Prepare for Homeownership While You’re Waiting to Buy | July Market Update
Temperatures Rise While Home Prices Cool
We may be breaking the hottest temperature records across the country, but the good news is that home prices are starting to cool! For the first time since the pandemic, homes sold for 0.3% less than their asking prices in June. Despite this, nearly two-thirds of homes still sold above their listed prices. While mortgage rates and home prices remain at an average high, research shows 35% more homes available for sale compared to last year, though still 30% fewer than pre-pandemic levels.
The housing market is stabilizing, with conditions varying depending on the house and location. This shift means buyers might find better deals in their markets, and sellers may need to adjust their pricing expectations. For help in navigating the market for homes that fit within an ideal budget, reach out so we can plan together.1
Homeowners Gained $28K in Equity Over the Past Year
Homeowners have seen a significant increase in their net worth over the past year due to rising home prices. This growth in equity, the difference between a home’s current value and the remaining loan balance, has been substantial. With a strong demand for homes and limited supply, prices have soared, resulting in an average equity gain of $28,000 per homeowner, according to CoreLogic. If you bought your home before the pandemic, your equity gains are likely even higher, with a 37.5% increase in home values from May 2019 to May 2024. Homeowners now have substantial equity, approaching historic peaks, averaging close to $305,000 per owner. This increased equity can be leveraged for various purposes such as starting a business, funding education, or purchasing a new home.2
6 Homebuying Tips for Middle-Income Individuals
Middle-income individuals can achieve their homeownership dreams with the right strategies and determination. According to the Pew Research Center, middle-income households earn $62,000 to $187,000 annually. Despite the challenges of high rental costs and modest incomes, there are actionable steps to consider.
- Focus on getting your finances in shape by saving for a down payment of at least 3%-5%.
- Create a realistic budget that considers the local market and potential above-asking price offers.
- Flexibility in home preferences and locations can expand your options and potentially reduce competition.
- Explore mortgage assistance programs at local, state, and federal levels to find additional support.
It’s essential to stay committed to your goal to go further down the road to homeownership! With careful planning and perseverance, buying a home is possible, providing stability and fulfillment for you and your family.3
Did You Know?
While multi-generational households are common in many parts of Europe and Asia, it’s still a growing trend here in the United States. Research shows that the number of Americans who live in multigenerational homes has quadrupled since the 1970s. Many builders have recognized this trend and are offering floor plans to accommodate them.4
Where Military Homeownership Is Booming
Military homeownership has been steadily increasing since the 2008 financial crisis, with 11% of new mortgages being VA loans that often require no down payment. Over 90% of military members take advantage of this benefit when purchasing a home. Certain areas, like Des Moines, Iowa, show particularly high homeownership rates among veterans, often exceeding those of nonmilitary households.
Education about VA benefits is advantageous in this market, as many veterans may be unaware of their entitlements. Initiatives like our Hero Promotion or NAR’s Military Relocation Professional certification aim to support military homebuyers by providing valuable benefits that ease the financial stress of getting a mortgage. Recent efforts by the VA to lift bans on direct compensation to real estate professionals further enhance veterans’ access to competitive market representation. Understanding and leveraging VA benefits can significantly aid military families in achieving homeownership.5
Renters Can Feel Like a Homeowner While They Wait to Buy
Anticipating homeownership while navigating today’s market challenges can be stressful. Recognize that being a homeowner extends beyond mere ownership—it encompasses the joy of personalizing a space to call your own. Renters can still create a home that reflects their style and comforts, adapting to longer-than-expected rental periods due to various circumstances. By enhancing the current living environment, renters can not only improve their quality of life but also gain clarity on their preferences when they purchase a home. Embrace this phase positively—personalize the rental with removable décor, invest in quality furniture, cultivate greenery, and engage with your community. These steps not only enrich a current rental experience but also prepare renters for the future joys of homeownership.6
Sources: 1 yahoofinance.com; 2 keepingcurrentmatters.com; 3 nar.realtor; 4 theamericangenius.com; 5 cnbc.com; 6 rwmloans.com
