Median U.S. Home Price Hit an All-Time High of $434,000 in April

Like most of the country, Michigan experienced a red-hot real estate market during the pandemic as people reallocated funds to housing and took advantage of low interest rates. Now, with rates up, fewer people are selling their homes. That has reduced inventory but not prices, as buyers compete for fewer properties.\

The median U.S. home sale price rose 6.2% year over year in April to $433,558—the highest level on record, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Today’s housing market is much slower than it was during the pandemic homebuying boom, but prices continue climbing because there still aren’t enough homes to go around.

New listings increased 1.7% month over month in April on a seasonally adjusted basis and rose 10.8% year over year. Still, they were roughly 20% below pre-pandemic levels, in large part because many homeowners don’t want to sell, as they feel “locked in” by the low mortgage rate they scored during the pandemic.

It’s worth noting that last April, new listings were at the lowest level on record aside from the start of the pandemic, which is one reason they’re now posting such a large year-over-year gain.

Home sales were little changed from a month earlier (0.2%) in April on a seasonally adjusted basis but were down 1.4% from a year earlier.

Homebuyers are getting hit by the one-two punch of high prices and elevated mortgage rates. The average 30-year-fixed mortgage rate was 6.99% in April. That’s up from 6.82% in March and 6.34% in April 2023, and is more than double the all-time low of 2.65% during the pandemic.

“It’s not all bad news for homebuyers. Mortgage rates are already inching lower in response to this week’s inflation report, which signaled that the Fed may cut interest rates this summer—a possibility that just weeks ago many thought was off the table,” said Redfin Economics Research Lead Chen Zhao. “In certain parts of the country, buyers also have room to negotiate as homes linger on the market, prompting sellers to slash their asking prices and provide concessions.”

Housing Supply—While Historically Low—Hit a Four-Year High in April as Homes Lingered on the Market

Active listings rose to the highest level since December 2020 in April. They were up 0.3% from a month earlier and up 7.5% from a year earlier on a seasonally adjusted basis, though remained far below pre-pandemic levels.

While new listings represent the number of homes that were listed for sale during a given month, active listings represent the total number of homes that were for sale during a given month. That means that the latter metric includes homes that have been sitting on the market for a while.

Nationwide, 43.9% of homes that went under contract in April did so within two weeks of being listed, down from 46.9% a year earlier.

18% of Home Sellers Are Cutting Their Asking Prices

Nearly one in five (17.6%) homes for sale in April had a price cut, meaning the seller lowered the asking price after putting their home on the market. That’s up 5.6 percentage points from 12.1% a year earlier—the biggest gain in over a year.

“Most sellers in Las Vegas are willing to negotiate—anywhere from 5% to 10% off their list price,” said local Redfin Premier real estate agent Fernanda Kriese. “Sellers are offering buyers money for mortgage-rate buydowns, along with other concessions. Homes that are listed below market value get multiple offers and are snatched up in two to four days, but homes that are priced $5,000 to $10,000 over market value are sitting for 30 to 60 days longer.”

Las Vegas, like many pandemic boomtowns, has seen its housing market cool following the homebuying frenzy of 2021 and 2022.

But other markets haven’t cooled as quickly, and some are seeing substantial competition between homebuyers. In San Jose, CA, for example, three in four homes (75.8%) that sold in April went for more than their asking price. That’s up from 61.6% a year earlier and is the highest share among the metros Redfin analyzed. Next came Rochester, NY, at 72.8%, and Oakland, CA, at 69.7%. Nationwide, one-third (33.5%) of homes that sold in April went for more than their asking price.

Redfin recently surveyed its agents and found that the majority of respondents (74.4%) think the 2024 housing market is shaping up to be more favorable for sellers than buyers. That’s likely in part because sellers are fetching record-high prices for their homes. The survey, conducted by Qualtrics in April-May 2024, was fielded to roughly 300 Redfin Premier agents.

April 2024 Highlights: United States

	April 2024	Month-Over-Month Change	Year-Over-Year Change
Median sale price	$433,558	3.2%	6.2%
Homes sold, seasonally adjusted	425,102	0.2%	-1.4%
New listings, seasonally adjusted	522,713	1.7%	10.8%
All homes for sale, seasonally adjusted (active listings)	1,617,980	0.3%	7.5%
Months of supply	2.3	-0.2	0.1
Median days on market	35	-5	-2
Share of for-sale homes with a price drop	17.6%	1.9 ppts	5.6 ppts
Share of homes sold above final list price	33.5%	3.5 ppts	0.1 ppts
Average sale-to-final-list-price ratio	99.7%	0.4 ppts	0.2 ppts
Share of homes that went under contract within two weeks	43.9%	-1.4 ppts	-3 ppts
Average 30-year fixed mortgage rate	6.99%	0.17 ppts	0.65 ppts

Note: Data is subject to revision

Metro-Level Highlights: April 2024

Data in the bullets below came from a list of 85 U.S. metro areas with populations of at least 750,000. A full metro-level data table can be found in the “download” tab of the dashboard in the monthly section of the Redfin Data Center. Refer to Redfin’s metrics definition page for explanations of metrics used in this report. Metro-level data is not seasonally adjusted. All changes below represent year-over-year changes.

• Prices: Median sale prices rose most from a year earlier in Buffalo, NY (24.3%), Anaheim, CA (22.8%) and Rochester (15%). They fell in just five metros: San Antonio (-1.6%), Memphis, TN (-0.7%), Birmingham, AL (-0.7%), North Port, FL (-0.2%) and Austin, TX (-0.1%).
• New listings: New listings rose most in San Jose (46.9%), Tacoma, WA (38.3%) and Oakland (38%). They fell in one metro Redfin analyzed: Greensboro, NC (-1.6%).
• Active listings: Active listings rose most in Cape Coral, FL (50.6%), North Port (49.1%) and Fort Lauderdale, FL (42.2%). They fell most in Raleigh, NC (-12.3%), New Brunswick, NJ (-8.7%) and Lake County, IL (-7.4%).
• Closed home sales: Home sales rose most in San Jose (38.2%), San Francisco (30.4%) and Stockton, CA (23.2%). They fell most in Fresno, CA (-3.5%), Jacksonville, FL (-3%) and Albany, NY (-2.6%).
• Sold above list price: In San Jose, 75.8% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Rochester (72.8%) and Oakland (69.7%). The shares were lowest in North Port (6.8%) West Palm Beach, FL (7.1%) and Cape Coral (9.3%).
• Off market in two weeks: In Rochester, 84.6% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. Next came Seattle (75.9%) and Buffalo (74.5%). The lowest shares were in Honolulu (7.4%), Tucson, AZ (16.6%) and Chicago (16.9%).

To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-tracker-april-2024/

How to Save for a Down Payment While You’re Renting

 

Rent prices continue to rise throughout the U.S., which creates a disheartening and discouraging scenario for many people.

As of  January 1st, median rents for one- and two-bedroom units are up 13% and 16%, respectively, since 2019.

One-bedroom rentals are at an all-time median high right now.

High rental prices coincide with a housing market that’s overheated. Demand, inflation, and reductions in home construction have led to record-setting home prices. Potential homebuyers are being priced out, requiring them to stay in the rental market, putting pressure on rent prices.

For renters, it can seem like a difficult cycle to break—how can you save for a down payment when such a large chunk of your income is going toward rent? Homeownership feels unattainable for a large portion of the population.

It’s decidedly not an easy issue to work your way out of, but it is possible.

Figure Out What You Need

The first thing you can do is start to crunch the numbers. If you have a concrete number for the down payment you need, it will be easier to work toward your goals. If you don’t have a plan in mind or a set number to work toward, you’re going to feel scattered, and it will be much harder to get out of the rent cycle.

The down payment will depend on the type of loan you hope to get and where you plan to buy.

There are mortgages with a down payment as low as 3%, giving you opportunities to save up in a shorter period of time.

You may have to pay for private mortgage insurance if you don’t put down 20%, however.

You have to think about other costs that you’ll need upfront money for to buy a home. These costs include closing fees and the costs of moving.

Open a Dedicated Down Payment Savings Account

Once you have a concrete number in mind and have explored the mortgage options available to you, and know which you’d like to ultimately get, you can create a savings account. This account will only be for your down payment and nothing else.

It should be liquid but separate from anything else so that you aren’t tempted to spend the money in it.

Deal with Debt

You’re going to need to find ways to cut costs if you want to put more money aside to buy a house. Cutting your debt is going to be one way to do that.

If you have a balance on a credit card with a high interest rate, you might try to do a balance transfer. You can transfer the expensive debt to a card with a zero-percent interest period.

If buying a house is your goal, try not to add any more debt during this time.

To qualify to get a mortgage, you’ll have to meet the debt-to-income requirement.

Find Ways to Cut Back

It’s hard to give things up, but if you’re putting a fair amount of money into your rent, there’s not a lot you can do about that unless you’re willing to move.

You’ll have to find other ways you can cut your costs. That might mean skipping meals out or delivery food or going through your subscriptions to see what you can eliminate.

Think About Moving

We mentioned moving above, and you may not be willing or able to do it, but if you can, cutting down on what you’re paying for rent is one of the best ways to have more money to put toward a down payment.

If you can’t move to a smaller or less expensive home, you might try to renegotiate your lease with your landlord, or you could get a roommate. If you can move, along with getting a smaller place, another option is to move outside of the center city area, if you live there currently. Typically, the further out you move from the central area of your town or city, the lower the rent.

Explore Assistance Programs

Finally, many mortgage lenders have programs and loans for first-time homebuyers that cover part or all of a down payment. There are also grants, which require you to complete a homebuyer education course before you get the financial assistance.

If you work in certain fields, like as a first responder or teacher, homebuying assistance programs are often available.

A lot of lenders are looking to reach out to underserved communities to help them make homeownership a reality, so make sure to explore everything that’s out there.

The Pros and Cons of An Adjustable-Rate Mortgage

 With mortgage rates rising rapidly and coming off years of record lows, many potential

homebuyers are looking for ways to beat the situation. One available option is an adjustable-rate mortgage. An adjustable-rate mortgage has pros and cons, and both have to be carefully weighed before making a decision.

An adjustable-rate mortgage is also known as an ARM. These home loans have an interest rate that adjusts over time based on what’s happening with the market. These loans will often begin with a lower interest rate than a comparable fixed-rate mortgage, and the interest rate doesn’t stay the same forever.

Your monthly payment can fluctuate after your initial period.

A fixed-rate mortgage offers predictability and certainty because, for the life of the loan, the interest rate stays the same, regardless of what’s happening with the market.

An ARM, by contrast, can become more expensive or less expensive.

There are two periods with an ARM. There’s a fixed period, usually the first 5, 7, or perhaps ten years of the loan. During this set period, your interest rate doesn’t change. Then, there’s an adjustment period. Your interest rate during the adjustment period can go up or down based on changes in the benchmark.

Mortgage rates are influenced by a range of factors, including personal factors like your credit score and broad factors such as economic conditions. You might get a teaser rate upfront that’s much lower than the rate you could pay later on in the life of the home loan.

The benchmark in your ARM loan would be the basis of your rate. The contract may name the rate benchmark the U.S. Treasury or the secured overnight finance rate (SOFR). The named benchmark will, at some point in the life of your loan, be the starting point to calculate resets.

The benchmark is used, and the loan is priced at a markup or margin. The margin applied to your ARM will depend on your credit history. A rate cap may be in place with an ARM, which would be the maximum interest rate adjustment your loan would allow at any particular time.

The Pros of Adjustable-Rate Mortgages

Adjustable-rate mortgages can be a good option if your initial goal when buying a home and getting a loan is the lowest interest rate. Your teaser rate isn’t forever, but you’ll get lower initial payments, so you’ll improve your cash flow. You might also be able to put more toward your principal balance every month.

If you’re planning to move fairly soon after buying a home, you might not have to worry about the adjusting interest rate. An ARM can be a good option for someone buying a starter home. You may have plans to upgrade, so you can sell your home before the fluctuation of the interest rates, which keeps your risks pretty low with this type of loan.

When you’re paying less monthly, you have more flexibility in your budget to meet other financial goals.

If you think you’re moving somewhere that you won’t stay for more than five years, an ARM is often the best option.

The Cons of an Adjustable-Rate Mortgage

The biggest downside of this type of mortgage is that you’re taking a risk that your interest rate will go up. That’s highly likely, meaning eventually, your monthly payments will increase. It’s hard to predict what your financial situation will be in the future, and you might at some point find it’s a struggle to make your monthly payments if they’re higher.

There’s also an inherent sense of uncertainty that can cause anxiety for some buyers.

Finally, you also have to consider the risk that if you are planning to stay in your home for five years or fewer, you may not be able to sell it before your rate adjustment. If you’re in an ARM situation and can’t sell it, an alternative would be to refinance to a fixed-rate loan or maybe a  new adjustable-rate mortgage.

How To Prepare For A Bidding War

With the housing market being a seller's market on steroids, due to lack of homes are the market, you need to be prepared to have to fight multiple buyers competing for the same home.  Here is how to prepare for a bidding war.

 

What The New FICO Credit Score Changes Mean

Fair Isaac, the giant credit score company, recently announced the biggest change since 2014 in how it determines its FICO credit scores. This new FICO 10 system — expected to go into effect by year’s end — could affect your home buying and credit borrowing in big ways, possibly for the worse and possibly for the better.

But there are a few things you can do to help prevent it from lowering your credit score.

Having good credit is especially important in retirement. It can save you thousands of dollars — with a lower interest rate on a mortgage, car loan or credit card — at a time of life when every penny really counts. And a high credit score could help you get a rewards credit card or a better interest rate with one, making travel in retirement less expensive. Insurance premiums, utility bills and apartment rents may also be more affordable when your credit is in good shape.

Conversely, having a poor credit score could keep you from getting a mortgage on a retirement home or raise your monthly expenses due to higher borrowing costs.


What the New FICO Credit Score Changes Will Do
According to FICO, about 40 million people could see their credit scores rise 20 points or more with the new system. But another 40 million could see their scores drop 20 points or more. And about 110 million people could see their credit scores go up or down by under 20 points.

What’s behind FICO 10? Something known as credit score inflation.

A few years ago, due to a legal settlement, the three major credit reporting agencies (Equifax, Experian and TransUnion) agreed to remove tax liens and judgments from credit reports. That caused millions of Americans to see a boost in their credit scores. The average FICO score climbed to an all-time high of 706 in 2019; scores typically range from 300 to 850.

But lenders weren’t thrilled with this development. Some argued the credit score increases weren’t deserved and could lead some people to get loans and credit cards they wouldn’t be able to pay on time.

According to FICO, a credit card issuer might be able to lower its number of defaults by up to 10% under the new scoring model, though. One reason: FICO 10 will put more weight on a borrower’s rising debt levels. So, if you switched from paying off your cards in full each month to carrying growing balances, you may well see a lower credit score.

3 Ways FICO 10 Could Hurt Your Credit Score
Here are three ways the FICO 10 changes could hurt your credit score:

1. Late payments could trigger a bigger credit score drop than before.

2. If you have a history of not paying off your credit card debt in full every month, your credit score may decline.

3. Personal loans might damage your credit score, especially if you use them to consolidate credit card debt, but then run up credit card balances.

That said, many of the general rules you’ve learned about earning a good credit score still apply under FICO 10. For example, it will still help to pay your bills on time, keep credit cards open and review your credit reports for errors often.

How to Change Your Credit Habits Due to FICO 10
But you may want to tweak your approach to credit management in light of the new scoring changes to come. Here’s how:

Be sure not to be late on your loan and credit card payments. Even the occasional late payment might be a bigger issue under FICO 10.

Make paying off credit cards a bigger priority. FICO 10T (an alternative version of the new scoring system) will look back at how you’ve managed your credit cards over the last 24 months. If you have a history of paying off card balances every month, this good habit should work in your favor.

Be careful how you use personal loans. Using a low-rate personal loan to consolidate credit card debt may still be a smart financial move. However, it will be more important than ever to avoid getting back into credit card debt because a personal loan consolidates your debt.

If you start following the good habits and steering clear of bad ones, you may be able to avoid potential credit score problems in retirement.

Easy Curb Appeal Updates For 2020

Does curb appeal matter if you are trying to flip a house? Yes it does! Research claims that buyers can decide if they would be willing to buy a house within the first eight seconds of seeing the property. What will potential homebuyers see in the first eight seconds after driving up to your property? If you’re listing a house soon and want to see immediate interest, give the below tips a try in order to update your curb appeal and get your home sold fast.

Tidy Up The Yard
You may not have the time or the money to invest in brand new landscaping, but that doesn’t mean that you can’t make the yard look clean. You can buy mulch in bulk at Home

Depot for cheap. Having mulch is the easiest way to transform your yard and make it look neat and fresh. Plant some new flowers in pots placed near your front door, and add a new welcome mat. Finally, Mow the lawn and trim branches.

Clear The Pathways

It's simple enough to get out the hose and spray away all leaves from sidewalks and walkways. Large piles of leaves in the backyard and front can be a turnoff to potential homebuyers because it may make them think that the yard is hard to take care of or that the home is unkempt.

Paint or Power Wash?
Take a walk around your home and inspect the exterior. Do you notice any peeling or chipped paint? It may be time to consider repainting the exterior. Check the walkways, windows, and smaller details that are looking drab. A fast power wash can help transform these areas without costing a fortune. You can easily rent a power washer if you don’t have one.

Add Color

Consider updating your front door for a fresh, new look. Add a pop of color by painting your front door if you don’t have the funds to update the whole house with a fresh paint. A new entry can return between 75–100% of your investment. Follow the above tips for some easy curb appeal fixes to sell your home quickly in 2020. Good luck!

How to Make Your Valentine’s Flowers Last Longer

There is nothing quite like a floral display to add a touch of love and warmth to a room. Receiving a glorious bouquet of

flowers definitely puts a smile on our face and since it’s February, our thoughts turn to Valentine’s Day, romance and that special someone in our life. 

So when that special someone in your life gives you a big bunch of fabulous red roses this weekend and has that silly grin on their face that asks – "Did I do good?", you can give them a winsome smile and let them know how much you love and care for them. 

Try These Tips to Help Your Flowers Stay Fresh
The love that you receive on Valentine's Day can indeed last a lifetime. Don't you wish those romantic roses you receive did too? So when you receive your Valentine’s Day flowers, here are a few tips to keep them looking fresh and beautiful for as long as possible:

Before you start, make sure that your vase is clean. Then remove any leaves from the lower part of the stems that will be submerged in the water.

Trim about 1cm from the end of each stem, at a 45o angle and do this under water. This stops air getting into the stem and makes it easier for the flowers to draw fresh water into their stems.

Re-trim the ends of the stems every day or so, to keep the ends fresh.

Give your flowers the right nutrients to keep them fresh and healthy for longer. Some florists include little packets of flower food with each bouquet. Make sure to use it. Add one packet of flower food every time you refresh the water – either daily or every second day.

Lastly, add a few drops of bleach to the water to help keep the water clean. Remember, only a couple of drops or you will damage the flowers.

More Pro Tricks to Keep Valentine's Day Flowers Blooming

Fresh Flowers need just the right temperature to remain vibrant and blooming. Avoid placing your Valentine's day roses directly under the air conditioner, in direct sunlight, or near a heat source. Natural indoor lighting works just fine for your flowers as long as you're following the tips we've listed above.

Most important of all, make sure to wash the vase clean with soapy and dry it thoroughly each time you want to replace the water. This will help get rid of the bacterial growth and help your flowers stay fresh longer.

That’s the secret to keeping your Valentine’s Day flowers in tip top shape for as long as possible. Happy Valentine’s Day everyone!