3 Key Factors Affecting Home Affordability

by Elsa Soto | Feb 21, 2024 | Blog, Buyers, Homeowners, Homes, Villas and Condos, Long Term Rental, Mortgages, News, Real Estate News, Renters, Sellers

3 Key Factors Affecting Home Affordability

To gain a comprehensive understanding of home affordability, it’s crucial to consider the interaction of three key elements: mortgage rates, home prices, and wages. Let’s delve into the latest insights on each factor to grasp why affordability is experiencing improvements.

1. Mortgage Rates

In recent months, mortgage rates have observed a decline, with further decreases anticipated throughout the year, according to insights from Jiayi Xu, an economist at Realtor.com. Xu emphasizes the expectation of a downward trend in mortgage rates, contingent upon sustained progress in addressing inflation. Even minor fluctuations in mortgage rates can significantly impact your purchasing power, facilitating easier access to the home you desire by reducing your monthly mortgage obligations.

2. Home Prices

The trajectory of home prices constitutes the second critical factor. Following a period of steady growth last year, home prices are projected to continue rising at a moderate pace in 2024. Despite an anticipated increase in inventory this year, the supply of homes remains insufficient to meet the demand from prospective buyers. Lisa Sturtevant, Chief Economist at Bright MLS, underscores that the anticipated rise in inventory is likely to be counterbalanced by heightened buyer activity, resulting in modest growth in median home prices across the U.S. This forecast is advantageous for prospective buyers as it signifies a tempered increase in prices compared to the surges witnessed during the pandemic. However, waiting might incur higher costs as more buyers enter the market and prices escalate further. Therefore, seizing the opportunity to purchase a home before market conditions intensify could be advantageous if you’re prepared and find the right property.

3. Wages

A positive aspect contributing to affordability is the upward trend in income levels.

Increased wages contribute to enhanced affordability by decreasing the proportion of your earnings required to cover your mortgage payments. This occurs as you are not compelled to allocate as large a portion of your salary towards your monthly housing expenses.

What does this mean for you?

The affordability of purchasing a home is intricately linked to three pivotal factors: mortgage interest rates, property prices, and income levels. Currently, there’s promising news as these factors are moving in a favorable direction for potential buyers. Lower mortgage interest rates make borrowing more affordable, while stable or decreasing property prices can offer opportunities for more manageable purchases. Additionally, rising income levels empower individuals to comfortably meet mortgage obligations.

In essence, for those considering the leap into homeownership, it’s imperative to grasp that the fundamental drivers of affordability are aligning positively. Staying attuned to the latest updates and trends regarding mortgage rates, property prices, and income levels is paramount in making informed decisions. Let’s ensure we stay connected to navigate these dynamics together and capitalize on favorable conditions in the housing market.

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Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

2 Impacts of Mortgage Rates

by Elsa Soto | Feb 14, 2024 | Blog, Buyers, Homeowners, Homes, Villas and Condos, Long Term Rental, Mortgages, News, Real Estate News, Sellers

2 Impacts of Mortgage Rates

If you’re in the market to purchase a home, you’ve likely been closely monitoring mortgage rates. Over the past few years, they experienced record lows, underwent significant increases, and are now showing signs of decreasing once again. But what’s behind these fluctuations?

Understanding the factors influencing mortgage rates can be complex due to the multitude of variables at play. Here are some of the key factors that have a significant impact: Inflation and Federal Reserve Policy

While the Federal Reserve (Fed) doesn’t directly control mortgage rates, its decisions regarding the Federal Funds Rate can indirectly influence them. The Fed adjusts the Federal Funds Rate in response to various economic indicators such as inflation, employment rates, and overall economic performance. This adjustment, in turn, affects investor expectations and market dynamics, consequently influencing mortgage rates. As explained by Business Insider:

“The Federal Reserve addresses inflation concerns by raising the federal funds rate, which can indirectly affect mortgage rates. High inflation levels and the anticipation of further Fed rate hikes can push mortgage rates upward. Conversely, if investors anticipate rate cuts by the Fed and inflation shows signs of slowing down, mortgage rates generally trend downward.”

In recent years, the Fed raised the Federal Funds Rate to combat inflation, resulting in corresponding increases in mortgage rates. However, there is optimism among experts that inflation and mortgage rates will see favorable trends in the coming months. Danielle Hale, Chief Economist at Realtor.com, predicts:

“[M]ortgage rates will continue to ease in 2024 as inflation improves . . .”

Furthermore, there is speculation that the Fed may consider reducing the Federal Funds Rate this year due to signs of cooling inflation, even though it hasn’t yet reached the ideal target set by policymakers.

In essence, while the interplay between inflation, Federal Reserve policies, and mortgage rates is intricate, understanding these dynamics can provide valuable insights for individuals navigating the housing market and seeking to capitalize on favorable borrowing conditions.

Considered a premier destination for living, Orlando entices with its sun-drenched climate, thriving tourism and tech sectors, and vibrant cultural tapestry. Renowned for iconic attractions like Walt Disney World, the city promises endless entertainment and leisure pursuits. Boasting esteemed educational institutions and a blend of urban conveniences and natural beauty, Orlando remains remarkably affordable compared to its metropolitan counterparts. Its family-centric vibe, sports culture, and ongoing infrastructure enhancements add to its allure. Whether seeking career prospects, recreational delights, or a cost-effective lifestyle, Orlando presents an irresistible choice for many. For your real estate needs in Orlando, Florida, look no further than Remax Heritage for assistance with buying, selling, or renting residential, vacation, or retirement properties.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

REAL ESTATE NEWS! What You Need to Know About Saving For a Home in 2024

by Elsa Soto | Jan 24, 2024 | Blog, Buyers, Homeowners, Homes, Villas and Condos, News, Real Estate News, Renters, Sellers

REAL ESTATE NEWS! What You Need to Know About Saving For a Home in 2024

If you’re in the process of planning to buy a home, understanding budgeting and saving might seem daunting, but it doesn’t have to be. To alleviate concerns, it’s crucial to grasp some of the upfront costs, and for that, relying on trusted real estate professionals is essential. They can assist in crafting a plan and conducting a strategic assessment of your budget and process before you initiate the home-buying journey.

Consider the following aspects, as recommended by experts:

1. Down Payment:

While saving for your down payment is a primary consideration when buying a home, the notion that a 20% down payment is universally required is a myth. Your specific situation and home-buying goals determine the right amount. Collaborate with trustworthy real estate professionals to explore various loan types and down payment assistance programs, gaining clarity on each requirement and optimizing your approach.

2. Closing Costs:

Budgeting for closing costs is equally vital, encompassing fees and payments distributed among the parties involved in the transaction. Closing costs typically range from 2 to 5 percent of the mortgage amount. Consulting with a reliable lender will provide insights into the specific costs you need to prepare for at the closing table.

3. Earnest Money Deposit (EMD): For added security, consider saving for an earnest money deposit (EMD), a demonstration of good faith when making an offer on a house. This deposit, usually 1% to 2% of the total home price, is not an extra expense but a portion of your upfront costs. It showcases your commitment to the seller, and if the offer is accepted, the EMD funds contribute to the down payment and closing costs.

Remember, an EMD is not obligatory, and its presence doesn’t guarantee offer acceptance. Collaborate with a real estate advisor to determine what aligns with your situation and any local requirements. They will guide you in making informed decisions throughout the buying process.

In conclusion, being well-informed about the expenses you need to anticipate is crucial when purchasing a home. Partner with a local real estate advisor to benefit from their expertise and receive guidance at every stage of the buying journey.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

Orlando Ranks 3rd in US for Largest Increase in Homes Sold

by Elsa Soto | Jan 17, 2024 | Blog, Buyers, Homeowners, Homes, Villas and Condos, Local Events, News, Press Releases, Real Estate News, Renters, Sellers

Orlando Ranks 3rd in US for Largest Increase in Homes Sold

I had the pleasure of appearing on FOX 35’s Good Day Orlando program earlier this week to discuss the recent RE/MAX Housing report that showed Orlando ranking 3rd in the nation for the largest increase in homes sold.

Preparing to discuss the report I pulled together some of the latest market information reflecting on 2023 and peering into the future and what is going to happen in 2024. With a population surge, affordability challenges, and shifting inventory dynamics, the Orlando market continues to be a captivating arena for buyers and sellers.

The Pulse of 2023 – A Rollercoaster Ride Population Surge and Affordability Challenge: 2023 witnessed the lowest number of home sales across the nation since 1993, emphasizing the critical role affordability plays in shaping market dynamics. Fueled by the pandemic Florida’s population soared by 1.9%, in 2022 reaching 22,244,823 making it the fastest-growing state in the nation.

Pent-up Demand Unleashed: So why the surge? Buyers and sellers alike experienced a release of pent-up demand, driven by factors such as job changes, household formation, marriages, and births. The anticipation for interest rates to drop further added to the momentum in the real estate market.

Inventory Fluctuations: Inventory saw a slow but steady increase over the past eight months. While November 2021 had less than a month’s supply, the current 4-month supply marks a shift towards a more balanced market that many consider to be between 5 and 6 months. Closed sales, down 17% from October, align with the normal seasonal trends and actually mirrored the same level as 2022 despite higher interest rates.

The Interest Rate Conundrum Affordability Challenges and Interest Rates: Affordability emerges as a significant challenge, accentuated by October rates reaching their highest in over 22 years at 7.8%. However, the market is already witnessing a shift, with mortgages dropping to the low 6’s and even the 5’s for some loan programs. This shift signifies a potential game-changer for the Orlando market.

Price Dynamics: While prices experienced a slight dip from October to November, the median home price surged by just over 4% in the last 12 months. The advice echoes – don’t wait. Anticipate rate cuts, act when you find the right house, and capitalize on potential refinancing opportunities as rates decrease.

The Road Ahead – Time to Buy Advice for Buyers: The resounding advice is to act now. Expect rate cuts to bring an influx of buyers, intensifying competition. The mantra becomes clear – “Marry the house and Date the Rate.” Secure the right property and be ready to capitalize on favorable refinancing when rates decrease.

As we step into 2024, the forecast is for a busy year with increasing activity as the months unfold. In the realm of real estate, there’s never a bad time to own a home, but remember, every market is unique and working with experienced professionals who understand the local market, like those at RE/MAX Heritage becomes paramount for success in navigating the ever-evolving Orlando real estate landscape.

Explore your ultimate destination for all things related to the property market by clicking the image above the text, and delve deeper into valuable insights and information.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

REAL ESTATE NEWS! Avoiding common mistakes after submitting your mortgage application

by Elsa Soto | Jan 10, 2024 | Blog, Buyers, Homeowners, Homes, Villas and Condos, Local Events, News, Real Estate News, Renters, Sellers

REAL ESTATE NEWS! Avoiding common mistakes after submitting your mortgage application

As you embark on the exciting journey of buying a home, it’s natural to envision the future and the joy of making it your own. However, before you get too carried away with emotions, it’s crucial to keep certain key considerations in mind after applying for your mortgage and before reaching the closing stage. Here’s a comprehensive list of things to bear in mind during the home loan application process:

1. Avoid Depositing Large Sums of Cash

Lenders require traceable sources for your money, and cash transactions can be challenging to trace. Before depositing any cash into your accounts, consult your loan officer to understand the proper documentation process.

2. Refrain from Making Large Purchases:

Beyond home-related expenses, any significant purchases can raise red flags for lenders. New debts result in higher debt-to-income ratios, impacting loan eligibility. Resist the urge to make substantial purchases, even for furniture or appliances.

3. Avoid Cosigning Loans:

Cosigning makes you accountable for the success and repayment of a loan, contributing to higher debt-to-income ratios. Even if you’re not responsible for payments, lenders will consider them in your evaluation.

4. Maintain Consistency in Bank Accounts:

Lenders prefer consistency in sourcing and tracking your assets. Before transferring funds, communicate with your loan officer to ensure a smooth process.

5. Refrain from Applying for New Credit:

Whether it’s a credit card or a car loan, new credit applications impact your FICO® score. Lower credit scores can influence your interest rate and loan approval. Avoid applying for new credit during this critical period.

6. Avoid Closing Any Accounts:

Some believe reducing available credit lowers risk, but this isn’t accurate. Your credit score considers the length and depth of your credit history and your total credit usage. Closing accounts negatively affects both aspects.

7. Discuss Changes with Your Lender:

Transparency is key. Inform your lender of any changes or anticipated changes, whether in income, assets, or credit. Share recent alterations in job or employment status to ensure your home loan approval remains unaffected.

In conclusion, for a seamless home purchase experience, consult your lender before making substantial financial decisions. Whether it’s large purchases, fund transfers, or significant life changes, your lender can guide you through the process, ensuring your home loan remains on track.

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.

REAL ESTATE NEWS! Explore Additional Resources for Your Down Payment

by Elsa Soto | Jan 3, 2024 | Blog, Buyers, Homeowners, Homes, Villas and Condos, News, Real Estate News, Renters, Sellers

REAL ESTATE NEWS! Explore Additional Resources for Your Down Payment

Discover various down payment assistance programs that are helping today’s buyers turn their homeownership dreams into reality:

1. Teacher Next Door:

Tailored for teachers, first responders, health providers, government employees, active-duty military personnel, and veterans, this program is designed to assist in reaching down payment goals.

2. Fannie Mae:

Fannie Mae offers down-payment assistance to eligible first-time homebuyers residing in majority-Latino communities, providing support for their homeownership journey.

3. Freddie Mac:

With options specifically crafted for homebuyers with modest credit scores and limited funds for a down payment, Freddie Mac aims to make homeownership more accessible.

4. 3By30 Program:

The 3By30 program outlines actionable strategies to add 3 million new Black homeowners by 2030. These initiatives provide valuable resources, facilitating potential buyers in securing down payments.

5. Down Payment Resource for Native Americans:

Tailored for Native Americans, Down Payment Resource highlights 42 U.S. homebuyer assistance programs across 14 states. These programs ease the path to homeownership by offering support with down payments and associated costs.

Even if you don’t qualify for these specific programs, there are numerous federal, state, and local options to explore. A real estate professional can guide you in finding the resources that align with your needs as you navigate the available opportunities.

In conclusion, achieving your dream of homeownership may be more attainable than you realize, especially when you tap into the right support. Connect with a real estate professional to learn more about the available resources tailored to your journey. Explore additional resources by clicking anywhere in the text to assist you with your down payment!

Ready to make a Move?

Bardell Real Estate are the experts in helping you with your selling, buying or renting needs near Orlando, Florida. Make your Disney area experience a forever memorable one. Call us now to speak to a real estate agent.