessing applicants for home loans. And that means we’re seeing more qualified buyers who have less of a risk of defaulting on their loans.

That’s why data from Freddie Mac and Fannie Mae shows the number of homeowners who are seriously behind on their mortgage payments (known in the industry as delinquencies) has been declining for quite some time. Take a look at the graph below:  No Caption Received

What this means is that, not only are borrowers more qualified, but they’re also finding ways to navigate through their challenges, exploring their repayment options, or maybe even using the record amount of equity they have to sell and avoid foreclosure entirely.

The Answer Is: There’s No Sign of a Wave Coming

Before there can be a significant rise in foreclosures, the number of people who can’t make their mortgage payments would need to rise significantly. But, since so many buyers are making their payments today and homeowners have so much equity built up, a wave of foreclosures isn’t likely.

Take it from Bill McBride of Calculated Risk – an expert on the housing market who, after closely following the data and market leading up to the crash, was able to see the foreclosure crisis coming in 2008. McBride says:

“We will NOT see a surge in foreclosures that would significantly impact house prices (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.”

Bottom Line

If you’re worried about a potential foreclosure crisis, know there’s nothing in the data to suggest that’ll happen. Buyers are more qualified now, and that’s one reason why they’re not falling seriously behind on their mortgage payments. 

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Housing Market Forecast for the 2nd Half of 2024 [INFOGRAPHIC]

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Housing Market Forecast for the 2nd Half of 2024 [INFOGRAPHIC].

No Caption Received

Some Highlights

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Housing Market Forecast: What’s Ahead for the 2nd Half of 2024

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Housing Market Forecast: What’s Ahead for the 2nd Half of 2024.

As we move into the second half of 2024, here’s what experts say you should expect for home prices, mortgage rates, and home sales.

Home Prices Are Expected To Climb Moderately

Home prices are forecasted to rise at a more normal pace. The graph below shows the latest forecasts from seven of the most trusted sources in the industry:

No Caption Received

The reason for continued appreciation? The supply of homes for sale. Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), explains:

“One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory.”

While inventory is up compared to the last couple of years, it’s still low overall. And because there still aren’t enough homes to go around, that’ll keep upward pressure on prices.

If you’re thinking of buying, the good news is you won’t have to deal with prices skyrocketing like they did during the pandemic. Just remember, prices aren’t expected to drop. They’ll continue climbing, just at a slower pace.

So, getting into the market sooner rather than later could still save you money in the long run. Plus, you can feel confident experts say your home will grow in value after you buy it.

Mortgage Rates Are Forecast To Come Down Slightly

One of the best pieces of news for both buyers and sellers is that mortgage rates are expected to come down a bit, according to Fannie Mae, the Mortgage Bankers Association (MBA), and NAR (see chart below):

No Caption ReceivedWhen you buy, even a small drop in mortgage rates can make a big difference in your monthly payments. For sellers, lower rates will bring more buyers back into the market, which can help you sell faster and potentially at a higher price. Plus, it may help you get off the fence, if you’ve been hesitant to sell due to today’s rates.

Home Sales Are Projected To Hold Steady

For 2024, the number of home sales will be about the same as last year and may even rise slightly. The graph below compares the 2024 home sales forecasts from Fannie Mae, MBA, and NAR to the 4.8 million homes that sold last year:

No Caption Received

The average of the three forecasts is about 5 million sales in 2024 – a small increase from 2023. Lawrence Yun, Chief Economist at NAR, explains why:

“Job gains, steady mortgage rates and the release of inventory from pent-up home sellers will lead to more sales.”

With more inventory available and mortgage rates expected to go down, a few more homes are expected to be sold this year compared to last year. This means more people will be able to move. Let’s work together to make sure you’re one of them.

Bottom Line

If you have any questions or need help navigating the market, reach out to a local real estate agent.

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