Wondering how to make sense of today’s housing market? You’re not alone. A lot of people are asking what’s ahead for inventory, prices, the economy, and more. You deserve answers — and that’s where your trusted local REMAX® agent comes in.
If you’ve been house hunting lately, you’ve probably felt the sting of today’s mortgage rates. And it’s because of those rates and rising home prices that many homebuyers are starting to explore other types of loans to make the numbers work. And one option that’s gaining popularity? Adjustable-rate mortgages (ARMs).
If you remember the crash in 2008, this may bring up some concerns. But don’t worry. Today’s ARMs aren’t the same. Here’s why.
Back then, some buyers were given loans they couldn’t afford after the rates adjusted. But now, lenders are more cautious, and they evaluate whether you could still afford the loan if your rate increases. So, don’t assume the return of ARMs means another crash. Right now, it just shows some buyers are looking for creative solutions when affordability is tough.
You can see the recent trend in this data from the Mortgage Bankers Association (MBA). More people are opting for ARMs right now (see graph below):
And while ARMs aren’t right for everyone, in certain situations they do have their benefits.
Here’s how Business Insider explains the main difference between a fixed-rate mortgage and an adjustable-rate mortgage:
“With a fixed-rate mortgage, your interest rate remains the same for the entire time you have the loan. This keeps your monthly payment the same for years . . . adjustable-rate mortgages work differently. You’ll start off with the same rate for a few years, but after that, your rate can change periodically. This means that if average rates have gone up, your mortgage payment will increase. If they’ve gone down, your payment will decrease.”
Of course, things like taxes or homeowner’s insurance can still have an impact on a fixed-rate loan, but the baseline of your mortgage payment doesn’t change much. Adjustable-rate mortgages don’t work the same way.
Here’s a little more information on why some buyers are giving ARMs another look. They offer some pretty appealing upsides, like a lower initial rate. As Business Insider explains:
“Because ARM rates are typically lower than fixed mortgage rates, they can help buyers find affordability when rates are high. With a lower ARM rate, you can get a smaller monthly payment or afford more house than you could with a fixed-rate loan.”
On the flip side, just remember, if you have an ARM, your rate will change over time. As Barron’s explains there’s the potential for higher costs later:
“Adjustable-rate loans offer a lower initial rate, but recalculate after a period. That is a plus for borrowers if rates come down in the future, or if a borrower sells before the fixed period ends, but can lead to higher costs if they hold on to their home and rates go up.”
So, while the upfront savings can be helpful now, you’ll want to think through what could happen if you’re still in that home when your initial rate ends. Because while projections show rates are expected to ease a bit over the next year or two, no forecast is guaranteed.
That’s why it’s essential to talk with your lender and financial advisor about all your options and whether an ARM aligns with your financial goals and your comfort with risk.
For the right buyer, ARMs can offer some big advantages. But they’re not one-size-fits-all. The key is understanding how they work, weighing the pros and cons, and thinking through if they’d be something that would work for you financially. And that’s why you need to talk to a trusted lender and financial advisor before you make any decisions.
With the cost of just about everything going up these days — groceries, gas and utilities — you might be feeling like now just isn’t the time to take on any home projects. But remember, you don’t need to tackle a full-on renovation to make a big impact.
And if you don’t know where to start or what’s worth doing, lean on your trusted REMAX® agent for advice before you get your projects started.
Here are a few examples of smart, budget-friendly updates you can do in just a few days to not only make your home feel fresh and new, but add value too.
One key place a lot of homeowners want to give some love? The kitchen. But instead of gutting the entire thing, think about smaller ways to give your space a facelift. You could go for new hardware, or maybe even add a backsplash. And if you want a refresh on your cabinets, consider bringing in a pro to paint or re-finish them. Just remember, the right tools are essential to a quality end product. Your REMAX agent can recommend local pros they trust, if you do need to hire someone to get the job done.
Another easy win? Light fixtures. This is one of the most overlooked updates, and one of the most affordable. Switch out that builder-grade fixture in your dining room or hallway for something a bit more modern or with a spark of personality. That’s an easy win to instantly change the feel of a room. And it doesn’t have to cost more than a nice dinner out.
Strategic bathroom refreshes are another great bang-for-your-buck project. You’ll be surprised the difference a new faucet, mirror or shower curtain can make. Add some fluffy towels and a plant or two, and suddenly you’ve got spa vibes on a shoestring budget.
Wallpaper is also having a moment right now — and is pretty affordable. Whether it’s the traditional variety or the peel-and-stick kind, a pattern can add interest and depth to a room. Just don’t overdo it. Sometimes too much can be overpowering.
And don’t underestimate the power of paint. A fresh, neutral coat on the walls can do wonders, especially if your current colors are looking a little tired or too specific. The right shade can brighten a room, make it feel bigger and create a clean, updated look.
None of these projects require a ton of time or a huge payout. You may not even need to hire a contractor. Focus on the little upgrades that make a big visual impact, because even in a time when everything feels more expensive, you still deserve to love your home.
This weekend, grab a coffee, throw on some music and knock out one small project. Your home (and future self) will thank you.
When everything feels more expensive, it’s smart to focus on small updates that make a big impact. You don’t need a huge budget to love where you live. You just need a few good ideas (and maybe a little encouragement).
What’s on your weekend project list? If you’re ready to tackle those small-but-mighty upgrades, your trusted REMAX agent can help you prioritize what adds the most value. You don’t have to spend a fortune to make an impact.
There’s a lot of noise out there about what an economic slowdown could mean for the housing market. And if it leaves you feeling a little uneasy, you’re not alone. But here’s the thing.
If you’re worried about what a potential recession could mean for the value of your home, or your homebuying power, your trusted REMAX® agent is here to help set the record straight. You don’t have to fear the market when you understand what the data actually shows.
It’s easy to assume that if the economy slows down, home prices will fall. You might remember what happened in 2008. But the truth is: the housing crash of 2008 was an exception — not the rule.
It hadn’t happened before. And it hasn’t happened since. But what made 2008 so different? It was a flood of oversupply and very different lending standards. And everyone remembers how painful that time was.
Today, lending is much tighter, and even with inventory rising, the overall number of homes for sale remains well below normal levels. That keeps upward pressure on prices — and it keeps prices from falling significantly on a national level. And while prices are moderating in some markets today, a significant crash is unlikely.
In fact, according to data from Cotality, in four of the last six recessions, home prices actually went up (see graph below):
Don’t let fear of a recession make you assume prices are about to fall dramatically.
And since prices usually follow the path they’re already on, in most markets they should rise, not fall, in the days ahead. The rise just may slower, or even flat, but certainly not a crash.
Another important pattern you should know? Mortgage rates usually fall when the economy slows down.
Looking at the data for the last six recessions, mortgage rates came down each time — helping boost buyer purchasing power, even during tougher economic periods (see graph below):
If a recession does happen, history suggests you could see some relief in mortgage rates. However, it’s important to stay realistic. While a dip is possible, we’re unlikely to return to the ultra-low 3% rates seen in 2020 and 2021.
Economic shifts are part of the cycle, but they don’t have to derail your plans to buy or sell a home. Don’t let fear be the thing that keeps you from your next move.
Instead, lean on facts to guide your decisions. And your trusted REMAX agent is the perfect person to make sure you have the information you need to feel confident moving forward.