Author Archives: groupwatson

Americans Still View Homeownership as the American Dream

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Everyone’s interpretation of the American Dream is unique and personal. But, for many people, it’s tied to a sense of success, freedom, and prosperity. These are all things that owning a home can help provide.

A recent survey from Bankrate asked respondents which achievements they feel most embody the American Dream. The responses prove owning a home is still important to so many Americans today (see graph below):

As the graph shows, homeownership ranks above other significant milestones, including retirement, having a successful career, and earning a college degree.

A recent report from MYND helps shed light on why so many people value homeownership. It finds:

“. . . nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.”

That’s because, when you own a home, your equity (and net worth) grows over time as you pay down your home loan and as home prices appreciate. This can be a key factor in building intergenerational wealth and long-term financial stability.

To further drive home the difference homeownership can make in your life, a report from Fannie Mae says:

“Most consumers (87%) believe owning a home is important to ‘live the good life.’ . . . Notably, significantly more see ‘having less stress’ as a benefit achieved by owning than renting.”

Especially today, this could be because, when you own a home with a fixed-rate mortgage, you stabilize what’s likely your largest monthly expense (your housing cost), and that helps combat the impact of rising costs from inflation.

What Does This Mean for You?

While it may feel challenging to buy a home today with higher mortgage rates and home prices, if the time is right for you, know that when you buy a home, incredible benefits are waiting for you at the end of your journey.

Bottom Line

Buying a home is a significant and powerful choice, embodying the foundation of the American Dream. If you plan to make your homeownership dream a reality this year, let’s connect to start the process.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

214 Perkins Rd, Krugerville, TX 76227

Where Will You Go If You Sell? Newly Built Homes Might Be the Answer.

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Do you want to sell your house, but hesitate because you’re worried you won’t be able to find your next home in today’s market? You’re not alone, but there’s some good news that may ease your worries. New home construction is up and is becoming an increasingly significant part of the housing inventory.

That means when you go to put your house on the market this summer, considering newly built homes is crucial for expanding the options you’ll have for your next move.

Near-Record Percentage of New Home Inventory

Newly built homes today make up a near-record percentage of the total number of homes available for sale (see graph below):

In fact, as the data shows, newly built homes now make up 31% of the total for-sale inventory. Over the past couple of decades, newly built homes made up an average of only around 13% of total housing inventory from 1983 to 2019.

That means the percentage of the total available homes that are newly built is over two times higher than the norm.

Why This Matters to You

Overall, the supply of homes for sale is still low. And when there’s limited supply, it’s crucial to explore all of your available choices. New-home construction has emerged as a game changer with increasing inventory. Not to mention, recent data shows it’s gaining even more momentum as more newly built homes are underway and will be coming to the market in the months ahead.

Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), highlights the importance of newly built homes for those looking to buy in today’s housing market. Dietz states:

“With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead.”

Don’t overlook this growing market segment and risk missing out on great opportunities to find your ideal home. Since new home construction accounts for roughly 31% of total for sale inventory, you could be cutting nearly one in three options from your search if you don’t consider newly built homes.

If you’re looking to make a move, a local real estate agent can help you sell your current house and explore newly built options in your area. They have the expertise you need to handle both sides of the process so you can move out of your current house and into your brand-new dream home.

Bottom Line

Now’s the time to sell your house and take advantage of the momentum that’s building in new home construction. Let’s connect so you have a guide throughout the selling and buying process. Together, we can make your transition to a newly built home a reality.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

509 Highmoor Court, Oak Point, Texas 75068

Why Homeownership Wins in the Long Run

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Today’s higher mortgage rates, inflationary pressures, and concerns about a potential recession have some people questioning: should I still buy a home this year? While it’s true this year has unique challenges for homebuyers, it’s important to think about the long-term benefits of homeownership when making your decision.

Consider this: if you know people who bought a home 5, 10, or even 30 years ago, you’re probably going to have a hard time finding someone who regrets their decision. Why is that? The reason is tied to how home values grow with time and how, by extension, that grows your own wealth. That may be why, in a recent Fannie Mae survey, 70% of respondents say they believe buying a home is a safe investment.

Here’s a look at how just the home price appreciation piece can really add up over the years.

Home Price Growth over Time

The map below uses data from the Federal Housing Finance Agency (FHFA) to show just how noteworthy price gains have been over the last five years. And, since home prices vary by area, the map is broken out regionally to help convey larger market trends.

If you look at the percent change in home prices, you can see home prices grew on average by just over 56% nationwide over a five-year period.

Some regions are slightly above or below that average, but overall, home prices gained solid ground in a short time. And if you expand that time frame even more, the benefit of homeownership and the drastic gains homeowners made over the years become even clearer (see map below):

The second map shows, nationwide, home prices appreciated by an average of over 290% over a roughly 30-year span.

This nationwide average tells you the typical homeowner who bought a house 30 years ago saw their home almost triple in value over that time. That’s a key factor in why so many homeowners who bought their homes years ago are still happy with their decision.

And while you may have heard talk in late 2022 that home prices would crash, it didn’t happen. Even though home prices have moderated from the record peak we saw during the ‘unicorn’ years, prices are already rebounding in many areas today. That means, in most markets, your home should grow in value over the next year.

The alternative to buying a home is renting, and rental prices have been climbing for decades. So why rent and deal with annual lease hikes for no long-term financial benefit? Instead, consider buying a home.

Bottom Line

If you’re questioning if it still makes sense to buy a home today, remember the incredible long-term benefits of homeownership. If you’re ready to start the conversation, let’s connect today.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

11736 Hamptonbrook Dr, McKinney, TX 75071

What Homebuyers Need To Know About Credit Scores

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If you’re thinking about buying a home, you should know your credit score’s a critical piece of the puzzle when it comes to qualifying for a home loan. Lenders review your credit to assess your ability to make payments on time, to pay back debts, and more. It’s also a factor that helps determine your mortgage rate. An article from Bankrate explains:

 “Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”

This means your credit score may feel even more important to your homebuying plans right now since mortgage rates are a key factor in affordability, especially today. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is 765. But, that doesn’t mean your credit score has to be perfect. An article from Business Insider explains generally how your FICO score range can make an impact:

“. . . you don’t need a perfect credit score to buy a house. . . . Aiming to get your credit score in the ‘Good’ range (670 to 739) would be a great start towards qualifying for a mortgage. But if you’re wanting to qualify for the lowest rates, try to get your score within the ‘Very Good’ range (740 to 799).” 

Working with a trusted lender’s the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you’re able to get. As FICO says:

“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”

If you’re looking for ways to improve your score, Experian highlights some things you may want to focus on:

  • Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.
  • Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.
  • Credit Applications: If you’re looking to buy, don’t apply for other credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.

When you’re ready to start the homebuying process, a lender will be able to assess which range your score falls in and tell you more about the specifics for each loan type.

Bottom Line

With affordability challenges today, prioritizing ways you can have a positive impact on your credit score could help you get a better mortgage rate. If you want to learn more, let’s connect.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

3114 Cody Court, Anna, Texas 75409

Why the Median Home Price Is Meaningless in Today’s Market

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The National Association of Realtors (NAR) will release its latest Existing Home Sales (EHS) report later this week. This monthly report provides information on the sales volume and price trend for previously owned homes. In the upcoming release, it’ll likely say home prices are down. This may feel a bit confusing, especially if you’ve been following along and seeing the blogs saying that home prices have bottomed out and turned a corner.

So, why will this likely say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each report. NAR reports on the median sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.

The Center for Real Estate Studies at Wichita State University explains median prices like this:

“The median sale price measures the ‘middle’ price of homes that sold, meaning that half of the homes sold for a higher price and half sold for less . . . For example, if more lower-priced homes have sold recently, the median sale price would decline (because the “middle” home is now a lower-priced home), even if the value of each individual home is rising.”

Investopedia helps define what a repeat sales approach means:

“Repeat-sales methods calculate changes in home prices based on sales of the same property, thereby avoiding the problem of trying to account for price differences in homes with varying characteristics.”

The Challenge with the Median Sales Price Today

As the quotes above say, the approaches can tell different stories. That’s why median price data (like EHS) may say prices are down, even though the vast majority of the repeat sales reports show prices are appreciating again.

Bill McBride, Author of the Calculated Risk blog, sums the difference up like this:

“Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices.”

To drive this point home, here’s a simple explanation of median value (see visual below). Let’s say you have three coins in your pocket, and you decide to line them up according to their value from low to high. If you have one nickel and two dimes, the median value (the middle one) is 10 cents. If you have two nickels and one dime, the median value is now five cents.

In both cases, a nickel is still worth five cents and a dime is still worth 10 cents. The value of each coin didn’t change.

That’s why using the median home price as a gauge of what’s happening with home values isn’t worthwhile right now. Most buyers look at home prices as a starting point to determine if they match their budgets. But, most people buy homes based on the monthly mortgage payment they can afford, not just the price of the house. When mortgage rates are higher, you may have to buy a less expensive home to keep your monthly housing expense affordable. A greater number of ‘less-expensive’ houses are selling right now for this exact reason, and that’s causing the median price to decline. But that doesn’t mean any single house lost value.

When you see the stories in the media that prices are falling later this week, remember the coins. Just because the median price changes, it doesn’t mean home prices are falling. What it means is the mix of homes being sold is being impacted by affordability and current mortgage rates.

Bottom Line

For a more in-depth understanding of home price trends and reports, let’s connect.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

3101 Boxwood, Plano, Texas 75074

Why Buying or Selling a Home Helps the Economy and Your Community

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If you’re thinking about buying or selling a house, it’s important to know that it doesn’t just affect your life, but also your community.

The National Association of Realtors (NAR) releases a report every year to show how much economic activity is generated by home sales. The chart below illustrates that impact:

As the visual shows, when a house is sold, it can make a big difference in the local economy. The impact comes largely from the workers required to build, update, and buy and sell homes. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), explains how the housing industry adds jobs to a community:

“The economic impact means housing is a significant job creator. In fact, for every single-family home built, enough economic activity is generated to sustain three full-time jobs for a year, per NAHB research. . . . And one job for every $100,000 in remodeling spending.”

Housing being a major job creator makes sense when you consider there are many different industries involved in the process. A recent article from Fortune notes housing activity could have a more robust impact than you think due to the many ways it’s tied to the economy:

“Housing has three direct linkages to economic activity (GDP): the construction of new homes, the remodeling of existing homes, and that of housing transactions. . . . consider the activity associated with home sales – think broker fees, lawyers, etc. – which are a sizable contributor to housing’s GDP footprint.”

When you buy or sell a home, you work with a team of professionals, including contractors, specialists, lawyers, and city officials. Each person plays a role in making the transaction happen.

So, when you make a move in the housing market, you’re not just meeting your own needs, you’re also making a positive impact on the community. Knowing this can give you a sense of empowerment as you make your decision this year.

Bottom Line

Each and every home sale is important for the local economy. If you’re ready to move, let’s connect. It won’t just change your life – it’ll also have a strong positive effect on the whole community.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

214 Perkins Rd, Krugerville, TX 76227

Your Needs Matter More Than Today’s Mortgage Rates

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If you’re thinking about selling your house right now, chances are it’s because something in your life has changed. And, while things like mortgage rates are a key part of your decision on what you’ll buy next, it’s important to not lose sight of the reason you want to make a change in the first place.

It’s true mortgage rates have climbed from the record lows we saw in recent years, and that has an impact on affordability. With rates where they are right now, some homeowners are deciding they’ll wait to sell because they don’t want to move and have a higher mortgage rate on their next home. As Danielle Hale, Chief Economist at Realtor.com, explains:

“. . . homeowners who locked in a 30-year fixed rate in the 2-3% range don’t necessarily want to give that up in exchange for a rate in the 6-7% range.”

But your lifestyle and your changing needs should matter more. Here are a few of the most common reasons people choose to sell today. Any one of these may be more important than keeping your current mortgage rate.

As Ali Wolf, Chief Economist at Zonda, says in a recent tweet:

“First-time and move-up buyers are both active . . . the latter driven by life changes. Divorce, marriage, new higher paid job, and existing home unsuitable all referenced.”

Relocation

Some of the things that can motivate a move to a new area include changing jobs, a desire to be closer to friends and loved ones, wanting to live in a dream location, or just looking for a change in scenery.

For example, if you live in suburbia and just landed your dream job in NYC, you may be thinking about selling your current home and moving to the city for work.

Upgrading

Many homeowners decide to sell to move into a larger home. This is especially common when there’s a need for more room to entertain, a home office or gym, or additional bedrooms to accommodate a growing number of loved ones.

For example, if you’re living in a condo and decide it’s time to seek out a home with more space, or if your household is growing, it may be time to find a home that better fits those needs.

Downsizing

With inflation driving up everyday expenses, homeowners may also decide to sell to reduce maintenance and costs. Or, they may sell because someone’s moved out of the home recently and there’s now more space than needed. It could also be that they’ve recently retired or are ready for a change.

For example, you’ve just kicked off your retirement and you want to move to somewhere you can enjoy the warm weather and have less house to maintain. Your new lifestyle may be better suited for a different home.

Change in Relationship Status

Divorce, separation, or marriage are other common reasons individuals sell to buy different homes.

For example, if you’ve recently separated, it may be difficult to still live under one roof. Selling and downsizing may be better options.

Health Concerns

If a homeowner faces mobility challenges or health issues that require specific living arrangements or modifications, they might sell their current home to find one that works better for them.

For example, you may be looking to sell your home and use the proceeds to help pay for a unit in an assisted-living facility. 

With higher mortgage rates, there are some affordability challenges right now – but your needs and your lifestyle matter too. As a recent article from Bankrate says: 

“Deciding whether it’s the right time to sell your home is a very personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. . . . Your future plans and goals should be a significant part of the equation . . .”

Bottom Line

If you’re ready to sell your house so you can make a move, let’s connect so you have an expert on your side to help you navigate the process and find a home that can deliver on what you’re looking for.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

214 Perkins Rd, Krugerville, TX 76227

This Real Estate Market Is the Strongest of Our Lifetime

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When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point.

1. The Current Mortgage Rate on Existing Mortgages

First, let’s look at the current rate on existing mortgages. According to the Federal Housing Finance Agency (FHFA), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That’s significant. And, to take that one step further, over 50% of mortgages have a rate below 4% (see graph below):

Now, there’s a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgage and stay in their homes. That’s because they can’t go out and buy another house, or even rent an apartment, and pay what they do today. Their current mortgage payment is more affordable. Even if they downsize, with today’s higher mortgage rates, it could cost more.

Here’s why this gives the housing market such a solid foundation today. Having so many homeowners with such low mortgage rates helps us avoid a crisis with a flood of foreclosures coming to market like there was back in 2008.

2. The Amount of Homeowner Equity

Second, Americans are sitting on tremendous equity right now. According to the Census and ATTOM, roughly two-thirds (around 68%) of homeowners have either paid off their mortgage or have at least 50% equity (see chart below):

In the industry, the term for this is equity rich. This is significant because if you think back to 2008, some people had to make the difficult decision to walk away from their homes because they owed more on the home than it was worth.

But this time, things are different because homeowners have built up so much equity over the past few years alone. And, when homeowners have that much equity, it helps us avoid another wave of distressed properties coming onto the market like we saw during the crash. It also creates an extremely strong foundation for today’s housing market.

Bottom Line

We are in one of the most foundationally strong housing markets of our lifetime because homeowners are going to fight to keep their current mortgage rate and they have a tremendous amount of equity. This is yet another reason things are fundamentally different than in 2008.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

11736 Hamptonbrook Dr, McKinney, TX 75071

Real Estate Is Still Considered the Best Long-Term Investment

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With all the headlines circulating about home prices and rising mortgage rates, you may wonder if it still makes sense to invest in homeownership right now. A recent poll from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11th consecutive year, consistently beating other investment types like gold, stocks, and bonds (see graph below):

If you’re thinking about purchasing a home, let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision.

Why Do Americans Still Feel So Positive About the Value of Investing in a Home?

Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes:

“. . . homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”

That’s because owning a home grows your net worth over time as your home appreciates in value and as you pay down your mortgage. And, since building that wealth takes time, it may make sense to start as soon as you can. If you wait to buy and keep renting, you’ll miss out on those monthly housing payments going toward your home equity.

Bottom Line

Buying a home is a powerful decision. So, it’s no wonder so many people view real estate as the best long-term investment. If you’re ready to start on your own journey toward homeownership, let’s connect today.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

The True Value of Homeownership

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Buying and owning your home can make a big difference in your life by bringing you joy and a sense of belonging. And with June being National Homeownership Month, it’s the perfect time to think about all the benefits homeownership provides.

Of course, there are financial reasons to buy a house, but it’s important to consider the non-financial benefits that make a home more than just where you live.

Here are three ways owning your home can give you a sense of accomplishment, happiness, and pride. 

You May Feel Happier and More Fulfilled 

Owning a home is associated with better mental health and well-being. Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), explains:

“Studies have shown the emotional and psychological benefits that homeownership has on a person’s health and self-esteem . . .”

Similarly, Habitat for Humanity says:

“Residential stability among homeowners is related to improved life satisfaction, . . . along with better physical and mental health.”

So, according to the experts, owning a home can improve your psychological wellness by making you feel happier and more accomplished.

You Can Engage in Your Neighborhood and Grow Your Sense of Community

Your home connects you to your community. Homeowners tend to stay in their homes longer than renters, and that can help you feel more connected to your community because you have more time to build meaningful relationships. And, as Acosta says, when people stay in the same area for a longer period of time, it can lead to them being more involved:

“Homeowners also tend to be more active in their local communities . . .”

After all, it makes sense that someone would want to help improve the area they’re going to be living in for a while.

You Can Customize and Improve Your Living Space

Your home is a place that’s all yours. When you own it, unless there are specific homeowner’s association requirements, you’re free to customize it however you see fit. Whether that’s small home improvements or full-on renovations, your house can be exactly what you want and need it to be. As your tastes and lifestyle change, so can your home. As Investopedia tells us:

“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world. You can customize your house, remodel, paint, and decorate without the need to get permission from a landlord.”

Renting can limit your ability to personalize your living space, and even if you do make changes, you may have to undo them before your lease ends. The ability homeownership gives you to customize and improve where you live creates a greater sense of ownership, pride, and connection with your home.

Bottom Line

Owning your home can change your life in a way that gives you greater satisfaction and happiness. Let’s connect today if you’re ready to explore homeownership and all it has to offer.

Contact a GroupWatson Agent TODAY for Professional Advice & Expert Direction.
~Experience the GroupWatson Difference~
Call or Email Today!
972.370.1775|BuyOrSell@GroupWatson.com

1702 Kings Ln, Commerce, TX 75428