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Things To Consider WhenBuying a HomeSUMMER 2023EDITIONJORDAN CULLIVER, RealtorGreen Key Real EstateJackson, MIjordanculliver@greenkeysellsmi.comwww.sellingmichiganhomes.com+1 517 962 8819

Table of Contents3 What’s Happening in the Housing Market? 6 Why Buying a Home May Make More Sense Than Renting8 The 3 Factors Affecting Home Affordability Today11 Ways To Overcome Affordability Challenges in Today’s Housing Market12 Why Today’s Housing Market Is Not About To Crash15 Top Reasons To Own Your Home16 4 Tips for Making Your Best Offer on a Home18 The Power of Pre-Approval 20 Things To Avoid After Applying for a Mortgage21 A Real Estate Expert Gives You Clarity in Today’s Housing Market

You’re probably wondering what recent changes in the housing market mean foryour homebuying plans this summer. Here are the top three things to keep in mind.What’s Happening inthe Housing Market?31. The Supply of Homes for Sale Is Still Low2. Mortgage Rates Are Less Volatile Than Last YearLast year, mortgage rates more than doubled within the calendar year. That’s never happened before, and the rapid rise caused many buyers to put their plans on hold. This year, however, many buyers are reentering the market as rates have settled a bit in roughly the 6% to 7% range.No one knows for sure where rates will go from here, but experts say they may drop some if inflation continues to cool. Any drop boosts your purchasing power by bringing down your expected monthly mortgage payment. Even a change as small as 0.25% can have a big impact on what you’ll pay for your home.The number of homes for sale this year is still low. Housing inventory is measured by the number of available homes on the market. 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 – and today, we only have about half of that. Withinventory that low, buyer competition is ticking back up, meaning multiple offers are returning on agood number of properties. Partnering with a professional can help you be competitive in a market like the one we have today.

Headlines about home prices can be confusing. Home price appreciation has cooled from its peaklast summer.However, prices vary by area. And if you’ve been waiting for prices in your area to come down, you should know the shortage of homes available is going to keep upward pressure on prices. In fact, we’ve seen prices starting to rise again, indicating the worst home price declines are behind us. Andy Walden, VP of Enterprise Research at , says this about home price trends:Bottom Line3. The Worst Home Price Declines Are Behind UsIf you’re ready to buy this summer, don’t let market uncertainty delay your plans. Let’s connect so you have an expert on your side to answer all your housing market questions. Together, we’ll review your goals and what’s happening in our market, so you have the information you need to make a powerful and confident decision. So, if you find the home that’s right for you, waiting for a price drop isn’t the best strategy.Black Knight“Just five months ago, prices were declining on a seasonally adjusted month-over-month basis in 92% of all major U.S. markets. Fast forward to March, and the situation has done a literal 180, with prices now rising in 92% of markets from February.”

If inflation pressures ease and we see a meaningful pullback in mortgage rates, this will ease some of the strain on buyers . . .- Greg McBride, Chief Financial Analyst, Bankrate5

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Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.- Freddie Mac7

The dramatic increase in mortgage rates last year led many buyers to put theirplans on hold. However, affordability is impacted by more than just mortgagerates. To understand affordability, you have to look at three factors.82. Home Prices1. Mortgage RatesOver the past few years, home prices appreciated rapidly as the record-low mortgage rates wesaw during the pandemic led to a surge in buyer demand. The heightened buyer demand happened while the supply of homes for sale was at record lows, and that imbalance put upwardpressure on home prices. And today, we still have more buyers in the market than homes available for sale. But, home price appreciation varies by market. Some areas are seeing slight declines while others have prices that are climbing. As Selma Hepp, Chief Economist at , explains:While mortgage rates are higher than they were a year ago, they’ve hovered primarily between 6% and 7% this year. Within that range, rates have bounced around a lot, but where will they go from here? Mortgage rates are hard to project, but many experts agree they’ll start to come down by the end of the year if inflation continues to cool. No one can know for sure what’ll happen next,so trying to time the market, especially mortgage rates is difficult. This makes it extra important tolean on your team of real estate professionals to stay up to date on what’s happening. CoreLogic“The divergence in home price changes across the U.S. reflects a tale of two housing markets. Declines in the West are due to the tech industry slowdown and a severe lack of affordability after decades of undersupply. The consistent gains in the Southeast and South reflect strong job markets, in-migration patterns and relative affordability due to new home construction.”The 3 Factors Affecting Home Affordability Today

93. Wages Bottom LineAverage Hourly Earnings of All EmployeesIt’s important to know that your ability to afford a home comes down to more than just mortgage rates and home prices. If you’re thinking about buying a home, let’s goover your budget and explore affordable options in our area.The most positive factor in affordability right now is rising income. The graph below uses datafrom the Bureau of Labor Statistics (BLS) to show how wages have grown over time:Higher wages improve affordability because they reduce the percentage of your income it takes to pay your mortgage since you don’t have to put as much of your paycheck toward your monthly housing cost.Dollars per Hour, Seasonally AdjustedSource: BLS

The soaring housing market has finally come back down in much of the U.S., at least for now, while worker pay is growing. That’s produced some benefits for home seekers in the form of slightly better affordability . . . the scenario is becoming more favorable for buyers.- Rob Barber, CEO, ATTOM10

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There’s been some concern lately that the housing market is headed for a crash.The data clearly shows today’s market is very different than it was before the housing crash in 2008. Here’s why.It’s Harder To Get a Loan NowLending Regulations Are Steady12Why Today’s Housing Market Is Not About To CrashHousing Bubble: Now868.7: 99.6Historical Data from the Mortgage Credit Availability Index (MCAI), Each JuneSource: MBAIt was much easier to get a home loan during the lead-up to the 2008 housing crisis than itis today. Back then, banks had different lending standards, making it easy for just aboutanyone to qualify for a home loan or refinance an existing one. As a result, lendinginstitutions took on much greater risk in both the person and the mortgage productsoffered. That led to mass defaults, foreclosures, and failing prices. Things are different today as purchasers face increasingly higher standards from mortgagecompanies. The graph below uses data from the Mortgage Bankers Association (MBA) to showthis difference. The lower the number, the harder it is to get a mortgage. The higher thenumber, the easier it is.

13There Are Far Fewer Homes for Sale TodayUnemployment Recovered Faster This TimeHousing Supply Is Lower Than BeforeLength of Crisis Different Than Last TimeHere’s how the quick job recovery this time helps the housing market. Because so many peopleare employed today, there’s less risk of homeowners facing hardship and defaulting on theirloans. This helps put today’s housing market on stronger footing and reduces the risk of moreforeclosures coming onto the market.There were also too many homes for sale during the housing crisis (many of which were shortsales and foreclosures), and that caused prices to fall dramatically. Today, there’s a shortage ofinventory available overall, primarily due to years of underbuilding homes.The graph below uses data from the National Association of Realtors (NAR) and the Federal Reserve to show how the months’ supply of homes available now compares to the crash. Today, unsold inventory sits at just a 2.9-months’ supply. There just isn’t enough inventory on the market for home prices to come crashing down like they did in 2008.While the pandemic caused unemployment to spike over the last couple of years, the jobless ratehas already recovered back to pre-pandemic levels (see the blue line in the graph below). Thingswere different during the Great Recession as a large number of people stayed unemployed for amuch longer period of time (see the red in the graph below):January 20203.5%Unemployment Rate Was Over 6% for Over 6 YearsJuly 2022 3.5%November 20074.7%November 20164.7%Annual Average of Months’ Supply of Homes for Sale, 1999-PresentTime It Took for Unemployment Rate To Recover to Pre-Crisis PercentageSources: NAR, The FedSource: The Fed

14Bottom LineEquity Levels Are Near Record HighsAmericans Have Record Amounts of EquityIf you’ve been waiting to buy because you’ve been worried today’s housing marketis headed for a crash, the graphs above should ease any fears you may have. Themost current data clearly shows that today’s market isn’t like it was in 2008.That low inventory of homes for sale helped keep upward pressure on home pricesover the course of the pandemic. As a result, homeowners today have near-recordamounts of equity(see graph below):And, that equity puts them in a much stronger position compared to the Great Recession.Molly Boesel, Principal Economist at , explains:CoreLogic“Most homeowners are well positioned to weather a shallow recession. More than a decade of home price increases has given homeowners record amounts of equity, which protects them from foreclosure should they fall behind on their mortgage payments.”Now: $3.1TTotal U.S. Homeowner Equity (in Trillions of Dollars), 2006-2022Source: The Fed

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164 Tips for Making Your Best Offeron a HomeSince there are more buyers in the market than there are homes for sale, the number of homes receiving multiple offers is on the rise. So, when you find the home you want to buy, remember these four tips to make your best offer.2. Know Your Budget1. Lean on a Real Estate ProfessionalThe best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. It helps you be more financially confident, and it shows sellersyou’re serious. That can give you a competitive edge.Understanding your budget is especially important right now. As Sandy Higgins, SeniorWealth Advisor at , puts it:Agents are local market experts. They know what’s worked for other buyers in your areaand what sellers may be looking for in an offer. It may seem simple, but catering towhat a seller needs can help your offer stand out.Capstone Financial Advisors“Understand your current budget … what are your expenses, how’s your spending, would you need to make changes?”

17Bottom Line4. Work with Your AdvisorTo Negotiate3. Think Through EverythingBefore Making an OfferDuring the pandemic, some buyers skipped home inspections in order to submit the winning bid on a home. But skipping the home inspection is a risky move. The inspection is an important part of your purchase. Home inspections help give you a picture of the condition of the home and what repairs it may need. The inspection findings can also be a negotiation tool for you. If it does turn up anything big, you should lean on your agent to help you negotiate with the seller on any potential repairs. Resist the urge to waive the inspection to try and make your offer more appealing to sellers. Today’s market isn’t moving at the record pace it did during the pandemic. That means you may have a bit more time to think before you need to make an offer. While it’s still important to stay on top of the market and be prepared to move quickly, there can be more flexibility today. When you buy a home this summer,let’s work together to make sure youput your best offer forward.

One of the first steps when buying a home is getting pre-approved. To understand why it’s such an important step, you need to understand what pre-approval is and what it does for you.The Power of Pre-Approval18What Is Pre-Approval?How Does It Work?Freddie Mac“. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you shouldonly borrow an amount you are comfortable repaying.”explains it like this:Basically, pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow so you have a stronger grasp of your options.As part of the pre-approval process, a lender looks at your finances to decide what they’d be willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. That can make it easier when you set out to search for homes because you’ll know your overall numbers. And with higher mortgage rates impacting affordability for many buyers today, a solid understanding of your numbers is even more important.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

Bottom LinePre-Approval Helps Show You’rea Serious BuyerPre-approval can help a seller feel moreconfident in your offer because it showsyou’re serious about buying their house.And, with sellers seeing a slight increasein the number of offers, making a strongoffer when you find the perfect houseis key.A recent article from the Wall Street (WSJ) says:Not only can getting preapproved help you zero in on the right price range, but it can giveyou a leg up on other buyers, too.”"If you plan to use a mortgage foryour home purchase, preapproval should be among the first steps in your searchprocess. 19Getting pre-approved is an important first step toward buying a home. It lets you know what you can borrow and shows sellers you’re a serious buyer.

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A real estate expert uses their knowledge of what’s really happening with home prices, housing supply, expert projections, and more to guide you throughout the homebuying process.A Real Estate Expert Gives You Clarity in Today’s Housing Market21Why You Want To Lean on a Trusted ProfessionalJay Thompson, Real Estate Industry Consultant, explains:Unfortunately, when information in the media isn’t clear, it can generate a lot of fearand uncertainty in the market. As Jason Lewris, Co-Founder and Chief Data Officer atParcl, says:“In the absence of trustworthy, up-to-date information, real estate decisionsare increasingly being driven by fear, uncertainty, and doubt.”“Housing market headlines are everywhere. Many are quite sensational, endingwith exclamation points or predicting impending doom for the industry. .”Clickbait, the sensationalizing of headlines and content, has been an issue since thedawn of the internet, and housing news is not immune to it

22Bottom LineFor expert advice and the latesthousing market insights, let’s connect.But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You can lean on an expert to help you separate fact from fiction and get the answers you need.The right agent can help youunderstand what’s happening atthe national and local levels, andthey can debunk the headlines usingdata you can trust. Experts have in-depth knowledge of the industry andcan provide context, so you knowhow current trends compare to thenormal ebbs and flows in theindustry, historical data, and more.Then, to make sure you have the fullpicture, an agent can tell you if yourlocal area is following the nationaltrend or if they’re seeing somethingdifferent in your market. Together, you can use all that information to make the bestpossible decision.After all, making a move is apotentially life-changing milestone. Itshould be something you feel readyfor and excited about. And that’swhere a trusted guide comes in.

“Buying a home can be a complicated, intimidating process, so you’ll need a professionalon your side to answer questions and look out for your best interests.”- The Mortgage Reports23

Let’s Chat.SUMMER 2023 EDITIONI’m sure you have questions and thoughts about thereal estate process.I’d love to talk with you about what you’ve read here and help youon the path to buying your new home. My contact information is below, and I look forward to working with you.JORDAN CULLIVER, RealtorGreen Key Real EstateJackson, MIjordanculliver@greenkeysellsmi.comwww.sellingmichiganhomes.com+1 517 962 8819