Whether you’re looking for a classic, or an exotic new taste, Idle Hands will surely deliver. Partner and cofounder, Matt Wolski is passionate about finding and sharing the best cocktails from the Caribbean, Latin America and beyond. Idle hands is also known for their rooftop patio where you can enjoy live music while you drink, eat and escape from the hustle and bustle of Houston city life.
The MOVEMETOTX Team is a real estate team serving the Greater Houston area. We assist buyers, sellers, renters, and investors to achieve their real estate goals throughout Houston. To discuss your real estate goals, give us a call today!
Whether you’re looking for a classic, or an exotic new taste, Idle Hands will surely deliver. Partner and cofounder, Matt Wolski is passionate about finding and sharing the best cocktails from the Caribbean, Latin America and beyond. Idle hands is also known for their rooftop patio where you can enjoy live music while you drink, eat and escape from the hustle and bustle of Houston city life.
The MOVEMETOTX Team is a real estate team serving the Greater Houston area. We assist buyers, sellers, renters, and investors to achieve their real estate goals throughout Houston. To discuss your real estate goals, give us a call today!
If you’re following along with the news today, you’re probably hearing a lot about record-breaking home prices, rising consumer costs, supply chain constraints, and more. And if you’re thinking about purchasing a home this year, all of these inflationary concerns are likely making you wonder if you should wait to buy. Investopediaexplains that during a period of high inflation, prices rise across the board. And while home prices aren’t immune from this increase, here’s why inflation shouldn’t stop you from buying a home in 2022.
Homeownership Offers Stability and Security
Home prices have been increasing for quite some time, and experts say they’re going to continue to climb throughout 2022. So, as a buyer, how can you protect yourself from rising costs for things like food, shelter, entertainment, and other goods and services? The answer lies in housing.
Buying a home allows you to lock in your monthly mortgage payment for the foreseeable future. That means as other prices rise, your monthly payment will be consistent thanks to your fixed-rate mortgage. This gives you the peace of mind that the bulk of your housing costs is shielded from inflation.
James Royal, Senior Wealth Management Reporter at Bankrate,says:
“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”
If you rent, you don’t have that same benefit and you won’t be protected from rising housing costs. As an added incentive to buy, consider that today’s mortgage interest rates are lower than they have been in decades. While inflation decreases what your dollars can buy, low mortgage rates help counteract it by boosting your purchasing power so you can get more home for your money. They also help keep your monthly payments down. This is especially important during an inflationary period because you’ll want to protect yourself from the impact of inflation as much as possible.
“If you have cash and are expecting inflation, you want to think through where you can put your money so it does not lose value. Housing is commonly looked at as a good inflation hedge, especially with interest rates so low.”
Bottom Line
The best hedge against inflation is a fixed housing cost. That’s why you shouldn’t let it stop you from buying a home this year. Not sure where to start? Let’s connect so you have expert advice and help throughout every step of the homebuying process.
When mortgage forbearance plans were first announced and the pandemic surged through the country in early 2020, many homeowners were allowed to pause their mortgage payments. Some analysts were concerned that once the forbearance program ended, the housing market would experience a wave of foreclosures like what happened after the housing bubble 15 years ago.
Here’s a look at why that isn’t the case.
1. There Are Fewer Homeowners in Trouble This Time
After the last housing crash, over nine million households lost their homes to a foreclosure, short sale, or because they gave it back to the bank. Many believed millions of homeowners would face the same fate again this time.
However, today’s data shows that most homeowners exited their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The latest data from the Mortgage Bankers Association (MBA) studies how people exited the forbearance program from June 2020 to November 2021.
Here are those findings:
38.6% left the program paid in full
19.9% made their monthly payments during the forbearance period
16.8% left the program still in trouble and without a loss mitigation plan in place
2. Those Left in the Program Can Still Negotiate a Repayment Plan
As of last Friday, the total number of mortgages still in forbearance stood at 890,000. Those who remain in forbearance still have the chance to work out a suitable plan with the servicing company that represents their lender. And the servicing companies are under pressure to do just that by both federal and state agencies.
Rick Sharga, Executive Vice President at RealtyTrac, says in a recent tweet:
“The [Consumer Financial Protection Bureau] and state [Attorneys General] look like they’re adopting a ‘zero tolerance’ approach to mortgage servicing enforcement. Likely that this will limit #foreclosure activity for a good part of 2022, while servicers explore all possible loss [mitigation] options.”
For more information, read the warning issued by the Attorney General of New York State.
3. Most Homeowners Have More Than Enough Equity To Sell Their Homes
For those who can’t negotiate a solution and the 16.8% who left the forbearance program without a work-out, many will have enough equity to sell their homes and leave the closing with cash instead of facing foreclosures.
Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home. As Frank Martell, President & CEO of CoreLogic,explains:
“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”
4. There Have Been Far Fewer Foreclosures Over the Last Two Years
One of the seldom-reported benefits of the forbearance program was that it allowed households experiencing financial difficulties prior to the pandemic to enter the program. It gave those homeowners an extra two years to get their finances in order and work out a plan with their lender. That prevented over 400,000 foreclosures that normally would have come to the market had the new forbearance program not been available. Otherwise, the real estate market would have had to absorb those foreclosures. Here’s a graph depicting this data:
5. The Current Market Can Easily Absorb Over a Million New Listings
When foreclosures hit the market in 2008, they added to the oversupply of houses that were already for sale. That resulted in over a nine-month supply of listings, and anything over a six-month supply can cause prices to depreciate.
It’s exactly the opposite today. The latest Existing Home Sales Report from the National Association of Realtors (NAR) reveals:
“Total housing inventory at the end of November amounted to 1.11 million units, down 9.8% from October and down 13.3% from one year ago (1.28 million). Unsold inventory sits at a 2.1-month supply at the current sales pace, a decline from both the prior month and from one year ago.”
A balanced market would have approximately a six-month supply of inventory. At 2.1 months, the market is severely understocked. Even if one million homes enter the market, there still won’t be enough inventory to meet the current demand.
Bottom Line
The end of the forbearance plan will not cause any upheaval in the housing market. Sharga puts it best:
“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect. . . .”
With collections that are always on the cutting edge, Nollege is the next big thing in streetwear! Nollege offers a lineup of highly coveted clothing and merchandise ranging from vintage, contemporary, to high fashion. Join us as we meet with Edgar Ventura and Eugene Valle, owners of Nollege located in the Heights, Houston.
The MOVEMETOTX Team is a real estate team serving the Greater Houston area. We assist buyers, sellers, renters, and investors to achieve their real estate goals throughout Houston. To discuss your real estate goals, give us a call today!
With collections that are always on the cutting edge, Nollege is the next big thing in streetwear! Nollege offers a lineup of highly coveted clothing and merchandise ranging from vintage, contemporary, to high fashion. Join us as we meet with Edgar Ventura and Eugene Valle, owners of Nollege located in the Heights, Houston.
The MOVEMETOTX Team is a real estate team serving the Greater Houston area. We assist buyers, sellers, renters, and investors to achieve their real estate goals throughout Houston. To discuss your real estate goals, give us a call today!
As we enter in to a new year, I break down my predictions for the 2022 housing market here in Houston, and what that means for YOU if you’re looking to buy or sell in 2022.
The MOVEMETOTX Team is a real estate team serving the Greater Houston area. We assist buyers, sellers, renters, and investors to achieve their real estate goals throughout Houston. To discuss your real estate goals, give us a call today!
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