Beginning with Pre-Approval

If you’re looking to buy a home this fall, there are a few things you need to know. Affordability is tight with today’s mortgage rates and rising home prices. At the same time, there’s a limited number of homes on the market right now, and that’s creating some competition among buyers. But, if you’re strategic, there are ways to navigate these waters. The first thing you’ll want to do is get pre-approved for a mortgage. That way, you’ll know your numbers and can set yourself up for success from the start of your home search.

What Pre-Approval Does for You

To understand why it’s such an important step, you must know what pre-approval is. As part of the homebuying process, a lender looks at your finances to determine what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you know how much money you can borrow. Freddie Mac explains it like this:

“A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.”

Basically, pre-approval gives you critical information about the home-buying process that’ll help you understand how much you can borrow. Why does this help you, especially today? With higher mortgage rates and home prices impacting affordability for many buyers right now, a solid understanding of your numbers is even more important so you can truly wrap your head around your options.

Pre-Approval Helps Show Sellers You’re a Serious Buyer

Let’s face it: more buyers are looking to buy than there are homes available for sale, and that imbalance is creating some competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you make an offer on a home. However, getting pre-approved for a mortgage can help you stand out from other hopeful buyers.

As an article from the Wall Street Journal (WSJ) says:

“If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.”

Pre-approval shows the seller you’re a serious buyer who’s already undergone a credit and financial check, making the sale more likely to move forward without unexpected delays or financial issues.

Bottom Line

Getting pre-approved is an important first step when you’re buying a home. The more prepared you are, the better your chance of getting your desired home. Connect with a trusted lender to have the tools you need to purchase a home in today’s market.

Start The Pre-Approval Process Here!

Why It’s Still a Seller’s Market Today

Is It A Good Time To Sell Your Hillsboro Home?

Even though activity in the housing market has slowed from the frenzy that was the ‘unicorn’ years, it’s still a seller’s market because the supply of homes for sale is so low. But what does that really mean for you? And why are conditions today so good if you want to sell your house?

The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. The number of available homes on the market measures housing inventory. It’s also measured by months’ supply, meaning the number of months it would take to sell all those available homes based on current demand. In a balanced market, there’s usually about a six-month supply. Today, we have only about three months’ supply of homes at the current sales pace (see graph below): 

As the visual shows, given the current inventory of homes, it’s still a seller's market.

Today, we’re nowhere near what’s considered a balanced market. In fact, the current month’s supply is half of what’s typical of a normal market. That means there aren’t enough homes to go around based on today’s buyer demand.

As Lawrence Yun, Chief Economist for NAR, says:

“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”

How Does Being in a Seller’s Market Benefit You?

Sellers, these conditions give you a real edge. Right now, some buyers are ready, willing, and able to purchase a home. And, because there's a shortage of homes up for sale, the ones that hit the market are like magnets for those buyers.

If you work with a local real estate agent to list your house right now, in good condition and at the right price, it could get much attention. You might even end up with multiple offers.

Bottom Line

Today’s seller’s market gives you a big advantage when you sell your house. Because supply is so low, your house will be in the spotlight for motivated buyers who are craving more options. Let’s connect so you understand what’s happening in our local area as you get ready to enter the market.

Why The Median Home Sales Price Is Confusing Right Now

Hillsboro Homes For Sale Median Sale Price

The National Association of Realtors (NAR) is set to release its most recent Existing Home Sales (EHS) report tomorrow. This monthly release provides information on the volume of sales and price trends for previously owned homes. In the upcoming release, it’ll likely say home prices are down. This may seem confusing, especially if you’ve been following along and reading the blogs saying home prices have hit the bottom and since rebounded.

So, why would this 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 one. NAR reports the median home sales price, while other sources use repeat sales prices. Here’s how those approaches differ.

The Center for Real Estate Studies at Wichita State University explains median sales 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 Home Sales Price Today

As the quotes above say, the approaches can tell different stories. That’s why median home sales price data (like EHS) may say prices are down, even though most 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.”

Here’s a simple explanation of the 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. The median value is now five cents if you have two nickels and one dime.

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 sales price to gauge what’s happening with home values may be confusing 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.

That’s why a greater number of ‘less-expensive’ houses are selling right now, causing the median home sales 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 home sales price changes doesn’t mean home prices are falling. What it means is that the mix of homes being sold is impacted by affordability and current mortgage rates.

Bottom Line

Let's connect for a more in-depth understanding of home price trends and reports.

Understanding Home Price Deceleration

 How Much Equity Do I Have In My Home

If you’re a homeowner, you might be torn on whether or not to sell your house right now. Maybe that’s because you don’t want to take on a higher mortgage rate on your next home. If that’s your biggest hurdle, understanding your equity may be exactly what you need to help you feel more comfortable making your move.

How To Calculate Equity In A Home

Equity is the current value of your home minus what you owe on the loan. And recently, that equity has been growing faster than expected.

Over the last few years, home prices have risen dramatically, giving your equity a big boost very quickly. While the market has started to normalize, there’s still an imbalance between the number of homes available for sale and the number of buyers looking to purchase. And it’s because homes are in such high demand that prices are back on the rise today. Rob Barber, CEO of ATTOM, a property data provider, explains:

“Equity levels were high even during the recent downturn, and now they are going back up and better than ever.”

How Equity Benefits You in Today’s Market

With today’s affordability challenges, that equity can be a game changer when you move. Here’s why. Based on data from ATTOM and the Census, nearly two-thirds (68.7%) of homeowners have either paid off their mortgages or have at least 50% equity (see chart below):

That means roughly 70% have a tremendous amount of equity right now.

Once you sell your house, you can use your equity to help with your next purchase. It could be some (if not all) of what you’ll need for your next down payment. It may even be enough to allow you to put a considerably larger down payment on your next home, so you don’t have to finance quite as much. And, if you’ve been in your current house for years, you may have even built up enough equity to pay in all cash. If that’s true for you, you could avoid borrowing altogether, so you wouldn’t have to worry about today’s mortgage rates.

How To Find Out How Much Equity You Have

The best way to learn how much you have is to contact Vance Team Realtors, Your trusted Highland County Realtors, for a Professional Comparable Market Analysis (CMA) to show how much your home might be worth if you listed it today.

Bottom Line

If you plan to move, the equity you’ve gained can make a significant impact. Let's connect to find out how much equity you have in your current home and how you can use it to fuel your next purchase.

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Should I Sell My House Now?

Today's video might help move you toward selling if you are on the fence about selling. 

About 11,000 Houses Will Sell Today Nationwide

Homes For Sale In Hillsboro Ohio

Some Hillsboro homeowners have been waiting months to put their houses on the market because they don’t think people are buying homes right now. If that’s you, know that even though the housing market has slowed compared to the frenzy of a couple of years ago, it isn’t at a standstill. Contrary to your belief, buyers are still active, and plenty of homes are selling now.

According to the National Association of Realtors (NAR), just over 4 million homes will sell this year based on the pace of sales right now. With some simple math, let’s break down what that means for you:

• 4.16 million homes divided by 365 days in a year = 11,397 houses sell each day

• 11,397 divided by 24 hours in a day = 475 houses sell per hour

• 475 divided by 60 minutes in an hour = about 8 houses sell each minute

So, on average, about 11,000 homes sell each day in this country.

As Hillsboro Ohio Real Estate experts, we can give you more information about how many houses are being sold in our area, and the amazing advantages sellers are experiencing right now, due to low housing inventory. Together we will use this knowledge to shape how we market your house based on local trends. 

Bottom Line

If you’ve been waiting to sell because you don’t think there are buyers, know today’s market is active. Every day you wait, around 11,000 other homeowners are selling. In the time it took you to read this, eight homes sold. When you’re ready to sell, too, let’s connect. Are you curious to know how much your home is worth? Try our Free Hillsboro-Home Value Calculator.

There's Only Half the Inventory of a Normal Housing Market Today

Hillsboro Homes For Sale 2023

Wondering if it still makes sense to sell your house right now? The short answer is, yes. Especially if you consider how few homes there are for sale today.

You may have heard inventory is low right now, but you may not fully realize just how low or why that’s a perk when you go to sell your house. This graph from Calculated Risk can help put that into perspective: 

As the graph shows, while housing inventory did grow slightly week-over-week (shown in the blue bar), overall supply is still low (shown in the red bars). Compared to the same week last year, supply is down roughly 10% – and it was already considered low at that time. But, if you look further back, you’ll see inventory is down even more significantly.

To gauge just how far off from normal today’s inventory is, let’s compare right now to 2019 (the last normal year in the market). When you compare the same week this year with the matching week in 2019, supply is about 50% lower. That means there are half the homes for sale now than there’d usually be.

The key takeaway? We’re still nowhere near what’s considered a balanced market. There’s plenty of demand for your house because there just aren’t enough homes to go around. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:

“There are simply not enough homes for sale. The market can easily absorb a doubling of inventory.”

So, if you want to list your house, know that there’s only about half the inventory there’d usually be in a more normal year. That means your house will be in the spotlight if you sell now and you may see multiple offers and a fast home sale. 

Bottom Line

With the number of homes for sale roughly half of what there’d usually be in a more normal year, you can rest assured there’s demand for your house. If you want to sell, let’s connect now so your house can shine above the rest while inventory is so low.