The Top Benefits of Buying a Multi-Generational Home

Has the idea of sharing a home with loved ones like your grandparents, parents, or other relatives crossed your mind? If so, you’re not alone. More buyers are choosing to go this route and buy a multi-generational home. Here’s a look at some of the top reasons why, to see if a home like this may be right for you too.

Why Buyers Are Opting for Multi-Generational Living

According to the National Association of Realtors (NAR), two of the top reasons buyers are opting for multi-generational homes today have to do with affordability (see graph below):

First-time buyers are focused most on cost savings – with 28% saying this was a key reason for them. By pooling their resources with others, they can share financial responsibilities like mortgage payments, utilities, and more to make homeownership more affordable. This is especially helpful for those first-time homebuyers who may be finding it tough to afford a home on their own in today’s market.

Buyers are also turning to multi-generational homes so they can more easily afford their dream home. Both first-time (28%) and repeat buyers (18%) chose to live with others so they could buy a larger home. When everyone chips in and combines their incomes, that big dream home with more space could be more within reach.

But multi-generational living isn’t just about the financial side of things. According to the same study from NAR, 23% of repeat buyers chose to buy a multi-generational home to make it easier to care for an aging parent. Many older adults want to age in place and a multi-generational home can help make that possible. For those older adults, it gives them an opportunity to maintain their quality of life while being surrounded by their loved ones. As Axios explains:

“Financial concerns and caregiving needs are two of the major reasons people live with their parents (and parents’ parents).”

Lean on an Expert

Finding the perfect multi-generational home isn’t as simple as shopping for a regular house. That’s because there are more people with even more opinions and needs to be considered. It’s like solving a puzzle, and the pieces need to fit just right.

So if you’re interested in the many benefits multi-generational living offers, partner with a local real estate agent who has the expertise to help.

Bottom Line

Whether your motives are financial or focused on the people you’ll share your home with, buying a multi-generational home may make sense for you. If you’re interested in learning more, connect with a local real estate agent.

For the original article, visit Keeping Current Matters.

Why It’s More Affordable To Buy a Home This Year

Some Highlights

• Home affordability depends on three factors: mortgage rates, home prices, and wages.

• Mortgage rates are down from their recent peak, home prices are expected to rise at a slower pace, and wages are increasing faster than usual.

• That’s good news if you want to buy a home because it means affordability is getting better.

For the original article visit Keeping Current Matters.

Homeownership Is Still at the Heart of the American Dream

Buying a home is a powerful decision, and it remains at the heart of the American Dream. Unlike renting, owning a home means more than just having a place to live – it offers a sense of belonging, stability, and freedom. According to Nicole Bachaud, Senior Economist at Zillow:

“The American Dream is still owning a home. There’s a lot of pent-up demand for ownership; that isn’t going to go away.”

Let’s explore just a few of the reasons why so many Americans continue to value homeownership. 

The Financial Benefits of Owning a Home

One possible reason homeownership is viewed so highly is because owning a home is a significant wealth-building tool. That may be why Jessica Lautz, Deputy Chief and VP of Research at the National Association of Realtors (NAR), says:

“Homeownership is the number one way to build wealth in America.”

Over time, owning a home not only helps boost your own net worth, but it also sets future generations up for success as you pass that wealth down. Habitat for Humanity explains:

“Overall, homeownership promotes wealth building by acting as a forced savings mechanism and through home value appreciation. Homeowners make monthly payments that increase their equity in their homes by paying down the principal balance of their mortgage. . . . In addition, owning a home promotes intergenerational homeownership and wealth building. Children of homeowners transition to homeownership earlier — lengthening the period over which they can accumulate wealth . . .”

It can also provide meaningful financial stability compared to renting. When you buy with a fixed-rate mortgage, you can lock in your monthly housing payments for the length of your home loan.

The Non-Financial Benefits of Homeownership

But, owning a home offers more than just financial benefits—it benefits you socially and emotionally too. Your home provides feelings of achievement, responsibility, and more. In a recent survey, Fannie Mae outlines just a few of these more emotionally-driven benefits, including:

“The top three were having control over what you do with your living space (94%) to having a sense of privacy and security (91%) and having a good place for your family or to raise your children (90%) . . .”

What Does That Mean for You?

If your idea of the American Dream involves greater freedom, security, and prosperity, homeownership could be a key player in bringing that dream to life. And with mortgage rates now on a downward trend, it might be a good time for you to consider making a move.

If you’re ready and able to buy, know that there are incredible benefits waiting at the end of your journey. You’ll gain more than just a home – it’s a place to grow your wealth and call your very own. Like Ksenia Potapov, Economist at First American says:

“…homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.”

Bottom Line

Buying a home is a powerful decision and the cornerstone of the American Dream. If finding a place to call your own is part of your dream for this year, connect with a local real estate advisor to start the process today.

For the original article, visit Keeping Current Matters.

Congratulations, You Bought a Home—Here’s What You Need To Do Now

Q:What should first-time homeowners know as they settle into their homes?

Congratulations, you bought a home! You overcame a myriad of homebuying obstacles to achieve the American dream. You also fixed your monthly housing payments and will hopefully be building equity for years to come.

Now that you’re a homeowner, what comes next?

You might be itching to take down a non-load-bearing wall and start redecorating. However, there are a few more practical (i.e., way less fun) things to add to your to-do list first.

Below are six steps new homeowners should take before they break out the sledgehammer.

1. Say hello to your neighbors

You might need more than to borrow a cup of sugar from your neighbors. These folks are an invaluable source of local knowledge. They’re likely aware of any problems and quirks in your shared building/complex/block, can assist in a pinch, and know which homes have children around the same age as yours.

They are also an excellent source of recommendations. Need a plumber or a roofer? They might have great field-tested suggestions of whom to call—and whom to avoid. Plus, it’s nice to get that invitation to the backyard barbecue or summer soiree.

Takeaway: Wave hello, and introduce yourself the next time you see your neighbors.

2. Brush up on local regulations

Before you paint the exterior of your home a new color, add a new bathroom, or even have that annoying overgrown tree taken down, you should be aware of local regulations. These can be the rules of your building or complex, homeowners association, town or city, county, or a combination of the above. Historic designations might also restrict how new homeowners can alter their properties.

Those who decide to risk it—asking for forgiveness rather than permission—could be hit with stop-work orders, hefty fines, and the prospect of having to rip out all of those improvements when it comes time to put the home on the market. If not sooner.

And keep in mind, local regulations are truly local: They can vary dramatically across the same city. Even minor offenses, such as putting out the trash on the wrong day, can lead to fines.

Takeaway: Brushing up on your HOA covenants, conditions, and restrictions, or CC&Rs, or searching Google for what’s permitted could save you money and big headaches.

3. Buy the ‘boring’ necessities

If you’re moving from an apartment to a house in the suburbs where it snows every winter, you’re probably going to need a shovel. A rake and a lawn mower might also come in handy. A tool kit wouldn’t be a bad idea either.

Granted, it’s not as fun to shop for, say, ladders, as statement chairs and smart TVs. You’re probably not going to put together aspirational Pinterest boards or ask your design-savvy friends for their opinions on them either. But that boring ladder might come in handy if you need to clean out the gutters or trim some tree branches.

Takeaway: It’s better to be prepared than the alternative. Trust me on this.

4. Be realistic about your abilities

It’s one thing to attempt fixing a clogged drain on your own. It’s quite another to attempt to rewire your home after watching a few how-to TikTok or YouTube videos.

Sure, if you’re successful you could save some money. But if you’re not, and you make the problem even worse, it could cost you a whole lot more than if you’d just called in the professionals from the start.

So instead of tackling a big DIY project in your first few weeks of homeownership, start with something small. You can always work your way up to larger projects over time.

Takeaway: Start your homeownership journey as more of a realist than an optimist.

5. Build your roster of professionals

As a new homeowner, you will quickly learn that problems are going to arise—issues that you could never have imagined. Even if this isn’t your first home, you’ll see that every property is unique with its own set of challenges. Fortunately, there is a professional out there for just about all of those troubles. You just need to identify them.

Consider asking for recommendations for a handyperson, an electrician, a plumber, a roofer, an HVAC technician, an exterminator, and whoever else you might need. Some folks I know use a snowplow service to clear their driveways in the winter, others do it themselves. The same goes for landscapers and gutter cleaners.

It’s much better to have put together a roster of professionals you can call in a pinch than to wait for an emergency to strike. You don’t want to frantically be Googling plumbers after a pipe explodes. You also probably won’t care so much about how many stars customers awarded them or their reputation for quality and value in those moments.

Takeaway: Put together your team of pros well before disaster strikes.

6. Set aside money every month for maintenance and repairs

Things are going to go wrong. And when they do, you’re likely going to receive a bill with higher numbers than you’d prefer. Even if your property passed your home inspection with flying colors, appliances are going to die a sudden death, boilers will need to be serviced, and the roof will eventually need to be replaced.

That’s why experts recommend homeowners put aside 1% to 4% of the value of their home every year to cover maintenance and repairs. You might want to consider putting down even more. You might not have many issues in your first few years of homeownership, especially if you purchase new construction, but inevitably something big and expensive will go bust.

Takeaway: Take however much you thought home maintenance and repairs would cost, and then double that number. If you live in an expensive area, triple it.

For the original article By Clare Trapasso visit Realtor.com.

What Is Rightsizing, and Is It Different from Downsizing?

A look at the potential benefits and challenges of rightsizing, plus how it differs from downsizing.

You’re probably familiar with the terms “starter home” and “dream home.” The first is typically a small, affordable home you start with before you grow into a larger home. Eventually, most homeowners downsize, buying a smaller home for later stages in life. But have you heard of rightsizing?

“Rightsizing a home does not define increasing or decreasing the size of your home. You are adjusting your home size to better fit your needs,” says Jessica Duncan, a realtor with Better Homes and Gardens Real Estate Main Street Properties. 

Like the name implies, rightsizing is all about finding a home that makes sense for you at a given point in time. “Sometimes, this means you need a larger home or even a home with about the same square footage but a layout that better fits your current lifestyle and needs,” Duncan adds. 

In this guide, experts weigh in on how to choose a home while rightsizing. 

What Is Rightsizing?

When it comes to rightsizing, the definition is all in the name. It’s about finding a home that is the correct size for your situation.

“Rightsizing is a process of thoughtful discernment, and you can’t start too soon,” says Edward Sattler of the Better Homes & Gardens Real Estate Green Team. “Downsizing is just numbers, big to small, and you might not get what you’d hoped for.” 

Unlike downsizing, rightsizing isn’t necessarily about going smaller or less expensive. Agent Michael Yehuda of Coldwell Banker Warburg says downsizing is just a form of rightsizing.  “Downsizing is a specific form of rightsizing that emphasizes a reduction in physical space and possessions, often driven by simplification and financial considerations,” he says. “Rightsizing, on the other hand, is a more comprehensive and flexible approach that involves adjusting living conditions to optimize for various aspects of life, including work, health, and family dynamics.”

You’re not losing anything, not giving anything up, when you rightsize. You gain. Rightsize is more. Rightsize is better living. You’ll know when it feels right in your gut.

— EDWARD SATTLER

You might have heard the term simple-sizing being used interchangeably with rightsizing. “Instead of moving to a new home and getting rid of furniture or items that no longer fit in your space, simple-sizing is the idea that you make intentional choices at home to create an easier-to-manage, more contented lifestyle,” says Opendoor Real Estate Broker, Jennifer Patchen. 

Fun Sizing Is a Playful, Passion-Driven Alternative to Downsizing

When Is It Time to Rightsize?

The perfect time to rightsize your home is when you feel your living situation needs to catch up with your lifestyle. “If you are contemplating the decision to rightsize your living space, consider the lifestyle you want and how your new home can facilitate those dreams,” Duncan says. 

A 2023 survey by Opendoor shows many Americans are now prioritizing a way of life that leads to simpler living, with less clutter and square footage.

“According to Opendoor’s 2023 survey on simple-sizing, health concerns (57%) became the biggest factor driving their decision to simple-size, which can be especially important for seniors and retirees,” Patchen says. 

The benefits of rightsizing can be huge. While it doesn’t always mean saving money, it can mean more freedom. “Rightsizing your home can have a huge emotional impact on your well-being,” Duncan says. “It can reduce stress, free up more time, or even provide a space for everything to create less clutter in your life—all three of these effects can improve your psychological well-being.”

Rightsizing for Retirees

For many, rightsizing comes at the same stage in life as downsizing. Individuals reach a point in later life when they no longer need as much room as they did to raise a family or work from home, for instance. 

“Rightsizing for retirees can have many benefits, including lower payments, less maintenance expenses, or just providing a home that fits their current lifestyle,” Duncan says. “Their life has changed in many ways. The kids have moved out of the house, and the need for as many bedrooms may have left with the kids.” 

Rightsizing isn’t just about the need for less space. It can also be about a home that requires less attention. “Many retirees dream of traveling more often,” Duncan adds. “Rightsizing to a condo or community that includes yard maintenance, exterior maintenance, and more security over your home while traveling” is attractive.

What Is Aging in Place, and Is It an Option in Your Current Home?

What to Look for in a Home

As you prepare to look for a home better sized for your needs, consider not just square footage but a range of wishlist items like you might in any home search. 

“Think about the location you want to be in, the time you want to spend on maintenance, and your need to achieve these dreams,” Duncan says.

The best advice I would give to someone looking to rightsize their home is to think about the life you want, not the life you have right now. Dream about what the day-to-day would be like and how the new home can facilitate these dreams.

— JESSICA DUNCAN

You might decide you want a smaller home within walking distance of shops and restaurants, or maybe your new retirement means you have time to maintain a larger yard or garden. 

Sattler suggests considering how a different home might use some of your assets. “How do you want to allocate resources: your time, your money, your emotional and physical and spiritual energies?” he says. 

“Consider the benefits of a quieter life: For many buyers, simplifying means moving away from the density of big cities. According to Opendoor’s 2022 Hottest ZIP Codes report, one-third of people across the U.S. said they would relocate for a lifestyle change, whether to be closer to outdoor and recreational activities or to join a close-knit community,” Patchen says. 

Similarly, purchasing a smaller home near certain amenities can be an excellent way to rightsize. Patchen says 62% of Americans say they spend more time outside on their property or near various parks following the pandemic. 

For the original article By Kristine Gill, visit Better Homes and Gardens.

• Jessica Duncan is a realtor with Better Homes and Gardens Real Estate Main Street Properties. 

• Edward Sattler is a real estate agent with the Better Homes & Gardens Real Estate Green Team.

• Michael Yehuda is a sales associate with Coldwell Banker Warburg.

• Jennifer Patchen is a real estate broker with Opendoor.

Avoid These Common Mistakes After Applying for a Mortgage

If you’re getting ready to buy a home, it’s exciting to jump a few steps ahead and think about moving in and making it your own. But before you get too far down the emotional path, there are some key things to keep in mind after you apply for your mortgage and before you close. Here’s a list of things to remember when you apply for your home loan.

Don’t Deposit Large Sums of Cash

Lenders need to source your money, and cash isn’t easily traceable. Before you deposit any cash into your accounts, discuss the proper way to document your transactions with your loan officer.

Don’t Make Any Large Purchases

It’s not just home-related purchases that could disqualify you from your loan. Any large purchases can be red flags for lenders. People with new debt have higher debt-to-income ratios (how much debt you have compared to your monthly income). Since higher ratios make for riskier loans, borrowers may no longer qualify for their mortgage. Resist the temptation to make any large purchases, even for furniture or appliances.

Don’t Cosign Loans for Anyone

When you cosign for a loan, you’re making yourself accountable for that loan’s success and repayment. With that obligation comes higher debt-to-income ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count them against you.

Don’t Switch Bank Accounts

Lenders need to source and track your assets. That task is much easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.

Don’t Apply for New Credit

It doesn’t matter whether it’s a new credit card or a new car. When your credit report is run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), it will have an impact on your FICO® score. Lower credit scores can determine your interest rate and possibly even your eligibility for approval.

Don’t Close Any Accounts

Many buyers believe having less available credit makes them less risky and more likely to be approved. This isn’t true. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those parts of your score.

Do Discuss Changes with Your Lender

Be upfront about any changes that occur or you’re expecting to occur when talking with your lender. Blips in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. Ultimately, it’s best to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

Bottom Line

You want your home purchase to go as smoothly as possible. Remember, before you make any large purchases, move your money around, or make major life changes, be sure to consult your lender – someone who’s qualified to explain how your financial decisions may impact your home loan.

For the original article, visit Keeping Current Matters.

What Lower Mortgage Rates Mean for Your Purchasing Power

If you want to buy a home, it’s important to know how mortgage rates impact what you can afford and how much you’ll pay each month. Fortunately, rates for 30-year fixed mortgages have come down significantly since the end of October and are currently under 7%, according to Freddie Mac (see graph below):

 This recent trend is great news for buyers. As a recent article from Bankrate says:

“The rate cool-off somewhat eases the housing affordability squeeze.”

And according to Edward Seiler, AVP of Housing Economics and Executive Director of the Research Institute for Housing America at the Mortgage Bankers Association (MBA):

“MBA expects that affordability conditions will continue to improve as mortgage rates decline . . .”

Here’s a bit more context on how this could help with your plans to buy a home.

How Mortgage Rates Affect Your Search for a Home

Understanding the connection between mortgage rates and your monthly home payment is crucial for your plans to become a homeowner. The chart below illustrates how your ability to afford a home changes when mortgage rates shift. Imagine your budget allows for a monthly payment between $2,400 and $2,500. The green part in the chart shows payments in that range or lower (see chart below):

 As you can see, even small changes in rates can affect your budget and the loan amount you can afford.

Get Help from Reliable Experts To Understand Your Budget and Plan Ahead

When you’re looking to buy a home, it’s important to get guidance from a local real estate agent and a trusted lender. They can help you explore different mortgage options, understand what makes mortgage rates go up or down, and how those changes impact you.

By looking at the numbers and the latest data together, then adjusting your strategy based on today’s rates, you’ll be better prepared and ready to buy a home.

Bottom Line

If you’re looking to buy a home, you should know the recent downward trend in mortgage rates is good news for your move. Team up with a trusted real estate agent and lender to plan your next steps. 

For the original article, visit Keeping Current Matters

Get Ready To Buy a Home by Improving Your Credit Score

As the new year approaches, the idea of buying a home might be on your mind. It’s an exciting goal to set, and it’s never too early to start laying the groundwork. One crucial step to prepare for homeownership is building a solid credit score.

Lenders review your credit to assess your ability to make payments on time, pay back debts, and more. It’s also a factor that helps determine your mortgage rate. An article from CNBC explains:

“When it comes to mortgages, a higher credit score can save you thousands of dollars in the long run. This is because your credit score directly impacts your mortgage rate, which determines the amount of interest you’ll pay over the life of the loan.”

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 770. 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 is the best way to get more information on how your credit score could factor into your home loan and the mortgage rate. 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 something, don’t apply for additional credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.

A lender will help you navigate the process from start to finish, from assessing which range your score falls in to telling you more about the specifics for each loan type.

Bottom Line

As you set your sights on buying a home in the upcoming year, a focus on boosting your credit score could help you get a better mortgage rate when the time comes. If you want to learn more, connect with a trusted lender.

For the original article visit Keeping Current Matters.

Instant Reaction: Mortgage Rates, December 28, 2023

Mortgage interest rates continued their decline this week and have hit the lowest level in six months since May of 2023. Mortgage interest rates are now at an average of 6.61%, easing from 6.67% last week. The typical monthly mortgage payment for a $400,000 home is now at $2,046. While NAR's Pending Home Sales shows flat data from October to November, the recent week's rate decline should motivate buyers who had been priced out of the market.

There are many signs of encouragement heading into 2024 in the housing market, such as more housing inventory from home builders, lower mortgage interest rates, and demographics. This year, even the youngest baby boomer (born between 1946 and 1964) turned 60 years of age. Baby boomers are the largest share of home buyers and may be looking for their retirement property. Last year, half of older boomers paid all cash for their homes and are less concerned with mortgage interest rates. Additionally, millennials (the largest adult generation) may be looking for their first property or a move-up family home.  Housing demand is apparent. With added inventory and better mortgage interest rates, 2024 looks like a better year.

Jessica Lautz

Dr. Jessica Lautz is the Deputy Chief Economist and Vice President of Research at the National Association of REALTORS®.

For the original article, visit National Association of Realtors.

Thinking About Buying a Home? Ask Yourself These Questions

If you’re thinking of buying a home this year, you’re probably paying closer attention than normal to the housing market. And you’re getting your information from a variety of channels: the news, social media, your real estate agent, conversations with friends and loved ones, the list goes on and on. Most likely, home prices and mortgage rates are coming up a lot.

Here are the top two questions you need to ask yourself as you make your decision, including the data that helps cut through the noise.

1. Where Do I Think Home Prices Are Heading?

One reliable place you can turn to for information on home price forecasts is the Home Price Expectations Survey from Fannie Mae – a survey of over one hundred economists, real estate experts, and investment and market strategists.

According to the most recent release, the experts are projecting home prices will continue to rise at least through 2028 (see the graph below):

So, why does this matter to you? While the percent of appreciation may not be as high as it was in recent years, what’s important to focus on is that this survey says we’ll see prices rise, not fall, for at least the next 5 years.

And home prices rising, even at a more moderate pace, is good news not just for the market, but for you too. It means, by buying now, your home will likely grow in value, and you should gain home equity in the years ahead. But, if you wait, based on these forecasts, the home will only cost you more later on. 

2. Where Do I Think Mortgage Rates Are Heading?

Over the past year, mortgage rates spiked up in response to economic uncertainty, inflation, and more. But there’s an encouraging sign for the market and mortgage rates. Inflation is moderating, and here’s why this is such a big deal if you’re looking to buy a home.

When inflation cools, mortgage rates generally fall in response. That’s exactly what we’ve seen in recent weeks. And, now that the Federal Reserve has signaled they’re pausing their Federal Funds Rate increases and may even cut rates in 2024, experts are even more confident we’ll see mortgage rates come down.

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

“. . . mortgage rates will continue to ease in 2024 as inflation improves and Fed rate cuts get closer. . . . a key factor in starting to provide affordability relief to homebuyers.”

As an article from the National Association of Realtors (NAR) says:

“Mortgage rates likely have peaked and are now falling from their recent high of nearly 8%. . . . This likely will improve housing affordability and entice more home buyers to return to the market . . .”

No one can say with absolute certainty where mortgage rates will go from here. But the recent decline and the latest decision from the Federal Reserve to stop their rate increases, signals there’s hope on the horizon. While we may see some volatility here and there, affordability should improve as rates continue to ease.  

Bottom Line

If you’re thinking about buying a home, you need to know what’s expected with home prices and mortgage rates. While no one can say for certain where they’ll go, making sure you have the latest information can help you make an informed decision. Connect with a trusted local real estate agent so you can stay up to date on what’s happening and why this is such good news for you.

For the original article, visit Keeping Current Matters.