SELECT YOUR BUDGET RANGE: With a history dating back to the 1600s, Concord boasts a diverse architectural landscape, showcasing various historical home styles that have endured over the centuries. You’ll find charming 1800s Colonials alongside modern builds among the homes available for sale. However, they all share one common trait: a substantial price tag. In 2022, the median cost of a single-family home in Concord exceeded $1.4 million.
PLAN YOUR COMMUTE: While Concord is approximately 20 miles away from downtown Boston, the commuter rail system simplifies commuting to and from the city. If your destination is Boston, you can reach North Station in just 50 minutes via the Fitchburg line. Alternatively, you can drive to and from the city, with travel times typically ranging from 45 minutes to an hour, depending on traffic conditions.
EMBRACE THE ATMOSPHERE: If you’re seeking a quintessential New England town that strikes a perfect balance between charm and vibrancy, Concord is the ideal destination. The town features a walkable downtown area, extensive wooded trails for hiking (with exceptional foliage viewing in the fall), and a wealth of historical sites and entertainment options to keep you engaged for days. Your weekends here will be filled with leisurely strolls through Brewster’s Woods Wildlife Sanctuary and captivating performances at the 51 Walden Performing Arts Center.
EXPLORE THE CULTURAL HERITAGE: Concord’s historical significance extends beyond its Revolutionary War roots; it is also deeply intertwined with literary history. Home to Walden Pond, the Ralph Waldo Emerson House (still owned by the renowned author’s family), and the Orchard House, where Louisa May Alcott penned “Little Women,” Concord is a haven for literary enthusiasts.
EVALUATE THE EDUCATIONAL OPPORTUNITIES: A town that has nurtured numerous great authors naturally boasts an outstanding public school system. Concord-Carlisle High School, which also serves students from neighboring towns, consistently ranks high in our list of top schools due to its exceptional test scores and favorable student-teacher ratio. Additionally, the abundance of sports teams ensures that your child will have ample extracurricular activities to keep them engaged after school hours.
After graduating from Wentworth Institute of Technology and renting a series of apartments, Tyler Provost decided it was time to invest in a single-family home not only to live in, but also to serve as an investment property that he could fix up and ultimately sell.
But with the high price of housing in Greater Boston, he was advised to do so with a partner. So, in 2015, Provost teamed up with his college roommate. They pooled their funds and purchased a seven-bedroom home in Jamaica Plain for $680,000, putting down 3.5 percent and financing the balance with a Federal Housing Administrationmortgage. The house, built in 1900, was split into two units, so the new owners lived in the side with four bedrooms and rented out the other, a three-bedroom unit. Then they started fixing up the property with an eye toward selling at a profit.
“We decided to pool funds because we both were handy and had a bit of experience with construction and home renovations,” said Provost, now 34 and a general contractor and managing partner of Accelerated Pools in Westford. “Plus, our funds, when pooled together, fetched more value than they would have independently.”
Although Provost admitted to being “terribly unprepared and very green,” the investment was a success: He and his roommate sold the property in 2021 for $1,300,000.
Driven by the high cost of housing in Greater Boston — the median sales price for a single-family home increased 8.3 percent in July to a new record of $910,000, according to the Greater Boston Association of Realtors — as well as the tax advantages of homeownership and the opportunity to build wealth, friends and roommates are increasingly opting to combine their resources and purchase homes together. In large cities like Boston, many people already are sharing their place with a roommate, so taking the next step and co-buying, or purchasing a home together, is widely accepted.
“If you’re going it alone, you can probably come up with a 3 or 3½ percent down payment, but if you each have 5 percent, it puts you in a better bargaining position,” said Mike Sokolowski, a broker with The Agency in Boston.
Reaching retirement marks a significant milestone in one’s life, ushering in a wave of change and newfound opportunities. As you embark on this exciting new chapter, you might be contemplating the idea of selling your current residence in favor of a more suitable home that aligns with your evolving requirements.
Fortunately, you may be better positioned to make this move than you might think. Here are a few compelling reasons why.
Consider the Duration of Your Homeownership Between 1985 and 2009, the average length of time that homeowners remained in their homes hovered around six years. However, according to the National Association of Realtors (NAR), this figure has increased in recent years. Since 2010, the typical tenure of homeowners in their residences has extended to slightly over nine years.
This implies that a significant number of homeowners have resided in their homes for longer periods in recent times. When you inhabit a residence for such an extended duration, it is only natural for your life circumstances to undergo changes while you are in that dwelling. As these life changes and milestones occur, your housing needs may also evolve. Should your current abode no longer align with these evolving needs, there may well be superior housing alternatives awaiting your consideration.
If you have been a homeowner for more than a few years, it is highly likely that you have accrued substantial equity that can serve as the financial catalyst for your next move. This equity accumulates as you gradually repay your mortgage and as property values appreciate over time.
Are you in the market for a new home but feeling constrained by rising mortgage rates and soaring property prices? Well, there’s some encouraging news on the horizon, according to Ali Wolf, Chief Economist at Zonda. She anticipates a surge in the availability of smaller, more budget-friendly homes over the next 12 to 24 months.
In many ways, the era of smaller homes has already dawned. When the pandemic struck, our concept of home evolved. People began to view their residences not just as living spaces but as multifunctional hubs for work, schooling, exercise, and more. Those fortunate enough to have ample space opted to hold onto it, while others sought to sell their compact homes in pursuit of larger ones. Consequently, the homes entering the market during the pandemic tended to be smaller compared to pre-pandemic listings, and this trend persists today.
As illustrated in the graph below, home size on the market also experiences seasonal fluctuations. Typically, larger homes surface during the summer months when families with school-age children are more inclined to move.
Taking this seasonality into account, along with the impending arrival of fall, we can anticipate an influx of smaller, more affordable homes hitting the market in the coming months.
This is particularly good news because, as Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), points out, the demand for smaller homes has increased in response to rising interest rates in 2022 and deteriorating housing affordability.
So, what does all of this mean for you?
The combination of the seasonal pattern of smaller homes appearing later in the year and builders introducing smaller, budget-friendly newly constructed homes at present is certainly a positive development, especially if you’ve been grappling with the challenge of affording a home. Mikaela Arroyo, Director of the New Home Trends Institute at John Burns Real Estate Consulting, offers her perspective on this potential surge in smaller home availability:
“While it may not fully resolve the affordability crisis, it does open doors for individuals to access entry-level homes in their desired areas.”
Gen Z is enthusiastically aiming to establish their own roots and attain financial autonomy. Consequently, they are increasingly turning towards the prospect of homeownership. The latest report on Home Buyers and Sellers Generational Trends by the National Association of Realtors (NAR) reveals that a significant 30% of Gen Z buyers have transitioned directly from residing with their parents to owning their personal homes.
For those belonging to this generation and nurturing aspirations of homeownership, here’s a compilation of valuable insights regarding the reasons behind their desires and the locations where they are choosing to invest.
Motivations Driving Gen Z’s Aspiration for Homeownership A recent survey conducted by Rocket Mortgage highlights some of the principal drivers motivating Gen Z buyers to make the leap into homeownership:
“Among the respondents, 34% cited their primary motivation for purchasing a home as starting or expanding their family. . . . With the expansion of a family comes the establishment of a secure abode.” Another significant factor identified by the survey is Gen Z’s quest for stability (20.8%). Homeownership presents the opportunity to stabilize what is typically the most substantial monthly expenditure: housing costs.
With a fixed-rate mortgage for your home, you can secure a consistent monthly payment throughout your loan’s term, often spanning 15 to 30 years. In contrast, remaining a renter denies you this benefit, leaving you exposed to escalating housing expenses.
Hence, if you’re prepared to embark on a fresh life chapter or seek enhanced stability, it’s reassuring to know that your peers share the same sentiments, and these motivations underpin their turn towards homeownership.
Gen Z’s Next Destination: Where They’re Making Moves If these factors inspire you to contemplate homeownership, it’s worth exploring where your fellow Gen Z members are locating their dwellings, as this could offer valuable guidance for your search. According to a recent survey by LendingTree, Gen Z buyers are directing their attention towards more budget-friendly areas in order to amplify their purchasing potential and counteract the challenges posed by current mortgage rates.
Although many Gen Z buyers still desire the convenience and vibrancy of urban living, they also appreciate the affordability, open spaces, and natural surroundings that suburban areas provide. Jacob Channel, Senior Economist at LendingTree, explains:
“… they express a desire to reside in urban environments while also maintaining proximity to nature.” Identifying a residence that harmoniously combines these elements necessitates expertise. Collaborating with a dependable real estate professional can aid you in locating a home within your financial scope and desired locality. Your agent will possess insights into the most economically viable neighborhoods for your search. Furthermore, they can accentuate the amenities and attributes of a particular location, aligning them with your objectives. Additionally, they can guide you on leveraging factors such as remote work to widen your search horizon.
In Conclusion If you’re a member of Gen Z embarking on the exciting journey of homeownership, or if you’re seeking more information about the process, I encourage you to reach out. This way, you can have a knowledgeable companion to assist you in discovering a home that not only complements your lifestyle but also aligns with your financial means.
Amidst the forthcoming release of the latest Existing Home Sales (EHS) report by the National Association of Realtors (NAR), there exists a perplexing situation surrounding the median home sales price. This scenario can be a head-scratcher, especially if you’ve been diligently tracking the discourse and absorbing insights that suggest housing prices have reached their lowest point and have now embarked on an upward trajectory.
So, why is it that this report might depict a decrease in home prices, while numerous other market analyses assert that prices are on the ascent? The answer lies in the divergent methodologies employed by different sources. NAR’s approach entails presenting the median home sales price, whereas other entities resort to the repeat sales prices for their calculations. Let’s delve into the nuances of these approaches.
The Center for Real Estate Studies at Wichita State University provides a succinct description of median sales prices:
“The median sale price represents the middle value of homes that have been sold, signifying that half of the homes were sold at a higher price and half at a lower price… For instance, if there has been a recent surge in the sale of lower-priced homes, the median sale price would decrease (owing to the ‘middle’ home now being a lower-priced one), even if the individual value of each home is on an upward trajectory.”
Investopedia offers an explanation of the repeat sales approach:
“Repeat-sales methods ascertain fluctuations in home prices by analyzing sales of the same property, sidestepping the challenge of accommodating price variations in homes with distinct attributes.”
The Predicament with Today’s Median Home Sales Price
As the aforementioned quotes indicate, these differing approaches yield distinct narratives. Consequently, the data regarding median home sales prices (like the EHS data) might indicate a dip in prices, even though the majority of reports based on repeat sales affirm that prices are once again appreciating.
Bill McBride, the Author of the Calculated Risk blog, encapsulates this contrast concisely:
“Median prices are susceptible to distortion due to the mix, and repeat sales indices like Case-Shiller and FHFA likely provide a more accurate means of gauging prices.”
To elucidate this distinction, let’s offer a simplified analogy of median value (refer to the accompanying visual). Imagine having three coins in your pocket, and you decide to arrange them in ascending order of value. If the coins consist of one nickel and two dimes, the median value (the middle one) would be 10 cents. If the configuration comprises two nickels and one dime, the median value would now be five cents.
In both scenarios, the worth of a nickel remains five cents, and a dime’s value remains 10 cents. The intrinsic value of each coin remains constant.
This explains why employing the median home sales price as an indicator of shifts in home values might be perplexing at present. Most potential buyers utilize home prices as a starting point to evaluate if they align with their financial constraints. However, the majority of individuals procure homes based on the monthly mortgage payment they can comfortably manage, not solely on the property’s sticker price. When mortgage rates ascend, prospective buyers might need to consider a more affordable home to maintain a manageable monthly housing expenditure.
As a result, a higher proportion of “budget-friendly” houses are currently being sold, thereby influencing a decline in the median home sales price. Nevertheless, this does not indicate that any specific property has lost value.
When media outlets echo reports of price reductions in the coming week, keep the coin analogy in mind. Alterations in the median home sales price do not inherently imply that home prices are plummeting. Instead, this shift signifies that the composition of homes being sold is being influenced by factors such as affordability and prevailing mortgage rates.
To distill the essence, the key to comprehending intricate trends and analyses in home pricing lies in deeper exploration. If you’re keen on delving into the intricacies of this subject, let’s initiate a connection for a more thorough discussion.
Buying a new construction home can be an exciting experience. From being the very first owner, to customizing your home’s features, there are a lot of benefits. But navigating the complexities of buying a home that’s under construction can also be a bit overwhelming. This is where a skilled real estate agent can make all the difference. An article from The Mortgage Reports sums (https://themortgagereports.com/91925/guide-to-buying-a-new-construction-home) it up like this: “Your Realtor or real estate agent will be key to helping you navigate this process. . . . they can guide you through construction and help anticipate and solve for any possible snags along the way.” Here’s how your agent is an invaluable resource in your search to find and buy your new home. Agents Know the Local Area and Market Your agent is well-versed in the emerging communities and upcoming developments that could influence your decision. For example, you’ll want to be aware if there were any plans to construct a highway through the woods behind your prospective backyard. It’s important to consider how the neighborhood and the surrounding area might evolve before making your home purchase. Your agent can help you find a community that perfectly aligns with your preferences, lifestyle, and future needs. Knowledge of Construction Quality and Builder Reputation An agent also has the expertise to evaluate the construction quality and reputation (https://www.nahb.org/other/consumer-resources/how-to-choose-a-home-builder) of different builders. Their knowledge and experiences with local builders allow them to offer insights into each one’s track record, customer satisfaction, and construction practices. This information can help you avoid any potential risks and help you confidently select a builder known for delivering quality homes. Assistance with Customization and Upgrades The most obvious benefit of opting for new home construction is the opportunity to customize your home to suit your preferences. Your agent will guide you through that process and share advice on the upgrades that are most likely to add long-term value to your home. Their expertise ensures you focus your budget on areas that will give you the greatest return on your investment later on. Understanding Builder Contracts and Negotiations Builder contracts (https://www.realtor.com/advice/buy/steps-to-buy-a-new-construction-home/) can be complex and differ from traditional home purchase agreements. Your agent can help you navigate these contracts to make sure you fully understand the terms and conditions. T hey’re also skilled negotiators who can advocate on your behalf, potentially securing better deals, upgrades, or incentives for you throughout the process.
Bottom Line
The guidance and expertise of a local real estate agent can make all the difference in turning your vision of the perfect home into a reality. Let’s connect so you can feel confident about purchasing your new construction home.
Unveiling the Importance of a Realtor When Acquiring Your New Construction Home
Embarking on the journey of purchasing a new construction home is a thrilling endeavor. From relishing the distinction of being its inaugural owner to tailoring the features to your liking, the advantages are numerous. Yet, delving into the intricacies of procuring a home that’s still in the building stages can also be a daunting task. This is where the expertise of a proficient real estate agent steps in, making a world of difference.
The insight is succinctly encapsulated in an article by The Mortgage Reports:
“Your Realtor or real estate agent will be key to helping you navigate this process. . . . they can guide you through construction and help anticipate and solve for any possible snags along the way.”
Here’s how your agent becomes an indispensable asset in your quest for discovering and acquiring your new abode.
Adeptness in Local Area and Market Knowledge Your agent boasts a thorough familiarity with burgeoning neighborhoods and imminent developments that could wield influence on your decision. Imagine being aware if there were intentions to carve a highway through the woodland that stretches behind your potential backyard. It’s imperative to factor in the potential evolution of the locality and its environs before committing to your home investment. Your agent can aid you in finding a community that impeccably aligns with your tastes, lifestyle, and future requirements.
Mastery of Construction Quality and Builder Reputation Assessing the construction quality and reputation of various builders requires a discerning eye, and your agent possesses just that. Their acumen and encounters with local builders empower them to furnish insights into each one’s track record, client contentment, and construction practices. Armed with this information, you can steer clear of potential pitfalls and confidently opt for a builder renowned for crafting superior residences.
Guidance in Customization and Enhancements The most evident advantage of choosing new home construction lies in the prospect of personalizing your living space according to your preferences. Your agent will shepherd you through this process, dispensing wisdom regarding enhancements that are likely to confer enduring value to your home. Their expertise ensures you channel your budget towards areas that promise the highest returns on investment down the line.
Proficiency in Dealing with Builder Contracts and Negotiations Builder contracts often sport complexities distinct from conventional home purchase agreements. Your agent’s role includes shepherding you through these contracts, ensuring your grasp of the stipulations. Furthermore, they’re adept negotiators, capable of advocating on your behalf. This could translate into favorable deals, enhancements, or incentives procured during the course of the process.
The Bottom Line The sagacity and proficiency of a local real estate agent wield the power to transform your vision of the ideal home into a concrete reality. Let’s establish a connection, enabling you to proceed with assurance as you embark on acquiring your new construction residence.
Many individuals are currently in the process of relocating. If you’re contemplating a move yourself, you’re likely aware of the inventory scarcity and affordability issues prevailing in the housing market. You might be pondering how to counterbalance these challenges. An illuminating report from Gravy Analytics sheds light on the regions where people are seeking homes and the factors they prioritize most at present. This insight could aid in devising your own moving strategy.
Migration towards Cities with Lower Housing Expenses Affordability is a major driving force influencing the choice of destination for homebuyers, which comes as no surprise. People are shifting to locales that offer more economical housing alternatives. Consequently, smaller cities are experiencing a surge in popularity. According to Hannah Jones, an Economics Data Analyst at Realtor.com, the rationale behind this is clear:
“The focus on affordability remains strong . . . a substantial portion of available properties falls outside the budget of many buyers. . . . prompting them to explore other areas for a greater value proposition.” The key takeaway? If you’re encountering difficulties finding a home within your budget, exploring neighboring locations with more budget-friendly options could be beneficial.
Residing Where You Love to Vacation Expanding your search radius might allow you to consider locations that mirror your favorite vacation settings, such as a suburban area near the beach or a mountain town. Data indicates that many homeowners are currently prioritizing such moves. As per the aforementioned Gravy Analytics report:
“Whether it’s the chance to indulge in weekend mountain hikes or to wake up to the serenity of a lakeside sunrise, individuals are relocating to regions once earmarked for leisure getaways.” Even with prevailing home prices and mortgage rates, this sort of transition could be feasible for you. If you’re an existing homeowner, the equity gained from selling your current residence could fund the move and serve as the down payment for your dream home.
Seizing the Opportunity of Remote Work Flexibility The ongoing trend of remote work plays a substantial role in determining migration patterns. According to a recent report by the McKinsey Global Institute:
“Numerous relocations occurred due to employees freed from daily commutes who became less concerned about residing far from the workplace.” If you’re engaged in remote or hybrid work, geographical proximity to your job is no longer an absolute necessity. This enables you to prioritize other factors, such as proximity to loved ones, when selecting a home.
In fact, the same McKinsey Global Institute report highlights that 55% of individuals who relocated during the pandemic moved farther away from their workplaces. Given the continued popularity of remote work, it’s likely that homebuyers will persist in leveraging this flexibility.
In Conclusion A considerable number of people are in the process of moving in today’s landscape. If you seek assistance in navigating the current challenges related to inventory and affordability, and you desire expert guidance in finding your perfect home, let’s connect.
The housing and mortgage sectors have long been considered as vital indicators of a nation’s economic health, reflecting the financial capability of homeowners to manage and maintain their property commitments. The recent statistics from 23Q2 show some optimistic trends that are worth highlighting.
Mortgage Delinquency Rate Takes a Historic Dive
One of the most uplifting pieces of data from the recent quarter is the fall of the delinquency rate for mortgages on one-to-four-unit properties. The rate plunged to 3.37% by the end of 23Q2. In the context of historical data, this drop is significant. It’s a reduction of 27 basis points (bps) compared to the same period in the prior year. Furthermore, and more impressively, this rate is the lowest since the commencement of record-keeping in 1979.
A Closer Look at Different Loan Types
Diving deeper into the data:
Conventional Loan Delinquency Rate: This segment witnessed a year-on-year (Y-o-Y) decline of 35bps. This continued the positive trend seen in the broader market, indicating a strengthening financial capacity among conventional loan borrowers.
VA Loan Delinquency Rate: The VA loan delinquency rate, which caters to veterans and active-duty service members, showed an even steeper decline, dropping 52 points. This indicates an improved financial state among this particular group.
FHA Delinquency Rate: However, not all the news is entirely optimistic. The FHA delinquency rate, which generally aids borrowers with lower credit scores and smaller down payments, witnessed an increase, rising by 10 bps. This trend warrants close attention in the upcoming quarters as it may signal challenges faced by this segment of borrowers.
Foreclosure Rate Continues its Downward Trend
Adding to the optimistic outlook, the foreclosure rate, which is another critical metric to gauge the health of the housing sector, continued its descent. It dropped 6bps Y-o-Y to stand at 0.53%. This figure underscores the improving ability of homeowners to manage their mortgages and reduce the risk of losing their homes.
In Conclusion
The recent statistics from 23Q2 paint a predominantly optimistic picture for the housing and mortgage sectors. The record-low delinquency rate is a testament to the resilience and financial prudence of American homeowners. However, the slight uptick in the FHA delinquency rate serves as a reminder to industry stakeholders to continually monitor and address potential vulnerabilities.
As we move forward, it will be imperative to keep a close eye on these trends, provide necessary support mechanisms, and ensure that the housing sector continues its robust trajectory.
The U.S. economy appears to be sending mixed signals. On the one hand, 23Q2 GDP growth at a seasonally adjusted annualized rate of 2.4% paints an optimistic picture, suggesting that a recession is not imminent. On the other hand, other key indicators raise serious concerns. The Conference Board’s index of coincident economic indicators was at a mere 0.8% annual rate, while the index of leading economic indicators contracted at a staggering 9.8% annual rate in the same quarter. What do these figures mean, and should we be concerned? Let’s delve deeper.
23Q2 GDP Growth: A Surface-Level Analysis
The 2.4% growth in 23Q2 is undeniably a positive sign. It indicates that the U.S. economy is expanding, albeit at a moderate pace. Such growth can create a perception of stability and distance from recessionary pressures.
The Warning Signs: Coincident and Leading Indicators
However, the optimism stemming from GDP growth may be tempered by a closer examination of other indicators. The Conference Board’s index of coincident economic indicators grew at only 0.8% in the same quarter. Even more troubling is the 9.8% contraction in the index of leading economic indicators.
These indexes provide insight into current and future economic conditions, respectively. The stark divergence between them and the GDP growth rate might seem confusing, but it has historical precedent.
Historical Perspective: Divergences Before Recessions
The concern lies in the fact that divergences of this magnitude have occurred before every recession dating back to 1970. Such divergences serve as early warning signs of underlying economic weaknesses that might not be apparent in the headline GDP figure.
The coincident economic indicators provide a snapshot of current economic health, while the leading economic indicators aim to predict future trends. The significant contraction in the leading indicators might suggest that the economy’s underlying momentum is weaker than the GDP growth rate implies.
A Balancing Act: Understanding the Complex Picture
Economic forecasting is never straightforward, and conflicting signals can create uncertainty. Policymakers, investors, and business leaders must consider a wide array of data and not rely solely on one metric such as GDP growth.
While the 23Q2 GDP figure offers reassurance, the large divergences in other key indicators must not be ignored. They call for careful analysis, prudent policy decisions, and contingency planning to mitigate potential risks.
Conclusion: Vigilance and Preparedness
The 23Q2 economic data present a complex picture of the U.S. economy. While GDP growth suggests stability, the divergence in coincident and leading indicators signals potential vulnerabilities.
History has shown that large divergences like those seen in 23Q2 often precede recessions. However, this does not mean that a recession is inevitable. It does mean that economists, policymakers, and business leaders must be vigilant, carefully analyze the full range of data, and take appropriate measures to ensure that the economy remains on a stable footing.
The lesson here is clear: a comprehensive understanding of economic conditions requires more than a cursory glance at GDP figures. It demands a nuanced analysis of various indicators, a respect for historical trends, and a readiness to respond to potential challenges. By doing so, the U.S. can hopefully navigate the uncertain waters ahead and continue on a path of sustainable growth.
When you come across news about the housing market, you may encounter discussions regarding recent decisions made by the Federal Reserve (the Fed). But, what is the impact of these decisions on your plans to purchase a home? Here’s everything you need to know.
The Federal Reserve is making determined efforts to combat inflation. Although there have been 12 consecutive months of cooling inflation (as depicted in the graph below), recent data indicates that inflation is still higher than the Fed’s target of 2%:
While you might have hoped that the Fed would halt their rate hikes due to their progress in curbing inflation, they are cautious not to stop prematurely and risk inflation climbing again. As a result, the Fed has decided to raise the Federal Funds Rate once again last week. According to Jerome Powell, Chairman of the Fed:
“We remain committed to bringing inflation back to our 2 percent goal and to keeping longer-term inflation expectations well anchored.”
Greg McBride, Senior VP, and Chief Financial Analyst at Bankrate, explains how elevated inflation and a robust economy influenced the Fed’s recent decision:
“Inflation remains stubbornly high. The economy has been remarkably resilient, the labor market is still robust, but that may be contributing to the stubbornly high inflation. So, the Fed has to apply the brakes a bit more.”
Although a Federal Funds Rate hike by the Fed does not directly dictate mortgage rates, it does have an impact. As highlighted in a recent article from Fortune:
“The federal funds rate is an interest rate that banks charge other banks when they lend one another money… When inflation is running high, the Fed will increase rates to increase the cost of borrowing and slow down the economy. When it’s too low, they’ll lower rates to stimulate the economy and get things moving again.”
How Does This Affect You?
In simple terms, when inflation is high, mortgage rates also tend to be high. However, if the Fed succeeds in reducing inflation, it could eventually lead to lower mortgage rates, making it more affordable for you to buy a home.
The graph below illustrates this point by showing that when inflation decreases, mortgage rates typically follow suit (see graph below):
As evident from the data above, inflation (indicated by the blue trend line) is gradually decreasing, and based on historical patterns, mortgage rates (represented by the green trend line) are likely to follow suit. McBride offers his insight on the future of mortgage rates:
“With the backdrop of easing inflation pressures, we should see more consistent declines in mortgage rates as the year progresses, particularly if the economy and labor market slow noticeably.”
In Conclusion:
The direction of mortgage rates hinges on inflation. If inflation subsides, mortgage rates are likely to decline as well. Reach out to us for expert advice on housing market changes and what they mean for you. Let’s discuss your plans and find the best solutions for your home buying journey.
In a move that has garnered much attention within the financial world, Fitch Ratings has downgraded the U.S.’s credit rating by one notch, moving it from a pristine AAA to AA+. This change marks a noteworthy shift in the perception of the U.S. economy, but it is not unprecedented.
Back in 2011, Standard & Poor’s (S&P) was the first to downgrade the U.S. from AAA to AA+, causing substantial market upheavals. However, the recent downgrade by Fitch is expected to have a minimal negative impact on markets. Still, it serves as an important indication of increasing political brinksmanship and eroding fiscal competency.
A Historical Perspective
The U.S. has long been considered the world’s largest economy, with its credit rating standing at AAA for decades. The 2011 S&P downgrade was a seismic event, causing ripples across global markets and raising questions about the nation’s fiscal health.
This recent downgrade by Fitch echoes those concerns but within a different context. While the S&P downgrade was driven by immediate economic and political crises, Fitch’s move seems to stem from long-term observations and projections.
The Downgrade’s Implications
While the immediate market reaction to this downgrade is expected to be modest, the underlying reasons should not be overlooked. Fitch’s downgrade points to concerns over increasing political brinksmanship and what they perceive as eroding fiscal competency within the U.S. government.
This downgrade may serve as a wake-up call for policymakers to address underlying fiscal challenges and to navigate political differences more effectively. Without concrete steps, further downgrades could be in the future, with potentially more significant consequences for the U.S. economy.
Moody’s Perspective
Interestingly, Moody’s continues to rate U.S. government debt as AAA, highlighting differences in the methodologies and perspectives of various credit rating agencies. These differences underscore the complexity of evaluating a country’s economic health and the subjectivity involved in such assessments.
Conclusion
Fitch’s recent downgrade of the U.S. credit rating from AAA to AA+ is more than just a financial headline. While the immediate impact on markets is expected to be minimal, it symbolizes a growing concern about the direction of U.S. fiscal policy and political behavior.
The downgrade serves as a reminder that maintaining a robust economy requires more than just short-term fixes. It calls for responsible fiscal management, effective political collaboration, and a long-term vision.
As the global economy continues to evolve, the U.S. must heed the signals from credit rating agencies like Fitch and strive to maintain its financial stability and integrity. This downgrade might be seen as a warning sign, and how the nation responds could shape its economic future for years to come.
At Bassick | Forbes Global Properties, our consultants are renowned specialists in the valuation of conservation easements and skilled in orchestrating conservation transactions in inventive, cost-efficient, and expedient methods.
We regularly collaborate with landowners desiring to protect their property from intensive development. However, these owners also have concerns about restricting their future options or potentially decreasing the worth of their land. As such, Bassick | Forbes Global Properties frequently provides guidance on a variety of solutions, including:
• Transferring land ownership through donation or sales to conservation bodies, resource agencies, or government departments at different levels.
• Granting or selling conservation easements.
• Undertaking “bargain sale” land transactions to gain cash and tax benefits.
• Advising on the process of participating in, or withdrawing from, property tax programs based on “current use”.
• Offering expertise in fundraising to help conservation groups reach their financial objectives through private donations and public funding.
• Providing a deep understanding of the eligibility criteria and procedures to secure funds from most local, state, and federal public funding initiatives.
The appraisers at Bassick | Forbes Global Properties are distinguished experts in assessing conservation easements, including determining a property’s optimum potential use and market value pre- and post-easement enforcement. We’ve undertaken hundreds of conservation easement appraisals on properties stretching from New England to California, ranging from several acres to expansive areas exceeding 500,000 acres. Both landowners and acquiring entities frequently seek our insights on the financial and tax consequences of various easement terms and plans before transferring ownership.
In June, the job market had a bit of a roller coaster ride. Payroll growth took a dip, coming in at 209,000, the lowest it’s been since December 2020. To add to that, the employment numbers for April and May were revised downward by a staggering 110,000. Talk about a tough blow!
However, amidst these challenges, there were some silver linings. Despite the disappointing job growth, the unemployment rate actually decreased. That’s certainly good news for those seeking employment. Additionally, year-on-year wage growth held steady at 4.4% since the beginning of 2023. That’s a pretty decent figure, surpassing the 3.0% to 3.5% range that’s considered necessary to keep inflation in check and align with the Federal Reserve’s 2% inflation target.
Given these mixed signals, the Federal Reserve decided it was time to take action. They opted to increase interest rates, aiming to address any potential inflationary pressures. It’s a move that reflects their commitment to maintaining a stable economy and keeping things on track.
So, while the job market faced some bumps in the road, there were still reasons to stay optimistic about the overall economic situation. It’s always interesting to see how these factors play out and influence our financial landscape.
Everyone’s interpretation of the American Dream is unique and personal. But, for many people, it’s tied to a sense of success, freedom, and prosperity. These are all things that owning a home can help provide.
A recent survey from Bankrate asked respondents which achievements they feel most embody the American Dream. The responses prove owning a home is still important to so many Americans today (see graph below):
As the graph shows, homeownership ranks above other significant milestones, including retirement, having a successful career, and earning a college degree.
A recent report from MYND helps shed light on why so many people value homeownership. It finds:
“. . . nearly two-thirds of Americans (65%) see homeownership as a means of building intergenerational wealth.”
That’s because, when you own a home, your equity (and net worth) grows over time as you pay down your home loan and as home prices appreciate. This can be a key factor in building intergenerational wealth and long-term financial stability.
To further drive home the difference homeownership can make in your life, a report from Fannie Maesays:
“Most consumers (87%) believe owning a home is important to ‘live the good life.’ . . . Notably, significantly more see ‘having less stress’ as a benefit achieved by owning than renting.”
Especially today, this could be because, when you own a home with a fixed-rate mortgage, you stabilize what’s likely your largest monthly expense (your housing cost), and that helps combat the impact of rising costs from inflation.
What Does This Mean for You?
While it may feel challenging to buy a home today with higher mortgage rates and home prices, if the time is right for you, know that when you buy a home, incredible benefits are waiting for you at the end of your journey.
Bottom Line
Buying a home is a significant and powerful choice, embodying the foundation of the American Dream. If you plan to make your homeownership dream a reality this year, let’s connect to start the process.
Looking for a top-producing luxury real estate broker in Boston? Look no further than Bassick Forbes Global Properties. With their unparalleled market expertise and commitment to excellence, they are your go-to agents for all your luxury real estate needs.
When it comes to buying or selling luxury real estate in Boston, you deserve the expertise and dedication of a top-producing real estate broker who understands the intricacies of this exclusive market. That’s where Bassick Forbes Global Properties comes in. Led by luxury real estate expert Catherine Bassick and transaction veteran Michael Bassick, this prestigious brokerage offers unparalleled market expertise, connectivity, and negotiation strategies to help you achieve your real estate goals.
Unmatched Market Expertise:
With years of experience specializing in luxury properties throughout Greater Boston, Bassick Forbes Global Properties has an in-depth understanding of the local market dynamics. Whether you’re seeking a luxurious penthouse in Back Bay, an exquisite waterfront property in Beacon Hill, or a sprawling estate in the prestigious suburbs, their team of professionals can guide you through the process with confidence.
Unparalleled Connectivity:
One of the key advantages of working with Bassick Forbes Global Properties is their extensive network and connectivity within the luxury real estate industry. Their relationships with top-tier developers, investors, and high-net-worth individuals provide clients with access to exclusive listings and off-market opportunities that are not readily available to the general public. This gives you a competitive edge in Boston’s highly competitive luxury real estate market.
Sophisticated Negotiation Strategies:
Navigating the luxury real estate market requires a unique set of negotiation skills. Bassick Forbes Global Properties has honed their negotiation strategies over years of experience, ensuring that their clients receive the best possible terms and conditions in every transaction. They understand the importance of achieving optimal outcomes while protecting their clients’ interests.
Leaders in Luxury Real Estate:
Catherine Bassick, a Best-Selling Wall Street Journal Author, and her team at Bassick Forbes Global Properties have established themselves as leaders in luxury real estate. With a track record that includes the sale of the first single-family home over US $100 million in US history, Catherine is widely recognized among the highest producing real estate brokers worldwide. Their success is a testament to their unparalleled dedication, expertise, and commitment to excellence.
Conclusion:
When it comes to buying or selling luxury real estate in Boston, you need a trusted partner who can navigate the complexities of the market with ease. Bassick Forbes Global Properties, led by Catherine Bassick and Michael Bassick, is a top-producing luxury real estate broker that stands out from the crowd. Their unrivaled market expertise, extensive connectivity, and sophisticated negotiation strategies make them the ideal choice for anyone seeking a premium real estate experience in Boston. Contact Bassick Forbes Global Properties today and embark on your journey towards owning or selling a remarkable luxury property in one of the most coveted cities in the world.
Comparing real estate metrics from one year to another can be challenging in a normal housing market. That’s due to possible variability in the market making the comparison less meaningful or accurate. Unpredictable events can have a significant impact on the circumstances and outcomes being compared.
Comparing this year’s numbers to the two ‘unicorn’ years we just experienced is almost worthless. By ‘unicorn,’ this is the less common definition of the word:
“Something that is greatly desired but difficult or impossible to find.”
The pandemic profoundly changed real estate over the last few years. The demand for a home of our own skyrocketed, and people needed a home office and a big backyard.
Waves of first-time and second-home buyers entered the market.
Already low mortgage rates were driven to historic lows.
The forbearance plan all but eliminated foreclosures.
Home values reached appreciation levels never seen before.
It was a market that forever had been “greatly desired but difficult or impossible to find.” A ‘unicorn’ year.
Now, things are getting back to normal. The ‘unicorns’ have galloped off.
Comparing today’s market to those years makes no sense. Here are three examples:
Buyer Demand
If you look at the headlines, you’d think there aren’t any buyers out there. We still sell over 10,000 houses a day in the United States. Of course, buyer demand is down from the two ‘unicorn’ years. But, according to ShowingTime, if we compare it to normal years (2017-2019), we can see that buyer activity is still strong (see graph below):
Home Prices
We can’t compare today’s home price increases to the last couple of years. According to Freddie Mac, 2020 and 2021, each had historic appreciation numbers. Here’s a graph also showing the more normal years (2017-2019):
We can see that we’re returning to more normal home value increases. There were several months of minimal depreciation in the second half of 2022. However, according to Fannie Mae, the market has returned to more normal appreciation in the first quarter of this year.
Foreclosures
There have already been some startling headlines about the percentage increases in foreclosure filings. Of course, the percentages will be up. They are increases over historically low foreclosure rates. Here’s a graph with information from ATTOM, a property data provider:
There will be an increase over the numbers of the last three years now that the moratorium on foreclosures has ended. There are homeowners who lose their home to foreclosure every year, and it’s heartbreaking for those families. But, if we put the current numbers into perspective, we’ll realize that we’re actually going back to the normal filings from 2017-2019.
Bottom Line:
There will be very unsettling headlines around the housing market this year. Most will come from inappropriate comparisons to the ‘unicorn’ years. Let’s connect so you have an expert on your side to help you keep everything in proper perspective.
In recent times, there has been much talk of Wall Streeters making a mass migration down south to Florida. However, this trend seems to be beginning to fizzle out, as the so-called Sunshine State isn’t shining so bright for some.
High-profile hedge fund manager Dan Sundheim of D1 Capital Partners is one example of this trend reversing. A close source revealed that Sundheim is likely to bid farewell to Florida and return to the iconic hedge fund scene on Park Avenue in New York City.
Even David Tepper, the billionaire hedge fund manager who relocated back to New Jersey from Miami last year, is reportedly staying put in the Garden State, despite his recent $73 million Palm Beach mansion purchase. This intriguing back-and-forth migration pattern underscores the complex considerations that these high-profile financial figures are dealing with.
One can’t help but chuckle at the candid comment made by money manager Jason Mudrick, which might encapsulate this reversal best: “The main problem with moving to Florida is that you have to live in Florida.” His remark underlines the nuanced preferences and personal considerations of these financial bigwigs, proving that the allure of sunshine and tax benefits doesn’t always outshine the value of cultural fit and lifestyle preferences.
In the world of high finance and rapid generational change, one thing’s for sure: there’s never a dull moment. Keep your eyes peeled as Gen Z surges into the workforce and as Wall Street navigates the pull between the states. Change is the only constant, and it will be fascinating to watch these shifts unfold.
The incoming tide of the next generation is on its way and will reshape the workforce landscape in the coming decade. This new wave of young professionals is none other than Generation Z, those born between the mid-1990s and 2010. According to a study by Oxford Economics and commissioned by Snap, this burgeoning generation is projected to grow to a staggering 51 million by 2030. Their after-tax income? An astounding $2 trillion.
As Gen Z steadily grows to encompass almost a third of the workforce by the next decade, they bring with them a digital skillset, unlike any generation before them. Born and raised in the digital age, their proficiency with technology, familiarity with online platforms, and understanding of digital trends are all intrinsic to their identity.
