Is This the #1 Benefit of Homeownership?

There’s a reason homeownership has long been a critical pillar of the American Dream—and it’s not just about the white picket fence. Many economists will tell you that buying a home is one of the savviest financial investments you can make. So does that mean wealth is the #1 benefit of homeownership?

Financial Wealth: The #1 Benefit of Homeownership

a benefit of homeownership

If you’ve done any reading about financial planning, investing, or buying a home, you might have heard that a mortgage is like a “forced savings plan” or that renting is like “throwing money away”. But if you’re still paying money every month, what’s the difference?

Homeownerhip builds equity

building equity with a mortgage

The biggest difference between paying rent and paying a mortgage is equity. Equity is the amount of money you could sell your home for minus the amount you still owe on your loan. Every month, the money you pay for your mortgage goes towards reducing the amount you owe on your loan. So in short, the more money you pay, the more equity you’ll have.

Equity builds more quickly than many realize

building equity

That monthly mortgage payment might seem like a drop in the bucket compared to the total amount you owe on your loan, but equity builds more quickly than you might think. In fact, a recent study by CoreLogic showed that, thanks to rising home prices, the average mortgage holder gained a total of $7,300 in equity in the past 12 months, for a total equity of $177,000.

The average renter, on the other hand, has $0 equity—but has still spent money every month paying for their housing.

Will the pandemic affect your equity?

a home for sale in the Triangle

Thanks to recent closures, restrictions, and soaring unemployment, many fear that the housing market will see a decline in the coming months. However, as many of these closures are temporary, most experts agree that the housing market will quickly rebound as life begins to return to normal.

Triangle Homeownership Has Its Own Perks

an aerial shot of raleigh

The Triangle real estate market has been particularly hot for the past few years, thanks to the area’s strong job market and rapidly growing population. For homeowners in the Triangle, this means equity that is constantly growing, despite economic downturn following the recent health crisis.

Eager to Learn More About Buying a Home in the Triangle?

If you’ve been thinking about buying a home in the Triangle, then now’s the time to make a move—while interest rates and competition are low. Concerned with how the ongoing health crisis might have affected your homeownership goals? Contact Linda Craft & Team today at 919-235-0007 and let us put our 350+ years of combined experience to work for you.

Homeownership Rates Are Higher Than They’ve Been in 8 Years!

Over the past few months, those of us in the Raleigh area have been under pretty strict stay-at-home orders, and many of us have been working from home or have been out of work entirely. Life may have been put on pause, but real estate hasn’t taken a rest. In fact, a recent study by Housing Vacancy Survey shows that homeownership rates are higher than they’ve been in eight years!

Why Are Homeownership Rates Rising Despite Shut-Downs?

a family moving into a new house

While shut-downs and closures have shaken up daily lives like never before, for many of us, being at home has meant having more time to slow down and appreciate the little things in life. Spending time at home has given us an increased value in the sense of home—so really, it’s not too surprising that homeownership increased to the highest it’s been in eight years.

Low interest rates have made buying affordable

low interest rates leading to increasing homeownership rates

The first quarter of 2020 saw an increase of about 2.7 million homeowners—and for many, this was made possible by low interest rates. Especially after the fast-climbing rates of 2018, the lower rates of 2019 were quite surprising. But even those were nothing compared to the pandemic-driven drops of 2020. With some of the lowest interest rates in American history, 2020 has actually proven quite favorable to buyers.

New homes have increased availability

a beautiful new home being built

New home construction has also been on the rise in the last several months, which has provided eager buyers with more options than existing homes alone can offer.

The Raleigh area especially has seen some fabulous new construction developments in recent months and years—providing both affordable and luxury options for buyers of all ages and means.

Ownership is up in all age groups—but especially millennials

young happy homebuyers

Thanks to favorable economic conditions (like low unemployment and high household income) in late 2019 and early 2020, many younger buyers have been making moves to settle down and buy homes. In fact, households under age 35 (many first-time buyers) saw the largest jump in homeownership rates, with a climb of 1.9% from last year. The next age group, households aged 35 – 44, saw the second-largest gain of 1.2%. Even the 65+ age group saw a minimal gain of 0.2%.

Homeownership provides a sense of home

a happy family at home

The recent closures have certainly shined a light on which businesses and services are truly essential to keep our country running. And there’s a reason real estate was deemed essential by the majority of states and towns across the country—including North Carolina and the Triangle. That’s because it is essential to a vast majority of people across America.

Homeownership has long been an important element of the American Dream. And this recent health crisis has helped us to appreciate the homes we’ve shared with family, with friends (and virtual friends), with pets, and with kids—and truly see the value of homeownership.

Dreaming of Homeownership in the Triangle?

If you’ve been dreaming of buying a home in the Triangle area, we’re here to help! Whether you have questions about how your goals might have been affected by the global health crisis or you’re ready to start searching, Linda Craft & Team is here to put our 350+ years of experience to work for you. Give us a call today at 919-235-0007 and let’s get started!

Is It Smart to Buy a Home Right Now? Actually… Yes.

With unprecedented closures and social distancing measures changing the way we do everything from business to everyday life, the economy has been in a state of upheaval, leaving many would-be buyers wondering if it’s smart to buy a home right now. Some have put their searches on hold, while others have continued on the hunt. So, who’s right? Is now a good time to buy a home?

It’s Not Easy, But It IS Smart to Buy a Home Now

searching for a home in the triangle

According to ShowingTime, the real estate industry’s leading showing management technology provider, March saw the first nationwide drop in showing traffic in eight months. However, April’s data indicates that things might be starting to pick back up again.

So, why is traffic increasing? Aside from more personal reasons for buying, much of this increased interest is driven by the knowledge that now is actually a financially smart time to buy.

Here’s exactly why buyers are getting back in the market.

Agents are becoming innovative

online signature on a phone

With in-person showings limited, or even completely disallowed in some areas, real estate agents have been turning to technology to continue helping clients find home.

Using technology, agents are able to give buyers and sellers an almost entirely virtual real estate experience, including video consultations, virtual tours, online mortgage applications, e-signatures, and more.

Mortgage rates are rock-bottom low

low mortgage interest rates in the triangle

Mortgage interest rates are a huge financial factor when it comes to buying a home. The difference in a few fractions of a percentage could be tens of thousands of dollars over the life of a loan! Today, these interest rates are hovering near an all-time low, making homebuying significantly more affordable for many borrowers.

Some buyers need to move

moving because it's a good time to buy

For many buyers, their upcoming home purchase is a matter of necessity. A change in job, familial status, or finances could be driving a buyer’s need to move on a timeline. Real estate is often not simply a financial transaction, but a necessity.

Bottom Line: Is It a Good Time to Buy?

happy home buyers in the triangle

As with any buying or selling decision at any time, the decision to buy or sell must be made on a personal basis. If you’re financially in a place to take advantage of low mortgage rates, then yes, it’s a smart time to buy. If you’re happy househunting online and aren’t daunted by limited in-person interaction, then it’s a good time to buy. If you have to move for one reason or another, then it’s a good time to buy.

Is It a Good Time to Buy in Raleigh?

Before the health crisis hit, the Raleigh-area real estate market was hot. Demand was high, home values were high but still affordable, and supply was low but steady. While the market definitely slowed as restrictions increased, it has remained active, and hopes are that it will pick up again as the country and the state begin to reopen.

Concerns about how your Raleigh home buying plans might have been affected by the COVID-19 pandemic? Contact Linda Craft & Team today; we’re more than happy to answer any questions. Give us a call at 919.235.0007 and let us put our 350+ years of combined experience to work for you.

Will 2020 Be the Year of Luxury Real Estate?

Luxury homes weren’t seeing too much interest at the end of 2018. The US real estate market was comprised heavily of first-time buyers searching for lower-priced homes, and the luxury market slowed considerably. But a shift in the market and buyer interest shows that luxury real estate might be poised to make a comeback in 2020.

What Is Luxury Real Estate?

luxury real estate in raleigh

From a general real estate standpoint, homes priced in the top 25% of a price range for a particular area are considered “premium” or “luxury” homes. That being said, the definition of luxury living will vary from city to city, region to region, and even buyer to buyer.

Here in the Triangle, that “premium” price tag could even start as low as $750,000.

Luxury is back on the market

According to the Institute for Luxury Home Marketing (ILHM), there has been a definite upswing in both luxury single-family and condo sales, so it’s a good time to make a move in the high-end price range.

It’s a Smart Time to Enter the Luxury Market

a beautiful luxury bedroom

If you’ve been considering investing in a high-end property or trading your old home for something with a bit more space, now is the time! High inventory and favorable buying conditions make 2020 a fantastic year to invest in premium real estate.

Interest rates are low

In fact, interest rates aren’t just low; they’re near historically low—which means it’s a pretty ideal time to invest in any kind of real estate. At any price point, you will ultimately be paying less for your loan when rates are this low. And when you’re working in a luxury price range, that translates to a lot of money.

Inventory is high

Lower-priced homes have been in high demand for some time now, which has led to a shortage in inventory. The high-end market, however, is not experiencing this same deficit, thanks, in part, to the market slowdowns of 2018 and early 2019. For buyers, this means that despite the increasing competition, there are still plenty of choices!

Buying power & affordability are increasing

Despite a steady rise in home values over the course of the last handful of years (great news for homeowners!), homebuying is actually becoming more affordable for many buyers! How is this possible? Well, for one, lower interest rates make mortgages more accessible. And for another, an increase in average wages gives buyers more room in their budgets to spend on housing.

Luxury Real Estate in Smaller Cities

luxury real estate in the Triangle

Not only is luxury investing making a comeback, it’s growing in popularity in smaller cities, too. Because prices in smaller cities tend to be more affordable, buyers are able to find better deals and purchase more house at the same cost.

Luxury investing in Raleigh

Raleigh is a great example of where small-city luxury real estate is really flourishing. Affluent communities like North Raleigh, Cary, Chapel Hill, and Wake Forest have strong, yet affordable, high-end markets with price tags starting in the low to mid $700s and climbing into the multi-millions.

One of the great things about investing in the Triangle is how much value you really will get, especially compared to larger markets. A million dollars, for example, might get you a lakefront estate or a brand-new ultramodern condo in Cameron Village. It might get you a historic stone manor or backyard tennis courts or 60+ acres of breathtaking countryside complete with horse facilities. There’s a lot out here… and the prices are fantastic.

Ready to Get in on the Luxury Market?

If you’re thinking of investing in a luxury home in Raleigh or the Triangle, Linda Craft & Team is here to help! Our partnership with Luxe Global, coupled with our 350+ years of combined experience, gives us a highly competitive edge—and you an unparalleled investment experience. Contact us today to learn more or get started.

50 Years of Homebuying: A Look at Interest Rates Over Time

We all know that home prices change over time. It’s one of the reasons we invest in real estate in the first place—because we know that a home you buy today is likely going to be worth a lot more tomorrow! But did you know that interest rates have also changed a lot over time… and it’s not how you might think!

Interest Rates Over Time Might Surprise You!

infographic of interest rates over time

If you think your parents or grandparents probably had much lower interest rates than you will, you’re actually pretty far from the truth. Interest rates have fluctuated a lot over the past 50 years, and definitely not how you might think.

The 70s saw sky-high rates

You don’t have to know what today’s rates are to know that interest rates of 8.86% are pretty high. That’s high for a car loan… but it’s also sky-high for a house. One of the reasons for these astronomical rates was inflation, which began rising in the early to mid 70s.

… But the 80s were even higher

Inflation continued to climb into the 80s, and lenders raised rates to combat the economy’s flagrant boom. Rates hovered around 12.7%… with highs climbing to over 18% in 1981!

Rates dropped in the 90s… a little

The interest rate hike did improve inflation, and the economy eventually leveled off. In the 90s, rates fell back into the 8% range—still high, but definitely more manageable than the rates of the 80s.

Rates continued to fall into the 2000s

From the 90s into the 2000s, rates continued to drop into the low 6% range, heading into the housing boom prior to the 2008 market drop. During this time, the combination of low interest rates and low home prices lead to a housing “bubble” that encouraged risky home buying, and ultimately lead to the 2008 housing crisis. Following the collapse, interest rates climbed again, though not significantly.

The 2010s saw all-time historic lows

historic lows of interest rates over time

After the 2008 collapse, the real estate market slowed considerably. Many previous owners had foreclosed on their homes, while others were forced into short sales (selling for less than they owed), and once-likely buyers were wary of trapping themselves into a similar scenario.

To bolster the market and encourage buying, the Federal Reserve continued to lower rates until they reached an all-time historic low of 3.31% in 2012. This did the trick, and the market started to pick back back up… until 2016 once again saw a booming and robust housing industry.

Today’s rates are almost historically low again!

Rates in the late 2010s began a climb upwards from the 2012 low, with rates in 2018 hitting highs close to 5%. Experts predicted 2019 would see rates over 5%, but in a surprising twist, rates actually fell!

Now, even with mortgage rates expected to increase a bit over the next year, they’re currently hovering near a five-decade low. In fact, rates are just 3.49% today… which approaches the all-time low of 3.31%. So while your home likely is going to cost you more than your parents’ or grandparents’ homes, your loan is going to cost you significantly less… and that’s a pretty big deal.

Interest Rates Are a Big Deal!

calculating interest rates over time

Just how much do interest rates matter? Let’s say that your parents bought a $100,000 home at the 1981 peak rate of 18.63%, and you buy your home—also $100,000—at the 3.49% rate of 2020. Your parents would be paying $1,558 a month for their home… while your mortgage payments would be just $448. That’s $1,110 LESS a month, $13,320 LESS a year, and $399,600 LESS over your 30 year loan.

That’s a tremendous difference. Interest. Rates. Matter. Big time.

Want to Buy a Home in Raleigh While Rates Are Low?

Ready to buy while the market is in your favor? Then it’s time to contact Linda Craft & Team and let us put our 350+ years of real estate experience to work for YOU! First home? Tenth home? Doesn’t matter; we’ll work hard to make sure you find the perfect home in just the right spot.

Rental Prices Are on the Rise—Here’s What That Means for You

If you’ve been hesitating to buy a home because you’re afraid you can’t afford it, 2020 might be the year you reconsider. Falling mortgage rates and rising rental prices indicate that buying could actually become more affordable than renting—in addition to the numerous other benefits of owning a home.

Here’s what rising rental prices could mean for you.

Rental Rates Rise While Homeownership Becomes Affordable

rental prices rising

Real estate and rental professionals predict that 2020 could be a strong year for homeownership thanks to a number of factors. According to Freddie Mac, mortgage rates are expected to remain low, holding steady at an average of about 3.8%.

On the flip side, the national rent index increased by 1.4% year-over-year, according to the National Rent Report, and is expected to continue its climb.

Increasing rental rates add up fast

calculating rental rates

An increase of 1.4% might not sound like much—but the math is pretty powerful, especially considering that rental rates have been on a steady rise since 2012. In fact, in 2012, rental prices sat at an average of $1,300 per month. Today, eight years later, they’ve risen to $1,600 a month—an average of $300 more.

When you break down the math, those numbers become even more eye-opening. At $1,300 a month, you pay $15,600 a year for housing. At $1,600, that number climbs to $19,200. That’s a pretty huge difference!

Mortgage rates don’t change

happy buyers outside a home

One of the biggest financial advantages to homeownership, besides building equity, is the stability of monthly payments. Since most homeowners use a fixed-rate mortgage, your rates do not change. So if your monthly payment is $1,500 at the beginning of your payment, it will still be $1,500 eight, 10, 20, and even 30 years from now.

The bottom line: Buying is becoming affordable!

searching for a home for sale

The bottom line for many is that skyrocketing rental prices are making it more and more difficult to find decent housing at an affordable price. Buying a home is quickly becoming a more appealing—and at times, more viable—option for many, thanks to low and predictable interest rates.

Thinking of Buying a Home in Raleigh?

Are you thinking of buying a home in the Triangle area? Linda Craft & Team would love to help! Contact us today to learn more about how we can use our 350+ years of combined experience to help you find the perfect home in just the right spot.

The #1 Misconception in the Homebuying Process

There are a lot of myths and misapprehensions about the homebuying process and real estate investing in general—how Fed rates affect mortgage rates, how inventory affects buyer demand, how the economy as a whole affects the real estate market. But this might be the #1 misconception of the whole process.

Homes Values & Affordability: A Major Misconception

#1 misconception about homebuying affordability

Towards the end of 2018, home prices and values were on a major rise. Then, in 2019, the combination of government shutdowns, a minor stock market slump, and rising interest rates caused the market to slow. Economists predicted an increase in home inventory and a subsequent decrease in prices.

This was not the case.

The new year ushered in a few surprising turns of events—like decreasing interest rates—that brought many buyers back into the market, drove inventory down, and brought home values back up. This reacceleration of home values caused many buyers to believe that owning a home was becoming less affordable.

Rising values don’t mean decreased affordability

How could a higher price tag not mean decreased affordability? In short, because there’s more to affordability than home value. Interest rates, for example, have decreased significantly since the end of 2018, which despite rising prices, has actually increased affordability for many buyers.

Interest rates hugely affect home affordability

In fact, a study by Mortgage Monitor revealed that, although average home prices increased nearly $13,000, the monthly mortgage payment needed to buy that same home actually dropped 10% thanks to falling interest rates.

Income also affects affordability

Not only have interest rates decreased, but median family income has actually increased by 5% over the past year. This gives buyers even more buying power and increases the overall affordability of buying a home.

The #1 Misconception: High Prices Mean Decreased Affordability

House with keys

The bottom line: just because home prices and values are increasing does not mean that homebuying is becoming less affordable. If anything, the contrary is true—which makes it a particularly good time to buy.

Increased values + Increased affordability = A great time to buy

What happens when home values are up AND affordability is up? It’s a recipe for the perfect time to buy a home! Not only will you be paying less, you’ll also reap the benefits of instant equity as home values continue to rise throughout the year. In short, there’s never been a better time to buy.

Ready to Buy in the Triangle?

If you’re thinking of buying a home in the Triangle, now’s the time to act! Contact Linda Craft & Team and let us put our 350+ years of combined experience and expertise to work to find you the perfect home… in just the right spot.

3 Oft-Overlooked Financial Advantages to Homeownership

Buying a home comes with a lot of perks, both financial and personal—building equity, finding a place to belong long-term, becoming part of a community—but there are some overlooked financial advantages to homeownership, too.

Financial Advantages to Owning You Didn’t Know About

financial advantages to homeownership

If you’re still renting or haven’t owned a home recently, you might not know about all the hidden benefits to owning! Here are three financial advantages to homeownership you might not’ve thought about.

Someday, you won’t have a housing payment

paying off a home loan

When you first buy a home, you’ll likely have a mortgage, and it will probably be comparable to your current rent payment. But starting from that first monthly payment, your money will no longer be going into your landlord’s pocket; it’ll be paying down your mortgage.

And believe it or not, if you stay in your home long enough, there will come a day when you don’t have a monthly housing payment.

Homeowners get tax breaks

tax benefits of homeownership

As a renter, you might not be aware that owning a home comes with a few nice tax benefits. In fact, both the mortgage interest and your property taxes are tax-deductible—which can be a pretty big break when tax season rolls around! And it’s certainly a benefit that renters cannot enjoy.

Monthly housing costs are predictable

budgeting monthly costs

When you rent a home, the amount you pay per month depends on the rates your landlord sets, and since most leases are terms of a year or two, that rate can change from year to year. But when you own a home, such is not the case.

The majority of homeowners use a fixed-rate loan, which means that your rates stay the same throughout the duration of your loan. Your property taxes and homeowner’s insurance may fluctuate over the years, but what you pay for your mortgage will not. Not only does that make budgeting a breeze, but it also ensures that you’re protected against things like inflation and skyrocketing rental rates.

Convinced to Buy?

If you’re ready to buy a home in the Triangle, or even if you’re still on the fence, Linda Craft & Team is here to help! Let us put our expert local knowledge, our extensive network, and our 350+ years of combined experience to work to find the perfect home for you.

Great News for Renters Who Want to Buy a Home!

For many renters, the dream of owning a home seems like just that—a dream. And with rental rates rising in recent years, saving for a down payment while continuing to pay more and more in rent has become almost impossible. But there’s good news on the horizon for would-be buyers!

Stable Rental Rates Mean More Savings for Future Buyers!

renters saving to buy a home

Recent studies from four major rent indices indicate that rental rates could be stabilizing in the near future… after years of constant increases. That means renters who’ve struggled to find extra money to set aside for a down payment may once again be able to contribute to a savings account.

Rents have been soaring in past years

increasing rental rates

Despite a rise in buyer demand and new construction homes, rental markets across the US have remained extremely competitive over the past handful of years. Vacancy rates are low, which has caused rents to climb at steep rates—soaring from a national average just around $1,300 to over $1,600 between 2012 and today.

Leveling rental rates are in the forecast

renters searching for a house

Four major rent indices—Zillow Rent Index, RENTCafe, CoreLogic, and The Apartment List National Rent Report—all predict there could be a much-needed slowdown in the rise of rent prices. In fact, all four have already shown a definite slowing in the increase of rental rates.

Spend less, save more

saving for a down payment

If you’ve been dreaming of leaving the rental life behind and buying a home of your own, good news is on the horizon. With rental rates stabilizing, you might not find yourself handing over the majority of your paycheck to your landlord—leaving you with more room to put aside money for your down payment.

Dreaming of Buying in the Triangle?

Have you been thinking of buying a home in the Triangle of North Carolina? Linda Craft & Team is here to help! With over 350 years of combined real estate experience, we’ve got what it takes to ensure you find the right home at the right price in the right location! Give us a call and let’s get started.

Have You Outgrown Your Home? What to Do When It’s Time to Move On

As years go by, our priorities naturally change. Perhaps your household size has increased or decreased, or you’ve seriously downsized your number of possessions. Whatever the circumstances might be, it is important that your home matches your current needs.

It may see tough to initially admit that you are ready to make such a significant change, but the good news is, we are here to help you figure out the next steps when it’s time to move on.

Now’s the Time to Sell

Sell your Triangle home.

If you are in the market to sell, then there’s even more good news for you: now is the perfect time. According to the most recent Home Price Insights report from CoreLogic, home prices have gone up by 3.5% year-over-year. Not only that, but research from the National Association of Realtors found that housing inventory has dropped by 4.3% since just last year.

This is not just a coincidence—these two trends are closely related. As overall inventory has decreased, demand has only increased, which has caused a surge in housing prices. By selling now, you stand to make a much higher profit than you would if you choose to wait!

Beginning Your Home Search

Starting your Triangle home search.

Of course, once you sell your home, you will have to revisit the home search process, perhaps for the first time in years (or maybe even decades!). Since the motivation behind selling your home is to find one that is more appropriate, then you should be sure to put plenty of careful thought into your decision.

Luckily, the Linda Craft Team can help! Get started by using our specialized search tool to narrow down your options based on everything from price and size to features and location. Once you’ve sorted out your wants and needs (and maybe even found a few options), give us a call. We’d love to use our database to find any homes in the Triangle area that fit your priorities!

Navigating the Home-Buying Process

Two people shaking hands.

There is much more to the buying process than just searching—but we’ll be around to help every step of the way. Wondering what your options are, from luxury to new construction? Check out our listings for each. Need a little help with the moving process? We’d be more than happy to send you our free guide on relocating to the Triangle area!

Whether you need help finding your perfect neighborhood or have a few questions about the mortgage process, you’ll find that we have a resource for your every home-buying need around the Triangle.

Ready to Find Your New Triangle Home?

Don’t settle for a home that doesn’t fit your lifestyle—make today the day that you being your new journey. When you work with Linda Craft & Team, REALTORS® , we’ll put our over 350 years of combined real estate experience to work, whether it’s netting top dollar on your home sale or finding your dream home for a dream price.

Take some time to browse what we have to offer. Ready to get started? We’re just a phone call away!