median home price

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There’s no denying it, the Big Nashty is the place to be.

The Nashville housing market has been a hot topic of discussion in recent years. As the city continues to thrive and attract new residents, buyers and renters need to understand the current state of the housing market and rental market in Nashville.

In this article, we will delve into the key factors shaping the Nashville housing market in 2024, including supply and demand, home prices, rental market dynamics and future projections. Grab your cowboy boots and your trusty six-string because we’re exploring Nashville in all its glory.

Overview of the Nashville housing market

Known to many as Music City, Nashville has experienced significant growth in recent years. With a healthy economy, a legendary music scene and a desirable quality of life, it’s no wonder that people are flocking to this city in search of new opportunities. However, this rapid population growth has put immense pressure on Nashville’s housing and rental market.

Population growth and housing demand

One of the primary drivers of the housing market in Nashville is the city’s population growth. According to the latest data, Nashville has experienced a population increase of over 10% in the past five years. This surge in population has created a high demand for housing, leading to increased competition and rising prices.

Supply constraints and affordability challenges

While the demand for housing in Nashville continues to rise, the supply has struggled to keep pace. This supply-demand imbalance has resulted in skyrocketing home prices and limited housing options for buyers. As a result, affordability has become a significant concern for many residents, especially first-time homebuyers.

Pricing trends in the Nashville housing market

The housing market for homes in Nashville has seen a consistent upward trend in prices over the past few years. This rise in prices can be attributed to a number of factors, including limited inventory, strong demand and other economic conditions. Let’s take a closer look at the pricing trends in different segments of the Nashville housing market.

Single-family homes

Single-family homes have experienced substantial price appreciation in Nashville. The median home price in the city has decreased by 6.1% over the past year, reaching an all-time high of $465,000. This price surge can be attributed to the high demand for single-family homes and the limited inventory availability.

Condominiums and townhouses

The condominium and townhouse market in Nashville has also witnessed significant price growth. With a median price increase of 36.4% in the past year, these properties have become increasingly popular among buyers looking for a more affordable option in the city. However, even with the price appreciation, condos and townhouses still offer a more affordable entry point into the Nashville housing market than single-family homes.

Rental market dynamics in Nashville

In addition to the buying market, the rental market in Nashville is also experiencing its fair share of challenges and opportunities. Let’s explore the key dynamics shaping the rental market in the city.

High demand and low vacancy rates

Similar to the real estate market, the rental market in Nashville is characterized by high demand and low vacancy rates. With an influx of new residents and a limited supply of rental units, competition among renters has intensified. As a result, rental prices have been on the rise, making it increasingly challenging for tenants to find affordable options.

Luxury rentals and amenities

As the demand for rentals continues to grow, developers have been focusing on luxury rental properties with upscale amenities. These high-end rentals cater to professionals and individuals looking for a premium living experience in Nashville. From rooftop pools to fitness centers and concierge services, these luxury rentals offer a wide range of amenities to attract tenants.

Future projections and outlook for the Nashville housing market

Looking ahead, what can we expect for the future of the Nashville housing market? While it’s challenging to make precise predictions, several factors may influence the market in the coming years.

Continued population growth

Nashville’s population is projected to continue growing in the foreseeable future. As more people are drawn to the city’s strong culture and fruitful job market, the demand for housing will likely remain high. This sustained population growth will put further pressure on the housing market, potentially leading to even higher prices and increased competition.

Infrastructure and development

To accommodate the growing population, Nashville has been investing in public infrastructure and large-scale development projects. These initiatives aim to improve transportation, expand housing options and enhance the overall quality of life in the city for all residents.

Find a new place in Nashville

The Nashville housing market is experiencing significant challenges and opportunities in 2024. With a rapidly growing population and limited housing supply, the market is characterized by high demand, rising prices and affordability concerns. Buyers and renters face intense competition, making it crucial to stay informed and prepared. As the city continues to evolve, it will be fascinating to see how the Nashville housing market adapts and thrives in the years to come.

When you’re ready to stake your claim in the Nashville market, you know where to start your search for a Nashville apartment or house.

Source: rent.com

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It’s always sunny in Philadelphia, whether you’re in a home or an apartment.

Philadelphia’s real estate market is a dynamic landscape with various trends and factors influencing the choices of residents. From affordable neighborhoods to luxury living options, this article delves into the overall market trends, neighborhood insights, market dynamics and renting scenarios in the City of Brotherly Love.

Overall housing market trends

The Philadelphia housing market exhibits a diverse range of trends, catering to individuals with varying preferences and budget constraints. Let’s take a deeper dive into Philadelphia real estate.

Philadelphia’s real estate market is categorized as “somewhat competitive.” Certain homes attract multiple offers, while the average homes typically sell for approximately 3% below the listed price and enter pending status in approximately 47 days. On the other hand, in-demand homes may sell for close to the list price and enter pending status within about 18 days.

In December 2023, the median home price in Philadelphia experienced a 2.9% decrease from the previous year, reaching $235K. The average time homes spent on the market was 52 days, slightly less than the 54 days recorded last year. The number of homes sold in December this year increased to 1,067, compared to 1,049 in the previous year.

Neighborhood insights

Find out what Philadelphia homes are selling for in different neighborhoods, as well as how long they’re staying on the market.

  • Brewerytown: This neighborhood is characterized by listings like a recent property that sold for the listing price of $450,000 after being on the market for a long stay of 103 days.
  • Lower Moyamensing: A competitive market shown through listings like a three-bedroom recently sold for 4% under the list price at $239,000. This property sat on the market for 72 days.
  • Northeast Philadelphia: A highly sought-after neighborhood with listings like a four-bedroom that sold for 7% over the listing price at $374,100. This listing went quickly as it only spent 38 days on the market.
  • Center City: Known as the heart of Philadelphia has pricier listings like the recently sold two-bedroom that sold for $575,000 after 91 days on the market. This property sold for 9% under the list price.
  • Germantown: A more affordable neighborhood characterized by listings like a three-bedroom that recently sold for its original listing price of $155,000 after spending 91 days on the market.

Market dynamics

Many factors, including economic conditions, job opportunities and urban development initiatives influence the dynamics of the Philadelphia housing market. These factors fluctuate between the varying Philadelphia neighborhoods. Home prices, buyer demand and overall Philadelphia housing market trends are dependent on the individual neighborhoods.

Renting in Philadelphia

The rental market in Philadelphia offers a diverse array of options, featuring varying prices and living experiences depending on the specific neighborhood. Let’s delve into the current status of the rental market in Philadelphia.

Rental price trends

Philadelphia has experienced fluctuating rent prices, just as other large US cities have as well. Upper North Philadelphia stands out with an average 1-bedroom apartment rent of $925 which is a 61% rise in rent YoY.

Areas like Rittenhouse Square and University City saw a small change of 8%, raising their one-bedroom options to $2,200 and $2,386, respectively. Conversely, affordable options are available in Lower North and Brewerytown, where average 1-bedroom rents are down 17% bringing rent to $1,450.

Affordable neighborhoods

Unearthing the most affordable neighborhoods is crucial for those prioritizing budget-friendly living in Philadelphia. Cedar Park, Germantown and Mantua provide affordable housing options, presenting alternatives to the city’s average 1-bedroom rent of $1,771.

Popular neighborhoods

Where are the neighborhoods that new Philadelphia residents are flocking to? We’ve identified a few of the top contenders.

Lower North: Lower North Philadelphia combines historical allure with modern urban living, creating a diverse and dynamic atmosphere for residents and visitors alike.

Brewerytown: Brewerytown, once industrial, is now a trendy residential enclave with historic charm, attracting a creative community drawn to its artistic vibrancy and proximity to Fairmount Park.

North Central: North Central, centered around Temple University, pulsates with academic energy and community engagement, making it a lively hub for both students and residents.

Avenue of the Arts North: Avenue of the Arts North, at the heart of Philadelphia, is a cultural epicenter renowned for its theaters, music venues and artistic ambiance, offering residents a vibrant and enriched urban experience.

Migration patterns

Whether individuals are arriving in search of new opportunities or departing for different horizons, tracking these migration patterns contributes to a comprehensive understanding of the Philadelphia housing dynamics. According to Redfin market data gathered Oct 2023 – Dec 2023, 22% of Philadelphia homebuyers searched to move out of Philadelphia, while 78% looked to stay within the metropolitan area.

People are coming to Philadelphia from:

People are leaving Philadelphia for:

Luxury living options

For those with a penchant for luxury apartment living, Philadelphia boasts options in University City, Logan Square and Rittenhouse Square. These neighborhoods provide upscale living experiences, albeit at a higher cost compared to the city’s average 1-bedroom rent. Some luxury apartment options are found in communities like The Riverloft Apartment Homes, The Alexander and The Atlantic.

Taxes

Taxes play a significant role in the overall cost of living in any city. The minimum combined sales tax rate for Philadelphia, Pennsylvania is 8%. This is the total of state, county and city sales tax rates.

Unveiling the keys to your Philadelphia dream

Philadelphia’s housing market holds so many diverse options, catering to a wide range of preferences and budgets. Whether you’re drawn to the affordability of specific neighborhoods or the luxury living options in the city’s vibrant districts, this guide will assist you in making informed decisions in the pursuit of a home in the City of Brotherly Love.

Are you ready to make the move to Philly? Find the right Philadelphia apartments to match your needs.

Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.

Source: rent.com

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It’s always sunny in Philadelphia, whether you’re in a home or an apartment.

Philadelphia’s real estate market is a dynamic landscape with various trends and factors influencing the choices of residents. From affordable neighborhoods to luxury living options, this article delves into the overall market trends, neighborhood insights, market dynamics and renting scenarios in the City of Brotherly Love.

Overall housing market trends

The Philadelphia housing market exhibits a diverse range of trends, catering to individuals with varying preferences and budget constraints. Let’s take a deeper dive into Philadelphia real estate.

Philadelphia’s real estate market is categorized as “somewhat competitive.” Certain homes attract multiple offers, while the average homes typically sell for approximately 3% below the listed price and enter pending status in approximately 47 days. On the other hand, in-demand homes may sell for close to the list price and enter pending status within about 18 days.

In December 2023, the median home price in Philadelphia experienced a 2.9% decrease from the previous year, reaching $235K. The average time homes spent on the market was 52 days, slightly less than the 54 days recorded last year. The number of homes sold in December this year increased to 1,067, compared to 1,049 in the previous year.

Neighborhood insights

Find out what Philadelphia homes are selling for in different neighborhoods, as well as how long they’re staying on the market.

  • Brewerytown: This neighborhood is characterized by listings like a recent property that sold for the listing price of $450,000 after being on the market for a long stay of 103 days.
  • Lower Moyamensing: A competitive market shown through listings like a three-bedroom recently sold for 4% under the list price at $239,000. This property sat on the market for 72 days.
  • Northeast Philadelphia: A highly sought-after neighborhood with listings like a four-bedroom that sold for 7% over the listing price at $374,100. This listing went quickly as it only spent 38 days on the market.
  • Center City: Known as the heart of Philadelphia has pricier listings like the recently sold two-bedroom that sold for $575,000 after 91 days on the market. This property sold for 9% under the list price.
  • Germantown: A more affordable neighborhood characterized by listings like a three-bedroom that recently sold for its original listing price of $155,000 after spending 91 days on the market.

Market dynamics

Many factors, including economic conditions, job opportunities and urban development initiatives influence the dynamics of the Philadelphia housing market. These factors fluctuate between the varying Philadelphia neighborhoods. Home prices, buyer demand and overall Philadelphia housing market trends are dependent on the individual neighborhoods.

Renting in Philadelphia

The rental market in Philadelphia offers a diverse array of options, featuring varying prices and living experiences depending on the specific neighborhood. Let’s delve into the current status of the rental market in Philadelphia.

Rental price trends

Philadelphia has experienced fluctuating rent prices, just as other large US cities have as well. Upper North Philadelphia stands out with an average 1-bedroom apartment rent of $925 which is a 61% rise in rent YoY.

Areas like Rittenhouse Square and University City saw a small change of 8%, raising their one-bedroom options to $2,200 and $2,386, respectively. Conversely, affordable options are available in Lower North and Brewerytown, where average 1-bedroom rents are down 17% bringing rent to $1,450.

Affordable neighborhoods

Unearthing the most affordable neighborhoods is crucial for those prioritizing budget-friendly living in Philadelphia. Cedar Park, Germantown and Mantua provide affordable housing options, presenting alternatives to the city’s average 1-bedroom rent of $1,771.

Popular neighborhoods

Where are the neighborhoods that new Philadelphia residents are flocking to? We’ve identified a few of the top contenders.

Lower North: Lower North Philadelphia combines historical allure with modern urban living, creating a diverse and dynamic atmosphere for residents and visitors alike.

Brewerytown: Brewerytown, once industrial, is now a trendy residential enclave with historic charm, attracting a creative community drawn to its artistic vibrancy and proximity to Fairmount Park.

North Central: North Central, centered around Temple University, pulsates with academic energy and community engagement, making it a lively hub for both students and residents.

Avenue of the Arts North: Avenue of the Arts North, at the heart of Philadelphia, is a cultural epicenter renowned for its theaters, music venues and artistic ambiance, offering residents a vibrant and enriched urban experience.

Migration patterns

Whether individuals are arriving in search of new opportunities or departing for different horizons, tracking these migration patterns contributes to a comprehensive understanding of the Philadelphia housing dynamics. According to Redfin market data gathered Oct 2023 – Dec 2023, 22% of Philadelphia homebuyers searched to move out of Philadelphia, while 78% looked to stay within the metropolitan area.

People are coming to Philadelphia from:

People are leaving Philadelphia for:

Luxury living options

For those with a penchant for luxury apartment living, Philadelphia boasts options in University City, Logan Square and Rittenhouse Square. These neighborhoods provide upscale living experiences, albeit at a higher cost compared to the city’s average 1-bedroom rent. Some luxury apartment options are found in communities like The Riverloft Apartment Homes, The Alexander and The Atlantic.

Taxes

Taxes play a significant role in the overall cost of living in any city. The minimum combined sales tax rate for Philadelphia, Pennsylvania is 8%. This is the total of state, county and city sales tax rates.

Unveiling the keys to your Philadelphia dream

Philadelphia’s housing market holds so many diverse options, catering to a wide range of preferences and budgets. Whether you’re drawn to the affordability of specific neighborhoods or the luxury living options in the city’s vibrant districts, this guide will assist you in making informed decisions in the pursuit of a home in the City of Brotherly Love.

Are you ready to make the move to Philly? Find the right Philadelphia apartments to match your needs.

Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.

Source: rent.com

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The United States Congress passed new legislation extending a tax provision that allows homeowners to deduct the cost of mortgage insurance premiums from their federal income tax returns through 2010.

“This legislation has the potential to help thousands of low- and moderate-income Americans secure affordable mortgages that keep them in their homes and keep their communities strong,” Steve Smith, Chief Executive Officer of The PMI Group, Inc. and PMI Mortgage Insurance Co., said in a press release.

“The median home price in the United States today is over $200,000, which means borrowers would need to save more than $40,000 in order to make a traditional down payment of 20 percent. Making the cost of mortgage insurance tax deductible for qualified borrowers creates opportunities for more Americans to secure safe, predictable mortgage loans with a down payment of as little as 3 to 5 percent,” Smith added.

The cost of mortgage insurance first became tax deductible for transactions, such as home purchases and mortgage refinances, closed in 2007.

Borrowers with adjusted gross incomes below $100,000 were able to deduct 100 percent of their mortgage insurance premiums paid between January 1 and December 31, 2007, while families with incomes up to $109,000 were eligible for a partial deduction.

“On average, this annual tax break amounts to $350 per taxpayer. That’s cash in the pockets of hard working homeowners,” said Kevin Schneider, president of the U.S. mortgage insurance business for Genworth Financial, Inc, in a statement.

The legislation is part of the Mortgage Forgiveness Debt Relief Act of 2007 approved by both the U.S. House of Representatives and the U.S. Senate, and now goes to President Bush for final approval.

Source: thetruthaboutmortgage.com

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The cost of living in Boston is one of the highest in the country at 50.8 percent above the national average.

Prices are a bit higher all around, but Boston costs less in general than major cities like New York City’s Manhattan or San Francisco. Other cities, like Seattle and Los Angeles, are more Boston’s equal when it comes to the overall cost of living.

Monthly costs really vary depending on where you live in Boston and what you love to do. If you need tickets to every Red Sox game, living expenses are going to go up. If you can’t resist the pull of the North End for dinner every Saturday night, your need a bigger budget.

Regardless of your indulgences, though, the cost of living in Boston is manageable if you understand what you’re getting into before you make the move. Check out how all the estimated monthly costs break down to see if this amazing but expensive city is right for you.

Boston housing prices

As is the case with other major metros across the U.S., the housing market — both for-sale and for-rent — is hot in Boston, with no signs of slowing down. Rentals are in demand, and with the huge influx of college students every fall, affordable units are hard to find.

Housing costs in Boston are 120.9 percent higher than the national average. That puts monthly rent up there with cities known for outrageous prices like San Francisco and New York City.

Although in Boston, rents only increased a little over last year. Still, the total price is high for both one-bed and two-bed units. An average one-bedroom apartment will cost you $3,922 per month, up 9 percent from last year. A two-bedroom comes in at $4,952 per month, up 5 percent over last year.

Of course, living further away from the city center helps bring prices down, but it’s still a challenge, especially as a single person, to find solid housing. You might have to settle for something a little small, or look for monthly rents slightly outside the city, but close to public transportation.

If you’re brave enough to try to buy in Boston, the median home price is $796,250, up 9.1 percent over last year. Homes stay on the market for about three weeks, which is not very long.

Boston cost by neighborhood

There are plenty of amazing neighborhoods to live in throughout Boston, and you can find one that works for you at almost any price point.

Of course, the most expensive neighborhoods are in the very heart of the city. They’ll give you a sweet address and put you in proximity to everything, but they’ll heavily impact your cost of living index. An average one-bedroom right in Downtown has a monthly cost of $4,463. Getting closer to Boston Common, Back Bay East is $4,383 for an average one-bed, an 83 percent price increase over last year.

Getting closer to the city’s average one-bed cost is Fenway-Kenmore and the South End.

Boston University and Northeastern University students flock to the cheaper neighborhoods once they move off campus for housing. They’re most interested in places like North Allston with one-beds at $2,175. They’ll even venture outside of the Boston metropolitan area to find a deal in places like Brighton.

Boston food prices

Boston has evolved into a foodie’s paradise over the last decade. In addition to its revered Irish pubs, lobster rolls and clam chowder, James Beard-award-winning chefs have opened esteemed eateries in just about every corner of the city specializing in a wide variety of cuisines.

Restaurant meals in Boston can vary, so there are affordable options for food. At an inexpensive restaurant, your average meal only costs $20, but if you’re on a date, a three-course meal for two rounds out to $83.

When it comes to groceries and home cooking, you can expect to spend slightly more as Boston’s food costs are 16 percent higher than the national average. That’s about the same as where prices stood last year.

How does this translate when you’re looking at food expenses? A steak is going to run you about $17.92. A half-gallon of milk and a box of cereal is $8.35. That six-pack of beer (preferably Sam Adams) rings out to about $10.99.

All of these are affordable items, but with a long grocery list, the money totals up fast. It’s why budgeting is so important to maintaining a solid quality of life.

Boston utility prices

Boston gives you all four seasons in the extremes. From red-hot summers to windy and snowy winters, you’ll definitely get some variety weather-wise.

This also means utilities are a big item on your list of expenses. Though many apartments you rent don’t come with central air, they all have heaters that you’ll run full blast through most of the winter. For AC, opt for a window unit, even though it will raise your electricity bill. In an average size apartment, you’ll need at least one per bedroom (a fan could work in the living area).

With all this, your utility cost in Boston is 23.5 percent above the national average. This is pretty on par with most New England cities. Your energy bill each month will cost you around $250.47.

Boston transportation prices

One of the great things about living in Boston is you don’t need a car. Public transit via the Massachusetts Bay Transportation Authority (a.k.a. the MBTA or The T) is so convenient. It also makes transportation expenses really a combination of traveling on The T and car care, if you decide to own one. Overall, transportation costs are 21.1 percent above the national average.

Being a driver in Boston does come with a hefty expense. Most apartments don’t have parking spaces as part of the rent, so you have to pay extra. Parking is almost always paid either in a garage or via meters, and any free spots fill up quickly and are hard to find.

Renting a monthly parking spot in Boston will cost you around $300 on average, and metered parking ranges from $2 to $3.75 per hour.

However, once you park in the city, it’s easy to cut back on transportation costs thanks to a highly walkable layout in this eastern Massachusetts town. All in all, Boston ranks high in terms of walking (an 89 walk score,) and is pretty friendly for bike riders (77 bike score), as well.

The Massachusetts Bay Transportation Authority

Bostonians may not love the MBTA, but they sure take advantage of The T when living in or near the city. This intricate subway system goes everywhere thanks to the Blue, Red, Green and Orange lines. There are also buses and the Silver Line to get locals everywhere a train doesn’t already go.

A one-way subway ride is $2.40, and bus fares are $1.70 per way. Using a CharlieTicket is the easiest way to ride, and this pass gives you access to commuter rail trips and ferry rides, as well.

Boston healthcare prices

Although it’s difficult to nail down specific healthcare costs because individuals have their own healthcare needs, the healthcare system in Boston is top tier.

The overall cost of healthcare in the city is 17 percent higher than the national average, a 2.5 percent dip over last year. This is less than in other large cities like Chicago, San Francisco and Seattle.

Even with this piece of your cost of living on the high side, individual medical visits aren’t too bad, even without insurance.

  • Doctor’s visits are around $182.50
  • Eye doctor visits are around $115.88
  • Dentist visits are around $131.50

And, with good insurance coverage, these prices go down even more, allowing a person to afford the care they need to stay healthy.

Boston goods and services prices

When it comes to quality of life, goods and services are a huge piece. This is everything in your budget each month you want to do but could live without if it became necessary.

Overall, goods and services are 19.9 percent above the national average. This means entertainment costs are usually higher for all the fun things you do out in the city like waiting to grab a pizza ($12.99) in the North End or going to see a movie ($14.96) off Boston Common.

Even with Boston’s higher prices, there are plenty of things to do in the city for free. Wander through the Public Garden or walk the Freedom Trail. It doesn’t cost anything to take in the history of this amazing place.

Taxes in Boston

Massachusetts has a state-wide sales tax only. Individual cities cannot add on to it. This means you’ll pay 6.25 percent on things you buy everywhere in the state. It also means that when you wrack up a $1,000 bill shopping on Newbury Street or around Quincy Market at Faneuil Hall, $62.50 goes straight to taxes.

To make Boston life a little easier, the state offers an annual sales tax holiday, usually in August. This is a tax-exempt weekend for retail items and a big shopping weekend for many.

How much do I need to earn to live in Boston?

Taking it from the experts, 30 percent of your salary should go toward rent. But, when talking about the cost of living in Boston, that number gets pretty high. Taking the average one-bedroom rent as the base ($3,863), you’d need to have an average salary of $154,520.

Even with a solid job market, the median household income is only $76,298. Most likely, your average salary is not going to make it possible to live alone in the heart of the city. But, you’ve got options. To get specific, use our rent calculator to compare your current budget and savings with the cost of living averages.

Living in Boston

Living in Boston certainly comes with the expectation you’ll shell out a lot of money to settle in. But, this is a place so worth considering. There are passionate people, a booming business climate, countless cultural institutions and world-class colleges and universities.

This information and more are things that every Bostonian knows. It’s what you’ll discover if you can make the cost of living in Boston work within your budget.

The Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of August 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.

Source: rent.com

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If you spent your teenage years waiting anxiously for one of your siblings to get out of the shower, the idea of selling your spacious, multi-bathroom home and moving into a smaller house or condo may feel like a reversal of fortune.

Yet for many retirees, downsizing makes financial and practical sense. Younger baby boomers — those currently ranging in age from 57 to 66 — made up 17% of recent home buyers, while older boomers — ages 67 to 75 — accounted for 12%, according to a 2022 report from the National Association of Realtors Research Group. Boomers’ primary reasons for buying a home were to be closer to friends and family, as well as a desire to move into a smaller home, the report said. Both younger and older boomers were more likely than others to purchase a home in a small town, and younger boomers were the most likely to buy in a rural area.

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For retirees Fred and Shelby Bivins, selling their home in Green Valley, Ariz., will enable them to realize their dream of traveling in retirement. The Bivinses have put their 2,050-square-foot Arizona home on the market and plan to relocate to their 1,600-square-foot summer condo in Fish Creek, Wis., a small community about 50 miles from Green Bay. They plan to live in Wisconsin in the spring and summer and spend the winter months in a short-term rental in Arizona, where they have family.  

Fred, 65, says the decision to downsize was precipitated by a two-month stay in Portugal last year, one of several countries they hope to visit while they’re still healthy enough to travel. “We’ve had Australia and New Zealand on our list for many years, even when we were working,” says Shelby, 68. The Bivinses are also considering a return visit to Portugal. Eliminating the cost of maintaining their Arizona home will free up funds for those trips. 

With help from Chris Troseth, a certified financial planner based in Plano, Texas, the Bivinses plan to invest the proceeds from the sale of their home in a low-risk portfolio. Once they’re done traveling and are ready to settle down, they intend to use that money to buy a smaller home in Arizona. “Selling their primary home will generate significant funds that can be reinvested to support their lifestyle now and in the future,” Troseth says. “Downsizing for this couple will be a positive on all fronts.”

Challenges for downsizers 

For all of its appeal, downsizing in today’s market is more complicated than it was in the past. With 30-year fixed interest rates on mortgages recently approaching 8%, many younger homeowners who might otherwise upgrade to a larger home are unwilling to sell, particularly if it means giving up a mortgage with a fixed rate of 3% or less. More than 80% of consumers surveyed in September by housing finance giant Fannie Mae said they believe this is a bad time to buy a home and cited mortgage rates as the top reason for their pessimism. “This indicates to us that many homeowners are probably not eager to give up their ‘locked-in’ lower mortgage rates anytime soon,” Fannie Mae said in a statement. As a result, buyers are competing for limited stock of smaller homes, says Hannah Jones, senior economic research analyst for Realtor.com. 

Here, though, many retirees have an advantage, Jones says. Rising rates have priced many younger buyers out of the market and made it more difficult for others to obtain approval for a loan. That’s not an issue for retirees who can use proceeds from the sale of their primary home to make an all-cash offer, which is often more attractive to sellers. 

Retirees also have the ability to cast a wider net than younger buyers, whose choice of homes is often dictated by their jobs or a desire to live in a well-rated school district. While the U.S. median home price has soared more than 40% since the beginning of the pandemic, prices have risen more slowly in parts of the Northeast and Midwest, Jones says. “We have seen the popularity of Midwest markets grow over the last few months because out of all of the regions, the Midwest tends to be the most affordable,” she says. “You can still find affordable homes in areas that offer a lot of amenities.” 

Meanwhile, selling your home may be somewhat more challenging than it was during the height of the pandemic, when potential buyers made offers on homes that weren’t even on the market. The Mortgage Bankers Association reported in October that mortgage purchase applications slowed to the lowest level since 1995, as the rapid rise in mortgage rates has pushed many potential buyers out of the market. Sales of previously owned single-family homes fell a seasonably adjusted 2% in September from August and were down 15.4% from a year earlier, according to the National Association of Realtors. “As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” NAR chief economist Lawrence Yun said in a statement. 

However, because of tight inventories, there’s still demand for homes of all sizes, Jones says, so if your home is well maintained and move-in ready, you shouldn’t have difficulty selling it. “The market isn’t as red-hot as it was during the pandemic, but there’s still a lot to be gained by selling now,” she says.

Other costs and considerations 

If you live in an area where real estate values have soared, moving to a less expensive part of the country may seem like a logical way to lower your costs in retirement. While the median home price in the U.S. was $394,300 in September, there’s wide variation in individual markets, from $1.5 million in Santa Clara, Calif., to $237,000 in Davenport, Iowa. But before you up and move to a lower-cost locale, make sure you take inventory of your short- and long-term expenses, which could be higher than you expect. 

Selling your current home, even at a significant profit, means you will incur costs, including those to update, repair and stage it, as well as a real estate agent’s commission (typically 5% to 6% of the sale price). In addition, ongoing costs for your new home will include homeowners insurance, property taxes, state and local taxes, and homeowners association or condo fees.

Nicholas Bunio, a certified financial planner in Berwyn, Pa., says one of his retired clients moved to Florida and purchased a home that was $100,000 less expensive than her home in New Jersey. Florida is also one of nine states without income tax, which makes it attractive to retirees looking to relocate. Once Bunio’s client got there, however, she discovered that she needed to spend $50,000 to install hurricane-proof windows. Worse, the only home-owners insurance she could find was through Citizens Property Insurance, the state-sponsored insurer of last resort, and she’ll pay about $8,000 a year for coverage. Her property taxes were higher than she expected, too. When it comes to lowering your cost of living after you downsize, “it’s not as simple as buying a cheaper house,” Bunio says 

Before moving across the country, or even across the state, you should also research the availability of medical care. “Oftentimes, those considerations are secondary to things like proximity to family or leisure activities,” says John McGlothlin, a CFP in Austin, Texas. McGlothlin says one of his clients moved to a less expensive rural area that’s nowhere near a sizable medical facility. Although that’s not a problem now, he says, it could become a problem when they’re older. 

If you use original Medicare, you won’t lose coverage if you move to another state. But if you’re enrolled in Medicare Advantage, which is offered by private insurers as an alternative to original Medicare, you may have to switch plans to avoid losing coverage. To research the availability of doctors, hospitals and nursing homes in a particular zip code, go to www.medicare.gov/care-compare.

At a time when many seniors suffer from loneliness and isolation, a sense of community matters, too. Bunio recounts the experience of a client who considered moving from Philadelphia to Phoenix after her daughter accepted a job there. The cost of living in Phoenix is lower, but the client changed her mind after visiting her daughter for a few months. “She has no friends in Phoenix,” he says. “She’s going on 61 and doesn’t want to restart life and make brand-new connections all over again.”

Time is on your side 

Unlike younger home buyers, who may be under pressure to buy a place before starting a new job or enrolling their kids in school, downsizers usually have plenty of time to consider their options and research potential downsizing destinations. Once you’ve settled on a community, consider renting for a few months to get a feel for the area and a better idea of how much it will cost to live there. Bunio says some of his clients who are behind on saving for retirement or have high health care costs have sold their homes, invested the proceeds and become permanent renters. This strategy frees them from property taxes, homeowners insurance, homeowners association fees and other expenses associated with homeownership 

The boom in housing values has boosted rental costs, as the shortage of affordable housing increased demand for rental properties. But thanks to the construction of new rental properties in several markets, the market has softened in recent months, according to Zumper, an online marketplace for renters and landlords. A Zumper survey conducted in October found that the median rent for a one-bedroom apartment fell 0.4% from September, the most significant monthly decline this year. 

In 75 of the 100 cities Zumper surveyed, the median rent for a one-bedroom apartment was flat or down from the previous month. (For more on the advantages of renting in retirement, see “8 Great Places to Retire—for Renters,” Aug.)

Aging in place

Even if you opt to age in place, you can tap your home equity by taking out a home equity line of credit, a home equity loan or a reverse mortgage. At a time when interest rates on home equity lines of credit and loans average around 9%, a reverse mortgage may be a more appealing option for retirees. With a reverse mortgage, you can convert your home equity into a lump sum, monthly payments or a line of credit. You don’t have to make principal or interest payments on the loan for as long as you remain in the home. 

To be eligible for a government-insured home equity conversion mortgage (HECM), you must be at least 62 years old and have at least 50% equity in your home, and the home must be your primary residence. The maximum payout for which you’ll qualify depends on your age (the older you are, the more you’ll be eligible to borrow), interest rates and the appraised value of your home. In 2024, the maximum you could borrow was $1,149,825.

There’s no restriction on how homeowners must spend funds from a reverse mortgage, so you can use the money for a variety of purposes, including making your home more accessible, generating additional retirement income or paying for long-term care. You can estimate the value of a reverse mortgage on your home at www.reversemortgage.org/about/reverse-mortgage-calculator.

Up-front costs for a reverse mortgage are high, including up to $6,000 in fees to the lender, 2% of the mortgage amount for mortgage insurance, and other fees. You can roll these costs into the loan, but that will reduce your proceeds. For that reason, if you’re considering a move within the next five years, it’s usually not a good idea to take out a reverse mortgage.

Another drawback: When interest rates rise, the amount of money available from a reverse mortgage declines. Unless you need the money now, it may make sense to postpone taking out a reverse mortgage until the Federal Reserve cuts short-term interest rates, which is unlikely to happen until late 2024 (unless the economy falls into recession before that). Even if interest rates decline, they aren’t expected to return to the rock-bottom levels seen over the past 15 years, according to a forecast by The Kiplinger Letter. And with inflation still a concern, big rate cuts such as those seen in response to recessions and financial crises over the past two decades are unlikely. 

Note: This item first appeared in Kiplinger’s Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Related Content

Source: kiplinger.com

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TPO, Anti-Valuation Bias Tools; Retail and Broker News; Interview on Home Equity Levels

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TPO, Anti-Valuation Bias Tools; Retail and Broker News; Interview on Home Equity Levels

By:
Rob Chrisman

Thu, Dec 21 2023, 10:43 AM

“What do you call a Christmas wreath made out of $100 bills? Aretha Franklins.” It’s cutting-edge humor like this that keeps readers coming back for more, right? Or astronomy tips, as today is the Winter Solstice, with the least amount of sunlight in the Northern Hemisphere and a little music to go along with it. “The winter is here again, oh Lord. Haven’t been home in a year or more.” (Look at that hair!) Lenders and vendors are hoping that the decline in rates keeps the “winter” away from lending, and holds more salary cuts, layoffs, and furloughs at bay. Mortgage banking is not alone in expanding automation and trying to save money. Do you think that you deserve a lower price for checking out of a store yourself and not using a paid clerk? Many do. The number of people who work as cashiers dropped from 1.4 million in 2019 to 1.2 million today, and over the next decade the BLS projects an additional 10 percent decline. (Today’s podcast can be found here, and this week’s is sponsored by Lender Toolkit’s AI-powered AI Underwriter and Prism borrower income automation tools. Get loans approved in under two minutes. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar. Listen to an interview with Hometap’s Dan Burnett on record home equity levels and how Americans can best leverage them.)

Lender and Broker Products, Programs, and Services

“With increased regulatory focus on property-valuation bias, lenders need robust risk-management processes in place. The recently released interagency proposals on AVM-quality control and ROV-process guidance are designed to prevent valuation bias and help ensure industry stakeholders follow fair-lending practices. Watch our complimentary on-demand webinar to learn how you can prepare, and implement the tools needed to support the proposed changes.* Our experts discuss how to identify potential bias in valuations, ways to mitigate bias risk, how to monitor AVM and appraisal compliance with fair-lending requirements, and more. Watch this timely and important webinar here. *Check with your compliance or legal department for information on complying with applicable law.”

“As the year draws to a close, Planet Home Lending extends our heartfelt gratitude to our invaluable correspondent partners. Together, we’ve stood strong in the face of challenges in a demanding market. Thank you for being an integral part of our shared journey. As we look forward to 2024, we continue our commitment to being your go-to team, your reliable partner, your toolkit, and your product gateway. Here’s to a smooth finish for 2023 and a prosperous New Year.”

“Ready to make your borrowers’ dreams of homeownership a reality? Kind ‘s blended FICO (conventional representative score) loan options can help make it happen! With this option, your borrowers have a greater chance of final approval for a home loan based on their average combined score. Kind has the tools & resources to help you get the job done fast and easy! Using the Kwik Pricer in our broker platform, Kwikie – built with brokers in mind, you’ll be able to knock out deals hassle-free! Learn more by connecting with your Kind Account Executive. If you’re not yet a partner with us, join the #kindmovement today by submitting your broker inquiry.”

Disaster Updates and Other Industry News

On December 13, 2023, with DR-4751-TN, the Federal Emergency Management Agency (FEMA) declared that federal disaster aid with individual assistance has been made available to four Tennessee counties; Davidson, Dickson, Montgomery and Sumner to supplement recovery efforts in the areas affected by severe storms and tornadoes on December 9, 2023.

On 12/13/2023, with DR-4751, FEMA declared federal disaster aid with individual assistance has been made available to counties affected by severe storms and tornadoes on 12/9/2023. See AmeriHome Mortgage Disaster Announcement 20231205-CL for inspection requirements.

Hometown Equity Mortgage is offering G-PA 525 Fast closings 21-30 days, 5-25 units can be mixed use, Mixed use is viable with 70 percent residential, no prepay, I/O 12/24, Up to 75 percent LTV.

Create opportunities with ITIN borrowers in the new year. If you’re not sure how, reach out to the Champs of Non-QM. Champions Funding is steadfast in its mission to help you and your borrowers access loan products outside of traditional agency options. Don’t miss out on learning all the CDFI benefits too! Not yet partnered with the Champs? Sign up today!

loanDepot, Inc. a leading provider of home lending solutions that enable customers to achieve the dream of home ownership, unveiled its fully automated melloNow underwriting engine, changing the game for mortgage borrowers by delivering a fully conditional loan approval in minutes rather than hours or days. Utilizing a fully digital verification process, melloNow swiftly analyzes credit reports, detects fraud, and validates income and employment data at the point of sale, instantaneously generating unique borrower conditions. Now, with the melloNow digital underwriting engine, many loanDepot customers will enjoy a dramatically improved experience.

Newfi Wholesale announced its partnership with the popular technology solution, ARIVE to bring its full suite of Non-QM products to loan officers and brokers. With this partnership, ARIVE is now expanding its capabilities to include DSCR loans. This illustrates the industry-wide shift towards the growing Non-QM sector. Specializing in alternative lending products, Newfi has led the way with innovative solutions relevant for today’s markets. This strategic partnership will empower mortgage brokers with a one-stop shop mortgage experience to a wide array of niche loan programs. Newfi approved brokers will gain immediate access to Newfi’s diverse product lineup and competitive pricing in seamless technological experience, with deeper integrations in development and are set to be unveiled soon, further enriching our shared platform’s capabilities. Brokers interested in working with Newfi can sign up here.

Effective for FHA case number assignments on or after January 1, 2024, AmeriHome’s 2024 Loan Limit Pricing will be available. For additional information including updates on VA loan limits, see AmeriHome Mortgage announcement 20231207-CL for details.

For Mortgage Loans converted from interim construction financing to a permanent loan with a modification, the Loan Modification Agreement required to be included in the Collateral Package may be a certified copy with the original document treated as a Trailing Document. View AmeriHome Mortgage Product Announcement 20231206-CL for details.

VA announced an update to VA Lenders Handbook Chapter 4 Topic 7, Subsection b on Collection Accounts. See AmeriHome Mortgage announcement 20231204-CL for details.

Jet Mortgage is offering a new FHA DPA, 100 percent LTV FHA with New Improved Pricing. Jet 200 FHA DPA Highlights include 600 Min FICO, 1 Unit, Condo’s, Townhomes, Repayable & Forgivable Option, Max 2 percent BPC/LPC – Max 2 percent Discount Points. Must be DU Approve/Eligible, no Manual Underwrites allowed. Contact Jet Mortgage for more information.

VA has issued Circular 26-23-26 regarding the impact of 2024 Conforming Loan Limits on VA loans. Contact Kind Lending with questions about impacts to VA loans regarding changes to conforming loan limits for 2024

Capital Markets

Bonds enjoyed another winning session yesterday on the back of some market-friendly inflation data for November out of the United Kingdom, geopolitical angst tied to a potential military response to Houthi rebels disrupting shipping activity in the Red Sea, slowdown worries linked to disappointing forward revenue guidance from economic bellwether FedEx, and some safe-haven positioning before the extended Christmas weekend. The market largely overlooked some stronger-than-expected existing home sales activity in November, a nice pickup in consumer confidence in December, and a weak 20-year bond reopening auction.

In housing/real-estate news, Existing Home sales rose 0.8 percent month-over-month in November to a seasonally adjusted annual rate of 3.82 million, ending a five-month decline. Despite the rise, sales still sit 7.3 percent lower than a year ago largely due to mortgage rates spiking in September and October. Sales of existing homes continue to be hindered by high mortgage rates, high selling prices, and limited inventory. Inventory remains light, with only 3.5 months’ worth at the current pace. Fortunately, the recent drop in mortgage rates is expected to be a driver of stronger sales activity in December. The median home price rose 4 percent year-over-year to $387,600, while the first-time homebuyer share rose to 31 percent from 28 percent from the month prior.

As previously mentioned, this week contains a lot of housing data. After learning Tuesday of a substantial pick-up in residential activity recently, it would appear that home builders are becoming more optimistic as mortgage rates trend lower and economic growth remains resilient. Speaking of optimism, we also learned yesterday that the Conference Board’s Consumer Confidence Index increased in December as there was renewed optimism across all ages and household income levels with attention being paid to improved inflation trends, business conditions, and job availability. Consumer confidence is highly influenced by gasoline prices, which have been falling.

There will be little data of importance on the economic front until we get into the new year, though we do have a busy economic calendar today that is underway with the third look at Q3 GDP (4.9 percent, revised slightly downward). We’ve also received weekly jobless claims (205k, up from 202k) and Philadelphia Fed manufacturing (-10.5, much lower than expected). The core PCE deflator was expected to be unchanged at 2.3 percent. Later today brings leading indicators for November, KC Fed manufacturing for December, Treasury announcing next week’s laundry list of supply including 2-, 5- and 7-year notes before auctioning $20 billion reopened 5-year TIPS, and Freddie Mac’s Primary Mortgage Market Survey with the prior week’s 30-year mortgage rate slipping eight basis points to 6.95 percent. We begin the day with Agency MBS prices unchanged from Wednesday night, the 10-year yielding 3.87 after closing yesterday at 3.88 percent, and the 2-year at 4.36. With yesterday’s gains, the 10-year note yield returned to unchanged for 2023 after hitting 5.02 percent intraday in the middle of October.

Employment

“Logan Finance bucks mortgage industry trends with strong Q4 growth! As the year-end fast approaches, Logan Finance finds itself in a thriving environment sparking growth that has more than doubled over the last two years. “There’s a great need for Non-QM lending and we are positioned well to handle the influx of new business,” says Aaron Samples, Logan’s Chief Revenue Officer. TPO partners, if you missed the year-end pricing special announcement, see our LinkedIn profile at Logan Finance Corporation. Mortgage broker clients can get rate discounts of up to .375 on select loan products through the end of December, so bring your deals to Logan! Logan’s growth is also fueling several new hires including Wholesale and Correspondent industry veterans Nick Pabarcus and Dave Weatherford, who will focus on recruiting and growing our network. And speaking of hiring, we’re looking for Non-QM superstar AE’s, so contact Aaron Samples for hiring information. Learn more about Logan’s growth at Loganwholesale.com and Logancorrespondent.com.”

Happy Holidays from PrimeLending! Looking back at 2023, are you wrapping up the year feeling more confident of where your career is headed than when you started? Did you receive the coaching and support needed to strengthen critical skills, harness cutting-edge tools, and propel yourself to new heights? As you gear up for 2024, why settle for treading water? Take charge and position yourself to thrive at PrimeLending. Our LOs are transforming their professional journeys through One More, our exclusive peer-to-peer coaching program. Designed to empower producers to excel in today’s volatile market, One More offers a dynamic, fast-paced, and results-oriented small group support system where LOs can connect, collaborate, and ultimately surpass their goals. We’d love to talk with you about how we can help you flourish more too. Contact Nic Hartke for more information.

A Greater Town has built a robust real estate portal into its national hyperlocal marketing site and is looking for one mortgage lender (or a few select mortgage lenders) to “own” it, similar to having your own Zillow or Rocket Homes. About 600 MLS associations are represented with over 1,100,000 listings & 750,000 real estate agents & brokers. A comprehensive directory of every mortgage lender & MLO in the country is in construction as well. It’s the ideal environment for a national lender to set up shop. Examples include Editors Picks, Sally Forster Jones, Founder & CEO of the Sally Forster Jones Group at Compass, and Jerry & Lisa String, Listing & Buyer Agents at Realty ONE Group DocksideSouth. For further information, please contact Drew Knapp, CEO of A Greater Town, (973-477-7154).

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

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Collectively, Americans carry trillions in household debt. And the biggest single element of that burden by far is mortgage debt: It comprises close to $12 trillion of the $17.29 trillion overall.

Latest statistics on average mortgage debt

Mortgage

  • The average mortgage debt balance per household is $241,815 as of Q2 2023, a 4% increase from 2022.

  • The total mortgage debt balance in the U.S. is $12.14 trillion as of Q3 2023, an increase of $126 billion over the previous quarter.

  • The average mortgage balance exceeds $1 million in 26 U.S. cities, primarily on the East and West Coasts.

  • Mortgage originations collectively total $386 billion, as of Q3 2023, well below the trillion-dollar levels in 2020-21.

  • Total home equity line of credit debt equals $349 billion as of Q3 2023, more than a $25 billion year-over-year increase.

  • The average credit score for purchase mortgage holders is 733 as of November 2023.

  • The total debt service to income ratio (DTI) of U.S. households is projected to rise to 11.7% by 2025, up from  9.9% in 2022. The mortgage DTI alone will increase to 4.5%.

  • Total U.S. household debt is $17.29 trillion as of Q3 2023, an increase of $3.1 trillion since the end of 2019.

Annual average mortgage debt

Mortgage debt is the heavyweight when it comes to household debt, dwarfing credit card balances, student loans and auto loans. After the tough blow dealt by the 2007-08 subprime mortgage crisis, the annual average mortgage debt declined sharply. However, since 2013, the pendulum began to swing back, with mortgage debt on a steady rise. Since the pandemic, increases in home prices and in interest rates kicked the climb into overdrive.

So, what does this mean for the annual average American mortgage debt in 2024? With housing inventory still tight, interest rates still elevated, and people seeking larger homes to accommodate their evolving lifestyles, mortgage balances will likely continue to grow, though perhaps at a slower pace.

Most common types of debt

Mortgages continue to be a significant portion of household debt in the United States, with a current total of $12.14 trillion owed on 84 million mortgages. This equates to an average American mortgage debt of $144,593 per person listed with a mortgage on their credit report. Despite interest rates hovering above 7 percent, mortgage demand remains strong, driven by two key factors: an increase in the number of people seeking mortgages, and larger mortgages at that.

The record-low mortgage interest rates of recent years allowed buyers to purchase higher-priced homes or refinance their existing mortgages while maintaining low monthly payments. This has led to a rise in outstanding mortgage debt, which currently accounts for 70.2 percent of consumer debt in the U.S., according to New York Federal Reserve figures.

Here’s a look at the other common types of debt among American households, based on credit reporting company Experian’s midyear consumer debt review:

  • Auto loans. In the year between Q2 2022 and Q2 2023, auto loan debt witnessed a 5.8 percent increase, rising from $1.42 trillion to $1.5 trillion. This rising trend in auto loan debt can be attributed to persistent inventory shortages, escalating prices for new and used vehicles, and supplementary expenses such as auto insurance.

  • Credit card debt. Between Q2 2022 and Q2 2023, credit card debt surged by 16.3 percent, amounting to a total of $1.02 trillion. This increase is largely attributed to factors such as inflation and increasing credit card interest APRs. In a similar vein, unsecured personal loans also saw a 21.3 percent growth spurt, moving from $156.1 billion in 2022 to $189.4 billion in 2023.

  • Home equity lines of credit (HELOCs). As of Q2 2023, HELOCs have seen an 8.5 percent increase compared to the same quarter in 2022, reaching a total of $322 billion. This growth can be attributed to several factors. Firstly, the ongoing rise in home prices has increased homeowners’ equity, making it easier for them to tap into their home’s value through HELOCs. Additionally, the current high interest rate environment has made borrowing against home equity more attractive than refinancing a mortgage or taking out other types of loans.

  • Student loan debt balances. Student loan debt has long been a significant player in U.S. household debt. However, an 8 percent decrease occurred between Q2 2022 and Q2 2023, with loan balances falling from $1.51 trillion to $1.39 trillion. Influential factors behind this decline include the moratorium on interest on student loans, borrowers making payments during the three-year payment pause that concluded this year, and loan forgiveness initiatives introduced by the Department of Education.

Average mortgage debt by generation

Americans generally begin taking on debt as young adults, taper off their pace of borrowing in middle age and work to pay off loans near or during retirement.

Generation

Average mortgage debt

Generation Z

$229,897

Millennials

$295,689

Generation X

$277,153

Baby boomers

$190,441

Silent Generation

$141,148

Source: Experian

For each generation, this trend has taken place in tandem with mortgage rate fluctuations and home price appreciation, which has accelerated dramatically in recent years. In February 2012, the median existing-home price was $155,600, according to the National Association of Realtors. By the same time in 2017, the median was $228,200. As of November 2023, the median home price was $387,600.

States with the highest and lowest mortgage debt

These states had the highest average outstanding mortgage balance per borrower as of the end of 2022, according to Experian:

  1. District of Columbia – $492,745

  2. California – $422,909

  3. Hawaii – $387,277

  4. Washington – $331,658

  5. Colorado – $319,981

In these states, borrowers are much closer to paying off their home loans:

  1. West Virginia – $124,445

  2. Mississippi – $139,046

  3. Ohio – $139,618

  4. Indiana – $141,238

  5. Kentucky – $144,222

How mortgage debt compares to other household debt

In comparison to other types of household debt, mortgage debt often tends to take the lion’s share — largely due to the substantial cost of real estate (a home is likely to be the single biggest asset an individual ever purchases). While mortgage debt tends to be sizable, it is spread over a lengthy period, usually over a term of 15 to 30 years. This mitigates its impact on a household’s monthly budget, especially when compared to high-interest, short-term debt like credit card balances.

That longevity works to borrowers’ advantage in another way: Lenders often view mortgage-holders favorably for their demonstrated ability to manage large, long-term financial commitments. In fact, in contrast to other obligations, a mortgage is often viewed in a positive light by creditors, because — unlike with personal loans or credit card bills — your payment acts as an investment in an appreciating asset. Each monthly installment you pay reduces the principal owed on your house, increasing your stake in the property over time. This home equity can later be leveraged for financial liquidity or for securing lower-interest loans — or just held onto, enhancing your net worth and those of your descendants.

In short, a mortgage is considered “good debt,” due to its role in building equity, growing wealth and demonstrating creditworthiness.

Source: finance.yahoo.com

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Portland just might be the perfect place for you.

The current state of the housing and rental markets in Portland, Oregon, reflects a mix of trends, with varying dynamics across different areas and types of housing. From high-cost suburbs to affordable enclaves, this comprehensive guide covers everything you need to know to buy or rent in Portland with confidence.

Housing market in Portland

The Portland housing market is somewhat competitive, with an average house price of $500,000 as of October 2023. This represents a decrease of 4.9% compared to the previous year. Homes in Portland typically sell after 20 days on the market.

  • Downtown Portland: In Downtown Portland, the housing market has seen a significant decline. Home prices in July 2023 were down 16.7% year-over-year, selling at a median price of $290,000. Homes in this area were on the market for an average of 40 days.
  • Multnomah County: Contrasting the general trend in Portland, Multnomah County experienced a 1.0% increase in home prices year-over-year as of September 2023, with the median price at $505,000. Homes in this county sold after an average of 22 days on the market.
  • Pearl District: In the Pearl District, home prices in 2023 were down 6.2% from the previous year, with a median price of $507,000. The average selling time for homes in this area was notably longer at 106 days.
  • South Portland: Experiencing a dramatic decline, South Portland’s home prices dropped 21% to a median of $415,000, with homes taking an average of 47 days to sell.
  • Northeast Portland: Homes in Northeast Portland sell in about seven days, but the median sale price fell by 11.3% to $635,000. The price per square foot also saw a slight decrease.
  • East Portland: In July 2023, the median home price in East Portland was down 3.0% to $430,000, with homes selling in about nine days.
  • Northwest Portland: The Northwest Portland market is less competitive, with homes taking around 40 days to sell and the median sale price dropping 12.0% to $488,000
  • Overlook: The median sale price in Overlook experienced a significant decrease of 24.8% to $459,000. The price per square foot decreased as well.
  • North Portland: Homes in North Portland receive three offers on average and sell in about eight and a half days. The median sale price decreased by 8.1% to $485,000.
  • Homestead: The Homestead market is very competitive, with a notable decrease in the average house price by 52.3% to $406,000.

Rental market in Portland

  • Average rent prices: The average rent for apartments in Portland ranges from $1,217 for a studio to $1,795 for a two-bedroom apartment.
  • Year-over-year trends: Oregon, including Portland, experienced a significant 9.32% year-over-year price decline in rents.
  • Rental price peaks and declines: After peaking at $2,053 in August 2022, rents declined to $1,937 in February 2023, a change of -5.65%. However, they rose again by more than 5% since February.
  • National context: Nationally, the median rent price dropped to $2,029 by July 2023, which is 1.17% less than the peak in August 2022.
  • Recent trends: In October 2023, rent levels dropped for the first time in six months, indicating an encouraging monthly decrease.
  • Longer-term trends: Over two years, rents have increased by 18.41%, showing a longer-term upward trend despite recent fluctuations.

Market analysis

  • Neighborhood trends: Each neighborhood in Portland has its characteristics and trends, with some areas like Homestead showing price increases, while most others experience declines. This diversity suggests that local factors heavily influence housing prices.
  • Rental market fluctuations: The rental market in Portland has experienced significant fluctuations over the past year, with a general trend towards decreasing prices. This could be indicative of market corrections and adjustments to the post-pandemic world.
  • Comparative market dynamics: The contrast between the housing and rental markets in Portland highlights the complexity of real estate dynamics. While the housing market shows moderate competitiveness with varying neighborhood trends, the rental market is adjusting with more pronounced price decreases.

Portland’s perfect for you

The housing and rental markets in Portland present a complex picture with distinct trends based on location and property type. The data suggests a period of adjustment and variability, likely influenced by broader economic factors and local market conditions.

Ready to settle down in Portland? You’ve come to the right place to locate your perfect home or apartment for rent.

Source: rent.com

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The Bright MLS 2024 National Housing Market Outlook predicts that next year will bring better conditions for homebuyers. Despite the challenges posed by affordability, buyers can expect a slowdown in home price growth, lower mortgage rates, and an increase in housing options. This shift will occur as life events prompt current homeowners to enter the market, providing more opportunities for prospective buyers.

The Bright MLS 2024 National Housing Market Outlook forecast signals several critical developments for buyers and sellers:

  1. Mortgage rates will establish a new standard, dipping below 7% in the initial quarter and fluctuating between 6-6.5% before landing at 6.2% by year-end.
  2. The year’s conclusion will witness existing home sales reaching 4.6 million, marking a 12.1% surge from the historically low figures in 2023, albeit beneath the standard home sales volume in a typical year.
  3. Evolving family and financial circumstances will increase the number of sellers entering the market, resulting in a 7.6% upturn in inventory by the culmination of 2024.
  4. The augmented inventory and heightened buyer activity will likely maintain home prices steady, as the median home price in the U.S. will ascend by a mere 1.5% to $394,200.
  5. Escalating affordability hurdles and an upsurge in the availability of new homes will steer home prices downward in certain markets, primarily concentrated in California and Florida.
The 30-year mortgage rate is expected to drop below 7% in the first quarter of 2024, continuing to decrease to 6.2% by the end of the year. (Bright MLS)

More Home Sales in 2024

Home sales will increase next year, following a prolonged period of subdued activity. In 2023, the housing market experienced a notable decline in home sales, reaching the lowest level since 2008 because of limited inventory, heightened mortgage rates, and soaring home prices, which dampened demand, particularly in the latter part of the year.

Nevertheless, there remains substantial pent-up demand for homeownership, particularly among younger households, whose homeownership rate still lags because of previous generations. Lower rates and increased inventory will drive the anticipated influx of buyers in 2024. However, affordability will remain a significant challenge, potentially deterring some prospective buyers from entering the market in 2024.

Stable Home Prices

The housing market will likely experience relatively stable home prices in 2024, with a modest 1.5% increase in the median home price in the U.S. compared to 2023. Factors like inventory offset by a rise in the number of buyers in the market will drive the projected growth in home prices.

Overall, the median home price in the U.S. will grow modestly, rising to $394,200 in 2024, a 1.5% increase over 2023.

Affordability Remains a Challenge

In 2024, the U.S. housing market will not experience widespread price corrections. However, certain local markets have seen rapid price increases, posing affordability challenges for potential buyers. Additionally, some metropolitan areas have witnessed a surge in new construction activity. 

This surge and decreased affordability may lead to price declines in particular markets nationwide. Based on an analysis of price growth, affordability, and construction trends, 10 of the 50 largest metro areas are forecasted to have lower median prices in 2024 compared to 2023. Notably, California and Florida dominate the list of regions with forecasted price declines, although no market is anticipated to experience a double-digit price drop next year.

2024 National Housing Market Outlook by Bright MLS

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Mihaela Lica Butler is senior partner at Pamil Visions PR. She is a widely cited authority on public relations issues, with an experience of over 25 years in online PR, marketing, and SEO.She covers startups, online marketing, social media, SEO, and other topics of interest for Realty Biz News.

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Source: realtybiznews.com