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How Homeownership Can Help Shield You from Inflation

How Homeownership Can Help Shield You from Inflation

How Homeownership Can Help Shield You from Inflation | MyKCM

If you’re following along with the news today, you’ve likely heard about rising inflation. You’re also likely feeling the impact in your day-to-day life as prices go up for gas, groceries, and more. These rising consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.

If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.

Homeownership Offers Stability and Security

Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.

Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. If you get a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate, says:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.” 

So even if other prices rise, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.

Use Home Price Appreciation to Your Benefit

While it’s true rising mortgage rates and home prices mean buying a house today costs more than it did a year ago, you still have an opportunity to set yourself up for a long-term win. Buying now lets you lock in at today’s rates and prices before both climb higher.

In inflationary times, it’s especially important to invest your money in an asset that traditionally holds or grows in value. The graph below shows how home price appreciation outperformed inflation in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):

How Homeownership Can Help Shield You from Inflation | MyKCM

So, what does that mean for you? Today, experts say home prices will only go up from here thanks to the ongoing imbalance in supply and demand. Once you buy a house, any home price appreciation that does occur will be good for your equity and your net worth. And since homes are typically assets that grow in value (even in inflationary times), you have peace of mind that history shows your investment is a strong one.

Bottom Line

If you’re ready to buy a home, it may make sense to move forward with your plans despite rising inflation. If you want expert advice on your specific situation and how to time your purchase, let’s connect.

Looking for a new home?

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here Anthem, Desert Hills, New River, Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.

Also, check out our mini-series North Valley Spotlight

The Dream of Homeownership Is Worth the Effort

The Dream of Homeownership Is Worth the Effort

The Dream of Homeownership Is Worth the Effort | MyKCM

If you’re in the market to buy a home this season, stick with it. Homebuyers face challenges in any market, and today’s is no exception. But if you persevere, your decision to purchase a home will be worth the effort in the end. In fact, a recent survey from Bankrate shows homeownership is so powerful that:

“Nearly three in four homeowners say they would still buy their current home if they had it to do [sic] all over again.”

That means the results – owning a home and the benefits that come with it – outweigh the effort needed to achieve their goal. If you’re a homebuyer, let that provide you with the confidence to know the work you’re putting in today will pay off for years to come. Here are a few reasons to stick with your search and focus on the outcome.

Homeownership Contributes Significantly to Your Financial Well-Being

The National Association of Realtors (NAR) lists several motivations to consider if you’re thinking about buying a home. One of the top financial reasons is the equity you build. As NAR says:

“Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity . . . Building equity in your home is a ready-made savings plan.”

Your equity is a powerful tool you can leverage in a number of ways. And with recent home price appreciation, homeowners are seeing record levels of equity today. That may be one reason why so many people view owning a home as a great investment and a top indicator of financial well-being. As the survey from Bankrate mentioned above shows:

“. . . Americans place a higher value on homeownership than on any other indicator of economic stability, . . .”

Owning a home ranks above other major accomplishments like retirement, having a successful career, and getting a college degree. That indicates just how impactful the financial benefits of homeownership truly are.

The Emotional Benefits of Owning a Home Are Powerful

Of course, homeownership is more than an investment. In their list of top reasons to buy a home, NAR also highlights some of the powerful, non-financial aspects of homeownership. Among them is the opportunity to customize your home to reflect your personality and needs. As they say:

“The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.”

Another benefit homeowners enjoy is the stability it provides. Homeowners typically stay put longer than renters. According to NAR, when you remain in one place longer than a few years, you can grow closer to your community. And that can enhance your sense of pride and lead to better relationships.

What Does That Mean for You?

The benefits of homeownership are powerful, as Leslie Rouda Smith, President of NAR, says:

“From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable.”

Even if you face challenges in today’s market, the payoff when you succeed and purchase a home will be worth it.

Bottom Line

If you’re planning to buy a home this year, there are incredible benefits waiting for you at the end of your journey. Let’s connect to discuss everything homeownership has to offer.

Looking for a new home?

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here Anthem, Desert Hills, New River, Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.

Also, check out our mini-series North Valley Spotlight

Expect Advice is the Best Advice

An Expert Advisor Will Give You the Best Advice in Today’s Market

An Expert Advisor Will Give You the Best Advice in Today’s Market | MyKCM

Having an experienced guide coaching you through the process of buying or selling a home is important in a normal market – but today’s market is far from normal. As a result, an expert real estate advisor isn’t just good to have by your side, they’re essential.

Today’s housing market is full of extremes. Experts project mortgage rates will continue to rise this year, and that’s driving significant demand for homes as buyers want to make their purchases before rates climb even higher. At the same time, an absence of sellers is leading to record-low housing inventory. This imbalance in supply and demand is creating bidding wars and driving home price appreciation as well as considerable gains in home equity.

These market conditions can feel overwhelming, but you don’t have to go at it alone. Having a trusted expert to coach you through the process of buying or selling a home gives you clarity and confidence through each step.

Here are just a few of the ways a real estate expert is invaluable:

Contracts – Agents help with the disclosures and contracts necessary in today’s heavily regulated environment.

Experience – In an unprecedented market, experience is crucial. Real estate professionals know the entire sales process, including how it’s changed over the past two years.

Negotiations – Your real estate advisor acts as a buffer in negotiations with all parties throughout the entire transaction and advocates for your best interests.

Education – Knowledge is power in today’s market, and your advisor will simply and effectively explain market conditions and translate what they mean for you.

Pricing – Finally, a real estate professional understands today’s real estate values when setting the price of your home or helping you make an offer to purchase one.

A real estate agent is a crucial guide through this unprecedented market, but not all agents are created equal. A true expert can carefully walk you through the whole real estate process including conveyancing, understanding property taxes and 1031 exchange rules, look out for your unique needs, and advise you on the best ways to achieve success. Finding an expert real estate advisor – not just any agent – should be your top priority when you’re ready to buy or sell a home.

What’s the key to choosing the right expert?

It starts with trust. You’ll want to know you can trust the advice they’re giving you, so you need to make sure you’re connected with a true professional. No one can provide perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in today’s unique market. But a true professional can give you the best possible advice based on the information and situation at hand. They’ll help you make the necessary adjustments along the way, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions. That’s exactly what you want and deserve.

Bottom Line

It’s critical to have an expert on your side who’s well versed in navigating today’s rapidly changing market. If you’re planning to buy or sell a home this year, let’s connect so you have a real estate professional on your side to give you the best advice and guide you along the way.

Looking for a new home?

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here Anthem, Desert Hills, New River, Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.

Also, check out our mini-series North Valley Spotlight

Key Factors That Impact Affordability in 2022

Key Factors That Impact Affordability Today

Key Factors That Impact Affordability Today | MyKCM

You can’t read an article about residential real estate without the author mentioning the affordability challenges that today’s buyers face. There’s no doubt homes are less affordable today than they were over the last two years, but that doesn’t mean homes are now unaffordable.

There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let’s look closely at each of these components.

1. Home Prices

The most recent Home Price Insights report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.

2. Mortgage Rates

While the current global uncertainty makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to Freddie Mac, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.

3. Wages

The one big, positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:

“Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income.”

The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR data provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here’s a graph of their findings:

Key Factors That Impact Affordability Today | MyKCM

As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it’s important to note that, in most of the country, homes are still affordable.

So, when you think about affordability, remember that the picture includes more than just home prices and mortgage rates. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That’s why it’s less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they’re a big reason that, while less affordable, homes are not unaffordable today.

Bottom Line

To find out more about affordability in our local area, let’s discuss where home prices are locally, what’s happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.

Looking for a new home?

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here Anthem, Desert Hills, New River, Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.

Also, check out our mini-series North Valley Spotlight

Navigate a Market Where Multiple Offers Is the New Normal

How To Navigate a Market Where Multiple Offers Is the New Normal

How To Navigate a Market Where Multiple Offers Is the New Normal | MyKCM

If you’re thinking of buying a home today, you already know that the number of homes available for sale is low. But what does that really mean for you? As a buyer, low housing supply coupled with high buyer demand means you should be prepared to navigate a highly competitive market where homes sell fast and get multiple offers. Realtor.com has this to say:

“Homes also flew off the market at record pace as buyers put offers in the moment properties came up for sale….”

In a bidding war situation like this, doing everything you can to get ahead of the competition is a wise move. That’s because when you find a house and submit an offer, it’ll likely be up against strong offers from other buyers. According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), homes today are receiving an average of 3.9 offers. That’s the most offers we’ve seen in January for the last 5 years (see graph below):

How To Navigate a Market Where Multiple Offers Is the New Normal | MyKCM

To help you navigate bidding wars with multiple offers, an expert real estate advisor is key. They know what’s worked for other buyers, what sellers are looking for, and how to help you prepare when it comes time to make an offer, for example big spaces, many rooms and good parking space which can be marked by residential marking companies, click here to learn more. Here are three tips to keep in mind that will help you make the best offer possible.

1. Know Your Numbers​

Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. Pre-approval shows sellers you’re serious, which can give you a competitive edge. You should also know making an offer at the home’s asking price may not be enough. Homes today often sell for more than their listing price. An agent can help you understand the market value of the home and what other homes are selling for in your area.

2. Be Ready To Move Fast​

Speed and the pace of sales are contributing factors to today’s competitive housing market. When homes are selling fast, it’s important to stay on top of the market and be ready to move quickly. Your agent will help you stay up to date on the latest listings and help you put together your best offer as soon as you find the home you want to buy.​

3. Make a Strong but Fair Offer​

​When you’re up against other offers, putting your best offer forward from the start is key. Lean on your agent to write a strong offer and use their expertise on which levers you can pull to make your offer as enticing as possible. One option is to wave some of your contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Just remember there are certain contingencies you don’t want to give up, like the home inspection.

​Bottom Line

No matter what, your agent is your best resource for making an offer that stands out in a competitive market. Let’s connect to talk through what you can expect as a buyer and how to kick off a successful home search.

Looking for a new home?

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here Anthem, Desert Hills, New River, Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.

Also, check out our mini-series North Valley Spotlight

Terms You Need to Know

Key Terms for Homebuyers [INFOGRAPHIC]

Key Terms for Homebuyers

Some Highlights

  • Knowing key housing terms and how they relate to today’s market is important. For example, when mortgage rates and home prices rise, it impacts how much home you can afford.
  • Terms like appraisal (what lenders rely on to validate a home’s value) and the inspection contingency (which gives buyers essential information on a home’s condition) directly impact the transaction.
  • Buying a home can be intimidating if you’re not familiar with the terms used throughout the process. Let’s connect so you have an expert guide and advice for any questions that may come up.

Looking for a new home?

If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here Anthem, Desert Hills, New River, Phoenix, Mesa, Scottsdale, Tempe, Glendale or Surprise.

Also, check out our mini-series North Valley Spotlight