Home Loans Aren’t What They Were

Home Loans Aren’t What They Were. The question is Why? Let’s talk about that.

In today’s housing market, many are beginning to wonder if we’re returning to the riskier lending habits and borrowing options that led to the housing crash 15 years ago. Let’s ease those concerns. Let’s Talk! Contact us Today.

Home Loans Now Aren’t What They Were in the Past
Homes in Bartlett Tennessee

Several times a year, the Mortgage Bankers Association (MBA) releases an index titled the Mortgage Credit Availability Index (MCAI). According to their website:

“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is . . . a summary measure which indicates the availability of mortgage credit at a point in time.”

Basically, the index determines how easy it is to get a mortgage. The higher the index, the more available mortgage credit becomes. Here’s a graph of the MCAI dating back to 2004, when the data first became available:

Lending standards are under Control.

As the graph shows, the index stood at about 400 in 2004. Mortgage credit became more available as the housing market heated up, and then the index passed 850 in 2006. When the real estate market crashed, so did the MCAI as mortgage money became almost impossible to secure. Thankfully, lending standards have eased since then, but the index is still low. In April, the index was at 121, which is about one-seventh of what it was in 2006.

Why Did the Index Get out of Control During the Housing Bubble?

The main reason was the availability of loans with extremely weak lending standards. To keep up with demand in 2006, many mortgage lenders offered loans that put little emphasis on the eligibility of the borrower. Lenders were approving loans without always going through a verification process to confirm if the borrower would likely be able to repay the loan. Bottom line, some buyers should not have qualified to borrow. Here’s our reviews from Google and Zillow.

An example of the relaxed lending standards leading up to the housing crash is the FICO® credit score. What’s a FICO® score? The website myFICO explains:

“A credit score tells lenders about your creditworthiness (how likely you are to pay back a loan based on your credit history). It is calculated using the information in your credit reports. FICO® Scores are the standard for credit scores—used by 90% of top lenders.”

During the housing boom many mortgages were written for borrowers with a FICO score under 620. While there are still some loan programs that allow for a 620 score, today’s lending standards are much tighter. Lending institutions overall are much more attentive about measuring risk when approving loans. According to the latest Household Debt and Credit Report from the New York Federal Reserve, the median credit score on all mortgage loans originated in the first quarter of 2022 was 776.

The graph below shows the billions of dollars in mortgage money given annually to borrowers with a credit score under 620.

Why Home Loans Today Aren’t What They Were in the Past

In 2006, buyers with a score under 620 received $376 billion dollars in loans. In 2021, that number was only $80 billion, and it’s only $20 billion in the first quarter of 2022.

Home Loans Aren’t What They Were

In 2006, lending standards were more relaxed with little evaluation to measure a borrower’s potential to repay their loan. Today, standards are tighter. And risk of default is reduced for both lenders and borrowers. These are two very different housing markets. Today loans are still available though credit scores need to be higher.

Don’t Let Inflation Delay Your Home Buying Plans

Don’t Let Inflation Delay Your Home Buying Plans. In time like these, one wonders if buying a home now is the right time. Or is six months or next year a better time. Keep in mind rising home prices may offset you down payment savings and interests may not fall

If recent headlines about rising inflation are making you wonder if it’s still a good time to buy, here’s what experts have to say.

Housing is an asset that typically grows in value. Plus, your mortgage helps stabilize your monthly housing costs, and buying protects you from rising rents.

Experts say owning a home is historically a good hedge against inflation. Let’s connect if you’re ready to start the homebuying process today. Questioning if this is a good time or not, Contact Us

Don’t Let Rising Inflation Delay Your Homeownership Plans Here's Why.

Don’t Let Inflation Delay Your Home Buying Plans. Whether you are selling a home, buying a home or moving to Memphis, we are available to meet in person or by video. So begin by setting an appointment today.

We have over 30 plus years of experience in residential real estate. We have the experience helping sellers, buyers and families relocating and can help you too. If we can’t help you, we will honestly let you know. Let’s Talk! 901 799 0299.

One Thing Every Homeowner Needs To Know

One Thing Every Homeowner Needs To Know. A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value.

The One Thing Every Homeowner Needs To Know About a Recession

The National Bureau of Economic Research (NBER) defines a recession this way:

“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”

To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate. Learn more about us

Recession doesn't equal a housing crisis

The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.

One Thing Every Homeowner Needs To Know Bottom Line

We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis. Let’s talk today about the current housing market. Contact us

Homeownership Can Bring You Joy

Homeownership Can Bring You Joy. If you’re trying to decide whether to rent or buy a home, you’re probably weighing a few different factors. The financial benefits of homeownership might be one of the reasons you want to make a purchase if you’re a renter, but the decision can also be motivated by having a place that’s uniquely your own. Read more of our blogs and get our Seller and Buyer Guides

Homeownership Can Bring You Joy

If you want to express yourself by upgrading and customizing your living space but are feeling held back by your rental agreement, it might be time to consider the perks of owning your home.

Homeownership Can Bring You Joy. A Little Change Can Bring Lots of Joy

There’s a significant level of pride that comes from owning a home. That’s because it’s a space that truly belongs to you.

A recent report from the National Association of Realtors (NAR) shows making updates or remodeling your home can help you feel more at ease and comfortable in your living space. NAR measures this with a Joy Score that indicates how much happiness specific home upgrades bring. According to NAR:

“There were numerous interior projects that received a perfect Joy Score of 10: paint entire interior of home, paint one room of home, add a new home office, hardwood flooring refinish, new wood flooring, closet renovation, insulation upgrade, and attic conversion to living area.”

The report also breaks down just how much each of these projects can enhance your emotional attachment to your home, even leading you to want to spend even more time in the space (see graph below):

How Homeownership Can Bring You Joy | MyKCM

And while many of the items NAR highlights are larger tasks, some, like painting rooms, are much smaller. Even those quicker projects can still bring you a greater sense of joy and accomplishment. Not to mention when you make upgrades in your home, you could be increasing its value which also gives your net worth a boost if you invest your time and effort wisely.

You’re Free To Update Your Home to Your Heart’s Content

These types of updates can result in additional happiness when you complete them, but there’s another reason you can feel good as a homeowner. In most situations, you’re free to renovate or update the interior of your home without needing additional permission. But as Business Insider points out, renters may not have the same freedom:

“Your landlord won’t always approve changes when you rent. But you have the power to update the home when you’re the owner. (Just make sure any big changes are approved by your homeowner’s association, if necessary.)”

If you do make changes as a renter, there’s a good chance you’ll need to revert them back at the end of your lease based on your rental agreement. That can add additional costs when you move out. That’s one major benefit of owning your own home. Unless there are specific homeowner’s association requirements, you typically won’t have to worry about the changes you can and can’t make.

Bottom Line

Deciding whether to rent or buy is a personal decision. The financial benefits are critical, but don’t overlook the emotional impact homeownership can have. Let’s connect to discuss all the benefits you can enjoy when you purchase your own home. Contact us Today

Rising Mortgage Rates Push Buyers off the Fence

If you’re thinking about buying a home, you’ve probably heard mortgage rates are rising and have wondered what that means for you. Since mortgage rates have increased over two percentage points this year, it’s natural to think about how this will impact your homeownership plans. So, Rising Mortgage Rates Push Buyers off the Fence. in just one of our blogs. Read them all HERE

Midtown Memphis Tennessee Home

Today, buyers are reacting in one of two ways: they’re either making the decision to buy now before rates climb higher or they’re waiting it out in hopes rates will fall. Let’s look at some context that can help you understand why so many buyers are jumping off the fence and into action rather than waiting to buy.

A Look Back: How the Current Mortgage Rate Compares to Historical Data

One factor that could help you make your decision to buy now is how today’s mortgage rates compare to historical data. While higher than the average 30-year fixed rate in recent years, the latest rates are still comparatively low when you look at the bigger picture of where rates have been since 1971 (see graph below):

Mortgage from 1971 to Today

Rising Mortgage Rates Push Buyers off the Fence.

Mark Fleming, Chief Economist at First American, explains it like this:

“. . . historical context is important. An average 30-year, fixed mortgage rate of 5.5 percent is still well below the historical average of nearly 8 percent.”

If you’re deciding whether to buy now or wait, this is important context to have. Today’s mortgage rate still gives you a window of opportunity to lock in a rate that’s comparatively lower than decades past.

A Look Ahead: What Happens if Rates Climb Further

The buyers who are springing into action now are also motivated to make their move because they know rates have risen steadily this year, and they’re eager to get ahead of any further increases.

Why? When mortgage rates climb, they impact the monthly mortgage payment you’ll have on the home you’re buying. Basically, it’ll likely cost you more to buy a home if you wait. Experts say mortgage rates will rise (although more moderately) in the months ahead. Odeta Kushi, Deputy Chief Economist at First American, explains:

“. . . ongoing inflationary pressure remains likely to push mortgage rates even higher in the months to come.”

So, if you’re ready and financially able to buy now, it may make more sense to get off the fence and make your purchase sooner rather than later. As Nadia Evangelou, Senior Economist at the National Association of Realtors (NAR), says:

“With even higher interest rates on the horizon, I don’t see any reason to hold off from purchasing a home right now. If you feel financially secure, you should start looking for a home.”

At the end of the day, there is no perfect advice on when to buy a home. What you should do depends on your goals, your finances, and your personal situation. Use this information with the help of local real estate professionals to make an informed decision on what’s best for you. The Mortgage Reports sums it up best:

“. . . if you’re on the fence about whether to buy now or wait for a better deal, buying sooner rather than later might be wise. That said, home buying is always a personal decision. Whether you should buy in 2022 depends on your financial situation and the local housing market where you live.”

Bottom Line

For many buyers, rising mortgage rates are motivating them to act now and make a purchase before rates rise higher. To decide what move is best for you, let’s connect so you have expert advice on your side. Contact us Today

Memphis Homeowners Sell with Leverage

Memphis homeowners can sell with Leverage in today’s housing market . Homeowners have a great opportunity to sell their house and receive the best terms for their personal situation. That’s because there’s a limited number of homes for sale, which is creating competition among buyers. Right now, homebuyers want three things:

If You’re a Homeowner, You Have Incredible Leverage When You Sell Today High Five

These buyer needs give you an amazing advantage – also known as leverage – when you sell.

What Does This Mean Memphis Homeowners Sell with Leverage

You might already realize this enables you to sell at a good price. You’re also in a great position to get the best terms to suit your needs.

According to the latest Realtors Confidence Index from the National Association of Realtors the average home sold is receiving 4.8 offers. That’s why there’s a good chance you’ll get offers from multiple buyers who are willing to compete for your house. When you do look closely at the terms of each offer to find out which one has the best options for you.

And if you have questions at any point in the process, remember your trusted real estate advisor can help. We’re experts who understand the fine print, know how to compare the terms of various offers, and will help you select the best one for your situation.

Memphis Homeowners Sell with Leverage Bottom Line

If you’re selling your home, buyer demand in today’s market gives you a great opportunity to get the best terms and price when you sell your house. Let’s connect today to discuss how much leverage you have as a seller in today’s market. We’d love to connect with you so give us a call at 901 799 0299 or just fill out the contact form here. Contact MB Realty

Update your Home before Selling?

Update your home before selling? Everyone asks that question. What’s the condition of your home? Why are you selling? What’s your ultimate goal? What’s your budget? How much do you expect to return on your expense? What’s the current market for upgraded homes? Is it neccesary? All questions MB Realty can help answer. Contact us today!

Should You Update Your House Before Selling? Ask MB Realty

Update your home before selling?

  • If you’re deciding whether you should make updates before you sell your house, lean on MB Realty to be your guide.
  • In today’s sellers’ market, buyers have limited options and may be more willing to take on repairs themselves.
  • If you’re thinking about selling your house, let’s connect so you have expert advice that’s customized to your home and our local area.

2022 Housing Market Forecast

2022 Housing Market Forecast [INFOGRAPHIC] | MyKCM

2022 Housing Market Forecast Some Highlights

Your Home is Ready to List or Close

Your House is Closer to List-Ready Than You Think.

Your Home is Ready to List! One of the biggest concerns for a homeowner looking to sell is the time they’ll have to put in before listing their house. If that’s you, you should know – your home might be closer to list-ready than you think in today’s housing market. A survey of recent sellers from realtor.com finds many were able to get their house ready in less than a month. It says:

Your House Could Be Closer to List-Ready Than You Think | MyKCM

“With many homeowners expecting a quick sale, and in many cases a lack of contingencies, the preparation process took less than a month for over 50% of home sellers this past year, with 20% completing it in less than two weeks.”

Those sellers expecting to sell quickly are following recent buyer trends. With mortgage rates and home prices rising, buyers in today’s market are serious about finding a home quickly. But with the limited number of homes for sale, there are very few options for those buyers to choose from. That means many may be willing to take on projects after they purchase. Let’sTalk so you can see what you need to do before listing your house today.

Because of this, you may be able to focus on less time-consuming tasks before putting your house on the market. According to the survey, some of the top things recent sellers completed before listing over the past year include landscaping, making minor cosmetic updates, and touching-up paint.

Your House Could Be Closer to List-Ready Than You Think | MyKCM

A Real Estate Advisor Will Help Streamline the Process and Keep You Focused

Of course, each situation is different, and knowing what repairs or updates your house needs to stand out in your local area is critical. That’s where a trusted real estate professional comes in. In a recent article, in NextAdvisor

“. . . Real estate can be hyper-local, and demand can vary from one neighborhood to the next. It’s a good idea to work with a local real estate professional to determine an ideal listing price and if any improvements or repairs need to be completed before putting your home on the market.”

Your trusted real estate advisor knows the ins and outs of the market in your specific area. They’ll help you identify the places where you should and shouldn’t spend your time and money and that can enable you to list quickly.

Bottom Line

If you’re ready to take advantage of the incredible conditions for sellers in today’s real estate market but worried about the time it’ll take to get your home ready, you might be closer than you think. Let’sTalk so you can see what you need to do before listing your house today.

Memphis HomeOwners Equity Grows

Memphis HomeOwners Equity Grows and more. If you’re in the market to buy a home this season, stick with it. Homebuyers in Memphis Tennessee and across the nation face challenges in any market. And today is no exception. But if you stick with it, your decision to purchase a home will be worth the effort. In fact, a recent survey from Bankrate shows homeownership is so powerful that:

“Nearly three in four homeowners say they would still buy their current home if they had it to do [sic] all over again.”

Dad reading to daughter in new home. Memphis Home Owners Equity Grows and more.

That means the results of owning a home and the benefits that come with it outweigh the effort needed to achieve their goal. If you’re a homebuyer, be confident knowing the work you put in today will pay off for years to come. Here are a few reasons to stick with your search and focus on the outcome. Let’s Talk to discuss everything homeownership has to offer.

Memphis HomeOwners Equity Grows and more

Memphis Homeownership Contributes Financial Well-Being. The National Association of Realtors lists several reasons to consider if you’re thinking about buying a home. One of the top financial reasons is the equity you build. As they say

“Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity . . . Building equity in your home is a ready-made savings plan.”

Your equity is a powerful tool you can leverage in a number of ways. homeowners are seeing record levels of equity today with the recent home price appreciation. That may be one reason why so many people view owning a home as a great investment and a top indicator of financial well-being. As the survey from Bankrate mentioned above shows:

“. . . Americans place a higher value on homeownership than on any other indicator of economic stability, . . .”

Owning a home ranks above other major accomplishments like retirement, having a successful career, and getting a college degree. That indicates just how impactful the financial benefits of homeownership truly are.

Emotional Benefits of Owning a Home Are Powerful

Memphis Home Owners Equity Grows and more. Of course, homeownership is more than an investment Among them is the opportunity to customize your home to reflect your personality and needs. As they say:

“The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.”

Another benefit homeowners enjoy is the stability it provides. Homeowners typically stay put longer than renters. When you remain in one place longer than a few years, you can grow closer to your community. And that can enhance your sense of pride and lead to better relationships.

The benefits of homeownership are powerful, as Leslie Rouda Smith, President of the realtors association, says:

“From building personal wealth and fostering communities, to strengthening social stability and driving the national economy, the value of homeownership is indisputable.”

Even if you face challenges in today’s market, the payoff when you succeed and purchase a home will be worth it.

Bottom Line

If you’re planning to buy a home this year, there are incredible benefits waiting for you at the end of your journey. Let’s Talk to discuss everything homeownership has to offer.