Keys to Success for First-Time Homebuyers

Purchasing your first home is an exhilarating decision and a significant milestone that can positively impact your life. However, recent years have presented challenges for first-time homebuyers, including tight inventory, rising home prices, increasing rents, and high student debt loads, resulting in a lower share of first-time buyers compared to historical norms. Despite these obstacles, there are two strategies you can explore to turn your homeownership dreams into reality.   Take Advantage of First-Time Homebuyer Programs to Save Money Affording the initial costs and fees associated with homeownership can appear daunting. Whether it's securing a loan, assembling a down payment, or having funds for closing costs, there are numerous expenses that make buying your first home seem challenging. Fortunately, there are various public and private first-time homebuyer programs designed to assist you in obtaining a loan with little-to-no money upfront. These programs offer benefits such as lower mortgage rates, down payment assistance, and tax incentives, making homeownership more affordable and accessible. State and local governments, as well as other organizations, often provide these programs. Many states and local governments offer down payment or closing cost assistance in the form of low-interest-rate loans, deferred loans, or even forgivable loans (grants) to individuals seeking their first house. To explore these opportunities, get in touch with the housing authority in your state and visit resources like Down Payment Resource, which can provide further information and guidance.   Explore All Possibilities Due to Low Housing Supply The current real estate market favors sellers, resulting in a shortage of available homes to meet the demand from buyers. To ensure you're maximizing your chances of finding a suitable home, it's essential to explore alternative options such as condominiums (condos) and townhomes. Compared to single-family homes, condos are generally less expensive. Additionally, insuring condos is often more cost-effective. The affordability of condos is partly attributed to their smaller size, but they still allow you to enter the housing market and start building equity. Another advantage is that condos typically require less maintenance. External maintenance, including landscaping, pool upkeep, external painting, paving, and snow removal, is usually covered by the condo association. Some internal maintenance, such as gas, electric, plumbing, and HVAC systems, may also be included. This shared responsibility helps reduce the time and effort required for maintenance tasks. Townhomes and condos provide excellent opportunities for homeownership. By owning your home, you can build equity, increase your net worth, and potentially facilitate future moves. To ensure a successful homebuying journey, especially for first-time buyers, it's advisable to work with a trusted real estate agent. A knowledgeable agent can educate you about the homebuying process, provide insights into your local area to find suitable options, and guide you through making competitive offers.   The current housing market poses challenges for first-time homebuyers. Nonetheless, there are still avenues to achieve your homeownership goals. Take advantage of first-time homebuyer programs and explore various housing options like condos and townhomes. By connecting with a local real estate professional, you'll have an expert on your side to navigate the process and increase your chances of success.

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Is the Spokane Real Estate Market Hot or Not?

  Spokane's real estate market has been through significant changes in recent years, experiencing both price drops and subsequent recovery. This blog post aims to provide a comprehensive overview of the top five neighborhoods in Spokane that have experienced price drops over the last 12 months. Additionally, we will highlight the one neighborhood that has seen positive growth during this period. Whether you're considering buying or selling a home in Spokane, understanding the local market dynamics is crucial. So, let's delve into the details.   Northeast Spokane: Located from Gonzaga University to Francis, and from Division to Millwood. Experienced a 12.7% year-over-year price drop. Median sales price: $288,500 (below Spokane's average). Offers more affordable properties for first-time homebuyers and investors. High transaction volume with over 500 sales in the last year. Low inventory (0.8 months) and average days on market (5), indicating a quick-moving market.   Northwest Spokane: Encompasses West Central to Francis, including the Shadle neighborhood and Audubon. Witnessed a 13.3% drop in prices over the last 12 months. Average sales price: $325,000. The Shadle neighborhood attracted buyers with its affordability and amenities. Average days on market: 6. Inventory increased to 1.2 months (still relatively low).   Northwest Areas: This area includes rural properties and smaller towns like Airway Heights. Experienced a 14.2% price drop. Average price: around $404,000. Sustained demand for smaller-town living. Median days on market: approximately two weeks. Slightly higher inventory (1.8 months) and rural properties tend to have longer market times.   Mead and Country Homes: Located on the north side of Spokane along North Division. Saw a 16.7% drop in home prices. Average price: $375,000. Limited number of active homes (21). Over 180 homes sold in the past year. Inventory sits at over two months.   Liberty Lake: Experienced a 16.7% price drop, similar to Mead and Country Homes. Average price: $505,000 (one of the higher-priced neighborhoods in Spokane). Approximately 400 homes sold in the Liberty Lake Green Acres area. Current inventory: 1.2 months. Average days on market: 12.   The Green Spot: East Side of the South Hill: The only neighborhood in Spokane County that saw positive growth (0.6%) in the last 12 months. Includes the Perry District along Thor and Freya and Lincoln Heights. Average price: $393,000. 73 active homes on the market. Stable market conditions with 1.3 months of inventory and an average of 12 days on the market.   Understanding the local real estate market is essential when considering buying or selling a home in Spokane. While the overall market experienced a decline in home values over the last 12 months, some neighborhoods offer potential opportunities for buyers. Northeast Spokane, Northwest Spokane, the area north of Highway 2, Mead and Country Homes, and Liberty Lake all experienced price drops, making them more affordable for interested buyers. The east side of the South Hill stood out as the only neighborhood with positive growth. It is crucial to work with a knowledgeable realtor who can provide valuable insights tailored to your specific needs.

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Scaling New Heights: Exploring the Reasons Behind Skyrocketing Mortgage Rates

Many prospective homebuyers are currently concerned about today's mortgage rates. If you're considering buying a home for the first time or selling your current house to find a better fit for your needs, you might be pondering two important questions: Why are mortgage rates so high? When will rates go back down? Let's delve into the context that can help address these questions:   Why are mortgage rates so high? The 30-year fixed-rate mortgage is largely influenced by the supply and demand for mortgage-backed securities (MBS). Mortgage-backed securities are investment products that resemble bonds and consist of bundles of home loans and other real estate debt. They are purchased from banks that issue these loans. Investors in mortgage-backed securities essentially lend money to homebuyers.   The demand for mortgage-backed securities plays a significant role in determining the spread between the 10-Year Treasury Yield and the 30-year fixed mortgage rate. On average, the historical spread between the two is 1.72%. However, as of last Friday morning, the mortgage rate stood at 6.85%, indicating a spread of 3.2%. This spread is nearly 1.5% higher than the norm. If the spread were at its historical average, mortgage rates would be 5.37% (3.65% 10-Year Treasury Yield + 1.72 spread).   Such a large spread is quite unusual. Typically, the spread approaching or exceeding 300 basis points has only occurred during periods of high inflation or economic volatility, such as the early 1980s or the Great Financial Crisis of 2008-09. The graph below demonstrates the historical instances when the spread reached or surpassed 300 basis points:   The graph shows a pattern of the spread decreasing after each peak, which is good news as it implies that there is room for improvement in today's mortgage rates. So, what factors are contributing to this larger spread and the current high mortgage rates? The demand for mortgage-backed securities is heavily influenced by the risks associated with investing in them. Presently, these risks are influenced by broader market conditions, including concerns about inflation, the potential for a recession, the Federal Reserve's interest rate hikes aimed at curbing inflation, negative narratives surrounding home prices, and more. In essence, when there is less risk, the demand for mortgage-backed securities increases, leading to lower mortgage rates. Conversely, higher risk reduces the demand for mortgage-backed securities, resulting in higher mortgage rates. Currently, the demand for mortgage-backed securities is low, hence the high mortgage rates.   When will rates go back down? According to Odeta Kushi, Deputy Chief Economist at First American, it is reasonable to expect that the spread and, consequently, mortgage rates will decrease in the second half of the year if the Federal Reserve eases its monetary tightening measures and provides investors with more certainty. However, it is unlikely that the spread will return to its historical average of 170 basis points, as certain risks are likely to persist. In summary, as investor fears subside, the spread will shrink, leading to a moderation of mortgage rates throughout the year. However, accurately predicting mortgage rates is challenging, and no one can be certain about what exactly will occur.   In conclusion, while the expectation is that mortgage rates will improve as the year progresses, it's important to keep in mind that no one can definitively forecast future mortgage rate movements.

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