Going into 2023, there was a lot of talk about a possible recession that would cause the housing market to crash. Some in the media were even forecasting home prices would drop by as much as 10-20%—and that might have made you feel a bit unsure about buying a home.

But here’s what actually happened: home prices went up more than usual. Brian D. Luke, Head of Commodities at S&P Dow Jones Indices, explains:

“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years.”

To put last year’s growth into context, the graph below uses data from Freddie Mac on how home prices have changed each year going back to 1980. The dotted line shows the long-term average for appreciation:

The big takeaway? Home prices almost always go up.

As an article from Forbes says:

“. . . the U.S. real estate market has a long and reliable history of increasing in value over time.”

In fact, since 1980, the only time home prices dropped was during the housing market crash (shown in red in the graph above). Fortunately, the market today isn’t like it was in 2008. For starters, there aren’t enough available homes to meet buyer demand right now. On top of that, homeowners have a tremendous amount of equity, so they’re on much stronger footing than they were back then. That means there won’t be a wave of foreclosures that causes prices to fall.

The fact that home values went up every single year except those four in red is why owning a home can be one of the smartest moves you can make. When you’re a homeowner, you own something that typically becomes more valuable over time. And as your home’s value appreciates, your net worth grows.

So, if you’re financially stable and prepared for the costs and expenses of homeownership, buying a home might make a lot of sense for you. If you’re ready to start thinking about purchasing, let’s connect to talk about your goals and what’s available in our area.

If you’re trying to buy a home and are having a hard time finding one you can afford, it may be time to consider a fixer-upper. That’s a house that needs a little elbow grease or some updates, but has good bones. Fixer-uppers can be a really great option if you’re looking to break into the housing market or want to stretch your budget further. According to NerdWallet:

“Buying a fixer-upper can provide a path to homeownership for first-time home buyers or a way for repeat buyers to afford a larger home or a better neighborhood. With the relatively low inventory of homes for sale these days, a move-in ready home can be hard to find, especially if you’re on a budget.”

Basically, since the number of homes for sale is still so low, if you’re only willing to tour homes that have all your dream features, you may be cutting down your options too much and making it harder on yourself than necessary. It may be time to cast a wider net.

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

Here’s some information that can help you pinpoint what you truly need so you can be strategic in your home search. First, make a list of all the features you want in a home. From there, work to break those features into categories like this:

• Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle.
• 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.
• 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.

Once you’ve sorted your list in a way that works for you, share it with your real estate agent. They’ll help you find homes that deliver on your top needs right now and have the potential to be your dream home with a little bit of sweat equity. Lean on their expertise as you think through what’s possible, what features are easy to change or add, and how to make it happen. According to Progressive:

“Many real estate agents specialize in finding fixer-uppers and have a network of inspectors, contractors, electricians, and the like.”

Your agent can also offer advice on which upgrades and renovations will set you up to get the greatest return on your investment if you ever decide to sell down the line.

If you haven’t found a home you love that’s in your budget, it may be worth thinking through all your options, including fixer-uppers. Sometimes the perfect home for you is the one you perfect after buying it. To see what’s available in our area, let’s connect.

If you’re planning to buy your first home, saving up for all the costs involved can feel daunting, especially when it comes to the down payment. That might be because you’ve heard you need to save 20% of the home’s price to put down. Well, that isn’t necessarily the case.

Unless specified by your loan type or lender, it’s typically not required to put 20% down. That means you could be closer to your homebuying dream than you realize.

As The Mortgage Reports says:

“Although putting down 20% to avoid mortgage insurance is wise if affordable, it’s a myth that this is always necessary. In fact, most people opt for a much lower down payment.”

According to the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, for all homebuyers today it’s only 15%. And it’s even lower for first-time homebuyers at just 8% (see graph below):

The big takeaway? You may not need to save as much as you originally thought.

Learn About Resources That Can Help You Toward Your Goal

According to Down Payment Resource, there are also over 2,000 homebuyer assistance programs in the U.S., and many of them are intended to help with down payments.

Plus, there are loan options that can help too. For example, FHA loans offer down payments as low as 3.5%, while VA and USDA loans have no down payment requirements for qualified applicants.

With so many resources available to help with your down payment, the best way to find what you qualify for is by consulting with your loan officer or broker. They know about local grants and loan programs that may help you out.

Don’t let the misconception that you have to have 20% saved up hold you back. If you’re ready to become a homeowner, lean on the professionals to find resources that can help you make your dreams a reality. If you put your plans on hold until you’ve saved up 20%, it may actually cost you in the long run. According to U.S. Bank:

“. . . there are plenty of reasons why it might not be possible. For some, waiting to save up 20% for a down payment may “cost” too much time. While you’re saving for your down payment and paying rent, the price of your future home may go up.”

Home prices are expected to keep appreciating over the next 5 years – meaning your future home will likely go up in price the longer you wait. If you’re able to use these resources to buy now, that future price growth will help you build equity, rather than cost you more.

Keep in mind that you don’t always need a 20% down payment to buy a home. If you’re looking to make a move this year, let’s connect to start the conversation about your homebuying goals.