Preferred Properties of Texas

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What You Need To Know For A Real Estate Recession

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You’re probably aware that the economy is in poor shape. The inflation rate is at its highest level in 40 years, the interest rates have doubled from early this year, while real estate prices are literally on the rise.

The United States’ economy naturally expands and contracts. Expandions are usually a sign that the economy is in good health and last for several years. A recession is a period when the economy contracts by more than two quarters consecutively. This means that we must slow down, hopefully only a little. That is a recession. It usually lasts less then a year.

Because it was fun, we printed and spent way too much money. Inflation kicked in and the Federal Reserve is trying slow down things a bit.

We don’t know whether we are currently in recession, but the housing market is experiencing a reset right now.

  • Interest rates have risen
  • Monthly mortgage payments up
  • Less buyers and renters are eligible, so housing prices will fall. However, there is still a shortage of homes to rent or for sale.

Consumers should recognize that interest rates will remain in the 6%-8% range for at least the next few years. This is a more common range. To stimulate the economy, the super low rates that we witnessed during COVID-19 were sub-sidised.

Second, determine the length of your occupancy. If you plan to move within four years, rent now and buy now if your plans are to remain there for at least four.

Buyers should marry the house but not date the rate. Refinance as soon as rates fall below current levels. We will soon see another round of stimulus and the Fed will lower rates. Your home will be worth much more in the future than it is now. Take a look at ARMs. Make sure your pre-approval letter matches your offer.

Sellers, adjust your expectations to the current market conditions. There are no longer any 10 over-priced offers for the first weekend. Buyers who are still interested in buying a home are extremely price-sensitive. Consider pricing your home realistically. You might consider upfront payment for an appraisal. A prepaid 2-1 rate buydown can help you attract buyers.

The bottom line is that the US housing market is starting to cool down. It has been so hot for so long that most sellers aren’t ready to accept less than their full value in most markets. We aren’t seeing realistic asking prices discounted and don’t expect to soon.

It is still a buyers market and there is a severe shortage of homes for sale.

There are no reasons for home prices to fall or interest rates to drop in the next six to twelve months. We  don’t believe we will see another housing crash as in 2008. Forget about foreclosures anytime this year.

Original Blog: https://www.fox5atlanta.com/news/what-buyers-and-sellers-need-to-know-for-a-real-estate-recession

Buyers Feel Pinch of Rising Interest Rates

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Although homeownership is the largest investment and source of wealth for most households in the United States, there are many factors that make it more difficult to achieve homeownership, particularly for first-time buyers. Rising mortgage interest rates are the latest factor. The average rate for a 30-year fixed mortgage rose 2 percentage points from 3.22 percent in the first half to 5.7 percent in the second half of 2022.

Potential buyers face many consequences from rising interest rates. They reduce buyers’ purchasing power. The mortgage payment increases with rising mortgage rates, which in turn leads to a decrease in buyers’ purchasing power. This means that it is more difficult for them to get a mortgage loan. The mortgage rate rises means that the income required to be eligible for a mortgage loan for the same home is higher. This effectively pushes out more buyers from the housing market. With a 3 percent rate of interest, 34.8 percent Texas renters could afford the first-quartile price for a home in 2Q2022. With a 6. percent interest rate, this percentage drops to 24.7 per cent.

A higher interest rate equals a higher mortgage payment. This increases the buyer’s debt to income (DTI). This makes buyers more risky to lenders and could reduce the chances of getting a mortgage loan. A higher DTI ratio can make it more difficult to repay mortgages, especially for those who have lost their job.

Higher interest rates mean higher mortgage payments. This reduces the return on homeownership and prolongs the time it takes to break even.

 

To read more click on original article: https://www.recenter.tamu.edu/articles/tierra-grande/Home-Stretch-2362

There Are Many Ways To Move.

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You don’t have to rent a truck or hire movers when you move. You have other options for moving your belongings.

A moving truck may not be necessary for you. You might be able share a truck with another customer of a moving company if you don’t move a lot of items. This option is available for interstate moves.

FedEx states that freight is any shipment exceeding 150 pounds. You can send bulk items by air, sea, land or any combination thereof. It may be economical depending on your move.

A company can drop off a portable storage container at your home. You fill it up with your belongings. It is picked up by the company and shipped to your new residence. Ask if portable storage containers can be placed on the street or property of your future and current homes.

Not all your possessions are treasures. Consider whether it is worth the effort and cost to move an item. If the item isn’t worth it, you can sell, trade, or dispose of it and then buy another one once you get to your destination. It’s easier and cheaper to move with less.

 

Original Blog: https://www.texasrealestate.com/members/posts/theres-more-than-one-way-to-move/

Can You Purchase a Home with a Home Equity Loan?

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A home equity loan can be used to purchase a house. However, it is not always the best decision. With caveats, home equity can be used to purchase a second or investment property.

A home equity loan allows you to access the equity in your home by taking out a second mortgage. Home equity is the difference between your home’s value and what you owe.

There are two things you should know if you want to use your equity from your home to purchase another property. Is this a purchase of a second house or an investment?

A home equity loan is a great option if you are looking to purchase an investment property.

You can contribute more to your down payment. You can put more towards your down payment with a home equity loan. You will be more competitive in the current market and your monthly payments and interest rates will be lower.

A second property can be more difficult to finance due to the higher down payment requirements. A home equity loan is a better option and can be more affordable.

Home equity loans are secured by collateral which is your home. You will enjoy lower interest rates as a result.

Your home equity could be an asset in wealth building if you are looking to buy an investment property. You should consider the fact that a second house will not bring you income as an investment. This means you will be borrowing money to buy your second home.

There are downsides to using equity to purchase investment properties. You are effectively trading an asset for debt. You are taking the portion of your home you own and then putting it in a loan.

Housing market shifts can make you vulnerable, especially if you have two properties. If something happens in the housing markets, you’re at double your risk. If your property’s value falls, for example, you could owe more on both your home equity loan or your mortgage.

You could lose both your properties if you default on your loan.

It is possible to end up with three mortgages and only two homes. You will need to combine the home equity loan with the loan for your second house.

A downside to consider is that the interest on your home equity loan won’t be tax-deductible due to 2018 tax code changes.

This is the big takeaway: Yes, you can use your home equity to purchase a second home. Sometimes it’s a good option. However, it comes with risks. It’s not always the best decision. You need to carefully consider your particular situation.

 

Original Post: https://realtytimes.com/archives/item/1043687-can-you-use-home-equity-to-buy-another-property?rtmpage=

Becoming a Homeowner

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Being a homeowner involves more than just having keys and your name on a deed. It’s possible to feel a surge of emotions when you get your keys and realize that you have a place in the world.

While you may be proud of your car or your clothes, nothing can compare to being a homeowner. It is a great accomplishment to buy your first home. Every day you can look back on that achievement.

After you move into your new home, have unpacked and taken a deep breath, you will experience that moment when you feel like “This is my home.” This moment can be repeated often. It will happen when you look at your countertops, realizing that you have the ability to change them as you wish. You don’t need to ask permission to have a dog. You can also paint your walls any color you like.

You may soon be able to tile your backsplash and snake a toilet. These tasks can be outsourced, as well as all other jobs you might need over time, but it is often more rewarding and cost-effective to do the work yourself.

You’ll need to learn how to maintain your lawn if you have a tight budget after purchasing your first home.

When you put money and sweat equity into your home, you’re impacting its value. It’s an investment not only in your home but also in you and your future.

If you’ve been considering buying a home contact Preferred Properties of Texas, our agents would to help! 

For listings in Stephenville, Tx text HOMES to 877-965-7775

 

Original Blog:  https://realtytimes.com/archives/item/1035879-6-things-that-happen-when-you-become-a-homeowner?rtmpage=

Happy Labor Day!

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Buying or Selling a home in Stephenville, Erath County or surrounding area, give Preferred Properties of Texas a call! 

Let us take the LABOR out of selling or buying your next home!

Preferred Properties of Texas

(254) 965-7775|Contact Preferred Properties of Texas