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3 Key Factors Affecting Home Affordability

Over the past year, a lot of people have been talking about housing affordability and how tight it’s gotten. But just recently, there’s been a little bit of relief on that front. Mortgage rates have gone down since their most recent peak in October. But there’s more to being able to afford a home than just mortgage rates.

To really understand home affordability, you need to look at the combination of three important factors: mortgage rates, home prices, and wages. Let’s dive into the latest data on each one to see why affordability is improving.

1. Mortgage Rates

Mortgage rates have come down in recent months. And looking forward, most experts expect them to decline further over the course of the year. Jiayi Xu, an economist at Realtor.com, explains:

“While there could be some fluctuations in the path forward … the general expectation is that mortgage rates will continue to trend downward, as long as the economy continues to see progress on inflation.”

And even a small change in mortgage rates can have a big impact on your purchasing power, making it easier for you to afford the home you want by reducing your monthly mortgage payment.

2. Home Prices

The second important factor is home prices. After going up at a relatively normal pace last year, they’re expected to continue rising moderately in 2024. That’s because even with inventory projected to grow slightly this year, there still aren’t enough homes for sale for all the people who want to buy them. According to Lisa Sturtevant, Chief Economist at Bright MLS:

“More inventory will be generally offset by more buyers in the market. As a result, it is expected that, overall, the median home price in the U.S. will grow modestly . . .”

That’s great news for you because it means prices aren’t likely to skyrocket like they did during the pandemic. But it also means it’ll probably cost you more to wait. So, if you’re ready, willing, and able to buy, and you can find the right home, purchasing before more buyers enter the market and prices rise further might be in your best interest.

3. Wages

Another positive factor in affordability right now is rising income. The graph below uses data from the Federal Reserve to show how wages have grown over time: 

SEE GRAPH HERE

If you look at the blue dotted trendline, you can see the rate at which wages typically rise. But on the right side of the graph, wages are above the trend line today, meaning they’re going up at a higher rate than normal.

Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage. That’s because you don’t have to put as much of your paycheck toward your monthly housing cost.

What This Means for You

Home affordability depends on three things: mortgage rates, home prices, and wages. The good news is, they’re moving in a positive direction for buyers overall.

Bottom Line

If you're thinking about buying a home, it's important to know the main factors impacting affordability are improving. To get the latest updates on each, give me a call or send me a message.

SOURCE: Keeping Current Matters

12 Ways to Promote Wellness in Your Home

SOURCE: Houzz

Experts share tips for enhancing physical and mental health at home

Designing for wellness at home means creating spaces that are good for physical and mental health. It incorporates everything from improving air quality to using textures, materials, colors, shapes and furniture layouts that ease anxiety and make us feel closer to nature. Here experts weigh in, offering advice on how people can promote wellness at home. While there are many elements to take into account when building a new home, from the foundation through the roof, this list focuses on small, doable adjustments you can make.

1. Eliminate Tripping Hazards

Jamie Gold is a certified kitchen designer, a Mayo Clinic-certified wellness coach and author of the book Wellness by Design: A Room-by-Room Guide to Optimizing Your Home for Health, Fitness and Happiness. In her book, safety is an important aspect of staying well at home. This includes making sure contractors are licensed and that they build up to code, choosing nontoxic materials and minimizing the chances of an at-home injury.

“Eliminating the possibilities for falls at home is crucial,” Gold says. Some of the biggest tripping hazards around the house include loose area rugs, cords, shoes, bags and pet bowls.

2. Create a Landing Zone

To minimize tripping hazards, Gold recommends creating a spot where everyone in the household has a specified place to put their outside-world things away before entering the rest of the home. She prefers to take her shoes off and put on house shoes. This prevents tracking germs inside. In addition to a designated place for shoes and a place where people can sit and put them on, she also recommends having a spot for everything you need to grab before heading out of the house, including coats, bags, phones, sunglasses and keys.

“We are always time-pressured to find things like a backpack, sports equipment or keys before leaving the house,” she says. Staying well-organized means not only not tripping over these things, but also saving time and preventing the frustration and stress that come from frantic last-minute searches when you’re trying to get out the door.

3. Declutter

Another way to stay organized is by getting rid of things you don’t need or that don’t bring you joy. “Start by focusing on what’s needed for the space for functionality, and by looking at what’s getting in your way,” Gold says.

This doesn’t mean you have to clear out all of your favorite objects. It means editing them down to the things that make you happy and having designated display spots for them. In this living room by CAVdesign, wall-hung shelves and drawers keep books, sculptures, photos and other objects neatly corralled.

4. Set Up Your Kitchen for Healthy Meal Prep

Gold is also a big advocate of promoting preparation of healthy foods in the kitchen. This means an uncluttered and hygenic space that functions well for meal preparation. Some of her suggestions include maintaining clean and clear countertops; creating designated zones for prep, cooking and cleanup; incorporating a steam oven or combi oven into your kitchen to help keep the nutrients in your food; and keeping small appliances you’ll need for healthy meal prep, like a blender for smoothies, close at hand.

Another way to promote healthful eating at home is to keep your food well-organized and easy to access. Use clear glass containers to organize food in the fridge, and make sure everything in your pantry or food cabinets is easy to see and access. The easier it is to see and reach the healthy food, the easier it is to grab it for a snack or for it to inspire a menu.

5. Create Connections to the Outdoors

Promoting wellness at home has brought about a relatively new standard for buildings and designers. The International Well Building Institute offers the WELL Building Standard, which focuses on “features of the built environment that impact human health and well-being,” as well as a WELL-accredited professional certification for designers.

Laura Britt is a WELL-certified interior designer who helped the owners of the Dallas home seen here create a healthy home. She forged strong connections to nature throughout the house. These glass doors off the kitchen allow the couple who live here to enjoy views of their backyard while working at their kitchen island. The room also includes a window seat that looks out on the garden. And the glass doors provide direct access to a deck as well as an edible garden. This makes it easy to gather fresh ingredients for garden-to-table meals.

6. Replace Bathroom Fans

Interior designer Laura Freeman of Merits Design Group has always focused on designing for wellness and is a WELL accredited professional. She gave the bathroom seen here a light remodel but says the most important move she made was replacing the fan. “This house was 24 years old, and so was its bathroom fan. Older fans are ineffective and don’t extract allergens and moisture like they should,” she says. “It’s so easy for mold to build up. Even a subtle amount can create poor indoor air quality.”

In general, Freeman recommends fans that are Energy Star-rated and have a CFM (the amount of air movement measured in cubic feet per minute) of 80 or higher.

7. Incorporate Biophilic Design

Interior designer Shannon Ggem thoroughly studied how design can affect health in health care-related settings. Then she worked on two self-contained room types for immunocompromised children undergoing lifesaving treatment, and for their accompanying family members, for the Los Angeles Ronald McDonald House. She is also a speaker on biophilic design for the National Kitchen and Bath Association.

Biophilic design is based on the idea that people have an innate tendency to seek connections to nature. Because we spend so much time indoors, bringing organic materials, shapes and colors that remind us of nature to interiors helps us feel connected to the natural world. In the bedroom seen here, Ggem used natural colors and fibers to promote wellness. For example, the cotton velvet settee is a deep leafy green.

A fiddlehead fig adds a natural element to the corner of the room and helps with air filtration. The homeowners also wanted wall-to-wall carpeting in the bedroom for sensory purposes — softness under their feet and sound control. “This carpeting is 100% wool, which is natural and which humans have figured out how to keep clean for many years,” Ggem says.

8. Design a Bedroom for Relaxation and Peace

A good night’s sleep is so important to maintain good health, so make your bedroom a relaxing sanctuary. Gold recommends mitigating any light in the bedroom that can affect sleep. Whether the illumination comes from a streetlight, a floodlight or passing cars, she suggests using blackout shades or blackout-fabric-lined drapes to help ensure a good night’s sleep.

Ggem emphasizes the importance of maintaining natural circadian rhythms, which can be interrupted by indicator lights. These are the small lights on things like surge protectors, air filters and clocks. She recommends covering them with electrical tape to keep them from affecting sleep patterns.

9. Replace Fake Plants With Real Plants (or Nothing at All)

While fake plants can provide some of the good feelings of biophilia, Freeman advises her clients to get rid of them. “Fake plants harbor so much dust and allergens. Unless you’re constantly cleaning them, it’s impossible to keep the air quality clean with them around,” she says. While she’s all for real plants and the air filtration they can provide, she knows some people just can’t keep up with maintaining them. “Getting rid of fake plants still improves the current air quality by eliminating of all that dust,” she says.

10. Use Nontoxic Fabrics and Foams

When buying new pieces of furniture or accessories like rugs, do your research on materials. Part of creating a home that promotes wellness is choosing nontoxic furnishings. For the home seen here, the owners both worked in the health care field and were very aware of how many toxins could be brought into a home through furniture and finishes. They hired Britt to outfit the home to the WELL Building Standard.

“We were extremely diligent in designing with nontoxic materials to lessen the toxic load in the space. All furnishings were carefully vetted to ensure they were healthy and didn’t bring toxins into the home,” she says. Toxins include heavy metals, formaldehyde, PVC and volatile organic compounds.

For example, all the rugs in the house are woven from organic materials, including jute, cotton, wool and silk. And not only are the upholstery fabrics organic and free of carcinogens, but the cushions they cover are made of formaldehyde-free foam and down.

11. Set Up a Clean, Safe and Comfortable Workspace

In the last few years, more people than ever have found out what it’s like to work from home. And many have learned that the spaces they had to haphazardly set up are giving them aches and pains.

“The ergonomic aspects of an office include an adjustable chair, setting the keyboard position and having a phone that functions well on speaker or headphones,” Gold says. “If you’re working with paper, you’ll need good light. Lighting includes natural, task and ambient light.” She also notes that while natural light is wonderful to have in a workspace, you’ll need to place your screen out of the way of any annoying glare, or add window coverings to eliminate it.

Also, an office can tend have a tangle of hazardous cords. Plan accordingly with furniture placement or outlets in the floor to avoid tripping hazards.

Because sitting all day has been declared the new smoking, Gold recommends preventing sedentary days. A yoga ball in lieu of a desk chair or an adjustable standing desk like the one seen here can help. “I also recommend ‘dancing between drafts.’ After I finish a task, I like to turn the music up and dance like nobody’s watching and hope that no one is,” Gold says with a laugh. “I also like to walk around the room when I’m on the phone.”

12. Create Calm Spaces

Calm spaces provide balance. This includes balance between colors and elements and mirroring two sides of the room to create symmetry.

“Bilateral symmetry is familiar to us because so much of nature has bilateral symmetry. For example, think of how you can fold certain leaves in half and they are the same on both sides,” Ggem says. “Human beings respond positively to bilateral symmetry because of nature.” Bringing this kind of familiar and neatly organized balance to a room’s layout helps make it calming.

SOURCE: Houzz

How to Get Started in Real Estate Investing (6 Actionable Steps)

SOURCE: Bigger Pockets

Many people dream of investing in real estate, but most never take the first step. If you want to get started in real estate investing, there are six actionable steps you can take today.

Step 1: Define Your Goals

No two real estate investors have the same goals. While one investor has an interest in flipping homes, another wants to invest heavily in rental properties. 

Define your goals based on your financial situation, risk tolerance, and long-term investment strategy.

Step 2: Educate Yourself on Real Estate Investing

There’s no such thing as having too much knowledge of real estate investing. The more you learn, the more confidence you’ll have in getting started. 

As you educate yourself, pay extra attention to market trends, successful investment strategies employed by experienced investors, and how to best use your knowledge and money to your advantage.

Step 3: Network With Experienced Real Estate Investors

You can read as much as you want about real estate investing, but there’s no replacement for networking with experienced real estate investors.  There are many benefits of doing so, including but not limited to:

  • Gain practical insights: Learn from the real-life experiences and challenges faced by seasoned investors.

  • Expand your professional network: Build connections that can lead to partnerships, mentorship, and investment opportunities.

  • Stay updated on market trends: Keep abreast of the latest market developments and investment strategies.

  • Access to resources and opportunities: Discover new resources, tools, and potential investment deals through your network.

  • Receive support and advice: Benefit from the guidance and advice of experienced investors.

Step 4: Choose a Specific Real Estate Investing Strategy

It’s one thing to say that you want to invest in real estate. It’s another thing entirely to do so with a purpose. Your success is based largely on your ability to choose the right investing strategy.

Some of the most commonly used real estate investing strategies include:

  • House hacking

  • The BRRRR strategy

  • The PRR strategy

  • House flipping

  • Live and flip

  • Real estate wholesaling

Learn as much as you can about each specific strategy to determine which one is best for you as a beginner. 

Step 5: Market Research

There’s no replacement for in-depth market research. It’s a risk to invest before you know the ins and outs of your market. At a minimum, your research should include the following:

  • Local economic trends: Understanding the economic health and growth prospects of the area.

  • Property values and trends: Tracking the changes in property values over time.

  • Rental market dynamics: Assessing the demand for rentals, average rents, and occupancy rates.

  • Local laws and regulations: Being aware of zoning laws, rental regulations, and tax implications.

  • Neighborhood characteristics: Evaluating factors like safety, amenities, schools, and future development plans.

Step 6: Assemble Your Team

You’re only as good as the team you build around you. Here are the types of professionals you need on your side:

  • Real estate agents: They provide valuable market insights and help in finding the best investment properties.

  • Lenders: Crucial for securing financing options tailored to your investment strategy and financial situation.

  • Tax and financial service professionals: Offer guidance on tax implications and financial planning to maximize your investment’s profitability.

  • Property managers: Essential for managing the day-to-day operations of rental properties, ensuring tenant satisfaction and property maintenance.

  • Contractors: Their expertise is vital for property renovations and repairs, impacting the value and appeal of your investments.

  • Professional services: Includes experts like appraisers and surveyors, who provide information for informed investment decisions.

  • Legal team: Important for navigating real estate laws, contracts, and legal disputes, thus protecting your investments legally.

  • Wholesalers: Provide access to off-market deals and potential investment opportunities at lower prices.

  • Insurance: Protects your investment properties against risks and unforeseen events, which secures your financial interests.

Your Journey Begins

Now that you know the basics of how to get started in real estate investing, you’re no longer lost and looking for answers. When you’re ready, take the first step on your journey—you won’t regret it!

SOURCE: Bigger Pockets

The Perfect Home Could Be the One You Perfect After Buying

There’s no denying mortgage rates and home prices are higher now than they were last year and that’s impacting what you can afford. At the same time, there are still fewer homes available for sale than the norm. These are two of the biggest hurdles buyers are facing today. But there are ways to overcome these things and still make your dream of homeownership a reality.

As you set out to make a purchase this season, you’ll want to be strategic. This includes taking a close look at your wish list and considering what features you really need in your next home versus which ones are nice-to-have. This will help you avoid overextending your budget or limiting your pool of options too much because you’re searching for that perfect home.

Danielle Hale, Chief Economist at Realtor.com, explains:

“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, . . . Another key point is to avoid stretching your budget, as tempting as it may be . . .”

To help identify what you truly need, make a list of all the features you’ll want to see. From there, work to break those features into categories. Here’s a great way to organize your list:

  • 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 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 these, it’s a contender (examples: a second home office, a 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: a pool, multiple walk-in closets, etc.).

If you’re only willing to tour homes that have all of your dream features, you may be cutting down your options too much and making it harder on yourself (and your budget) than necessary.

While you’d love to have granite countertops or a pool in the backyard, those are both things you could potentially add after you move. Instead, it may be best to focus on finding the things that you can’t change (like location or a certain number of rooms). Then, you can upgrade or add some of the other features or finishes you want later on.

Sometimes the perfect home is the one you perfect after buying it.

Once you’ve categorized your list in a way that works for you, discuss your top priorities with your real estate agent. 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 top needs.

Bottom Line

With the current affordability challenges and limited housing supply, you’ll want to be strategic so you can find a home that meets your needs while staying within your budget.

How Long Does It Take To Buy a House?

SOURCE: Realtor.com

How long does it take to buy a house? While estimating a timeline for homebuying will depend on many variables, real estate experts estimate that the average time required is around four months.

This timeline is important for buyers to keep in mind for a variety of reasons. Many buyers might hope to time their home purchase with when their rental lease is up. Other buyers might want to pace their house hunt so that they are settled in their new home before the start of school. Still other buyers might also be home sellers who first need to close on the sale of their old house before they can buy their next house.

In short, homebuyers might need to fit their home search into any number of time-sensitive situations, so knowing how long the buying process typically takes can help them plan accordingly. Plus, buyers should know that four months is how long it might take if everything goes smoothly. If problems crop up—with the home inspection, appraisal, mortgage, or other things—then the real estate buying process could take even longer.

Buying a house may take time, but there are good reasons why it’s no impulse purchase. To help illuminate what’s going on, here’s a rundown of the various stages you’ll encounter while home shopping to help you plan your buying timeline just right.

Step 1: Get pre-approved for a mortgage

Your first step shouldn’t be to check out homes; it should be to get mortgage pre-approval from a mortgage lender or broker. This is presuming you aren’t planning to make an all-cash offer to a seller, but rather need a loan to make your goal of home buying happen.

“Homebuyers will want to speak to a mortgage lender or  broker to start the loan process early so there are no surprises,” says real estate agent Beverley Hourlier with Hilltop Chateau Realty, in San Diego, CA.

There are a couple of reasons for this: One, unless you’re really organized, it will take you a while to gather all the documents you need to show your lender for your loan, including pay stubs and tax forms. Two, if the mortgage lender finds out that your finances are less than ideal for homeownership—because of, for instance, a poor credit score—it can take months to clean up your finances so you’re in better standing. Oh, and you’ll need to make sure you’ve got enough cash so you can afford to make a decent down payment on your mortgage, too.

If your finances are in good shape, you can get mortgage pre-approval, which is a contract that the lender will lend you a certain amount of money. Being pre-approved for a mortgage and having this paperwork in hand is a major asset, because it shows sellers that you can afford their house and mean business, and it’s a prime way to negotiate with a home seller. (Keep in mind that mortgage pre-approval is different than mortgage pre-qualification).

If your financial circumstances don’t change much by the time you close this real estate deal, you can ask a lender to extend that loan promise for an additional 90 to 120 days or longer; you can also lock in a great interest rate so it doesn’t rise by the time you’re actually buying a house.

Step 2: Find your dream home

While looking at real estate listings online is fun and easy, things slow down once you get to the point where you’re visiting houses in person. After all, buyers can’t just pop in whenever they want. Instead, you’ll have to schedule an appointment for a home tour that work for the home sellers, too.

So in the same way buyers have to kiss a lot of frogs before finding a prince, you’ll likely need to spend some time house hunting, and see a lot of homes before you find one you love. On average, buyers see 10 houses before they make an offer, but that number can be much higher.

But any good real estate agent will tell you that it’s time well spent. According to  agent Melanie Atkinson with Coldwell Banker Residential Real Estate, in Tampa, FL, when buying a house, “The last thing you want is to feel rushed or make a decision in haste that you will later regret.”

Step 3: Prepare for closing day

Once you’ve found a house you love, made an offer that’s been accepted, and are under contract to purchase the property (which can typically happen in a few days), the waiting game really begins.

On average, it takes around 50 days to close on a loan for buying a house, from the time lenders pre-approve your mortgage to underwriting the loan to the day you sign all the documents and move into your new home.

Can you see now why getting pre-approval early is so important for the buying process? In fact, securing a loan is the most common holdup in buying a house.

Even with a pre-approval, it can still take 30 days for the lender to do its due diligence by conducting a home appraisal to make sure it’s a good investment (since after all, the lender’s money is on the line) and underwriting your mortgage.

Meanwhile, if you’re under contract to buy a particular piece of real estate, it will also take time for you and your real estate agent to do your own due diligence to make sure the house isn’t hiding some glaring flaw you’ll regret inheriting. You can do this by checking the home sellers’ disclosure statements for any problems in the house that they’re aware of, and also hiring a home inspector to check out the house from top to bottom for any problems. All of this takes time. Closing is a not a time to rush; you and your agent will want to make sure to do everything right.

Bottom line: As much as people complain about how long it takes to buy a house, it’s all in the interests of making sure you’re happy once you’re a homeowner and this piece of real estate is finally yours. So when in doubt, there is no better time to start than now! If you’re worried you’ll find your dream house too soon, there are ways to negotiate with a seller and their agent so that it all works out.

SOURCE: Realtor.com