Selling • February 18, 2025

Are You Asking Yourself These Questions About Selling Your House?

by Shawn Keane

Some homeowners hesitate to sell because they’ve got unanswered questions that hold them back. But a lot of times their concerns are based on misconceptions, not facts. And if they’d just talk to an agent about it, they’d see these doubts aren’t necessarily a hurdle at all.

If uncertainty is keeping you from making a move, it’s time to get the real answers. The ones you deserve. And to take the pressure off, you don’t have to ask the questions, because here’s the data that answers them.

1. Is It Even a Good Idea To Move Right Now?

If you own a home already, you may be tempted to wait because you don’t want to sell and take on a higher mortgage rate on your next house. But your move may be a lot more feasible than you think, and that’s because of how much your house has likely grown in value.

Think about it. Do you know anyone in your neighborhood who’s sold their house recently? If so, did you hear what it sold for? With how much home values have gone up in recent years, the number may surprise you. According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), the typical homeowner has gained $147,000 in housing wealth in the last five years alone.

That’s significant – and when you sell, that can give you what you need to fund your next move.

2. Will I Be Able To Find a Home I Like?

If this is on your mind, it’s probably because you remember just how hard it was to find a home over the past few years. But in today’s market, it isn’t as challenging.

Data from Realtor.com shows how much inventory has increased – it’s up nearly 25% compared to this time last year (see graph below):

Even though inventory is still below more normal pre-pandemic levels, it’s improved a lot in the past year. And the best part is, experts say it’ll grow another 10 to 15% this year. That means you have more options for your move – and the best chance in years to find a home you love.

3. Are Buyers Still Buying?

And last, if you’re worried no one’s buying with rates and prices where they are right now, here’s some perspective that can help. While there weren’t as many home sales last year as there’d be in a normal market, roughly 4.24 million homes still sold (not including new construction), according to the National Association of Realtors (NAR). And the expectation is that number will rise in 2025. But even if we only match how many homes sold last year, here’s what that looks like.

4.24 million homes ÷ 365 days in a year = 11,616 homes sell each day
11,616 homes ÷ 24 hours in a day = 484 homes sell per hour
484 homes ÷ 60 minutes = 8 homes sell every minute

Think about that. Just in the time it took you to read this, 8 homes sold. Let this reassure you – the market isn’t at a standstill. Every day, thousands of people buy, and they’re looking for homes like yours.

Bottom Line

When you’re ready to walk through what’s on your mind, I have the answers you need. And in the meantime, tell me: what’s holding you back from making your move?

Markets • February 18, 2025

Feb mid-month market update 2-2025

by Shawn Keane

Fact Check February – Don’t Fall In Love With These 7 Narratives on Housing

There is no online shortage of armchair quarterbacks when it comes to prognostications on the future of home values and affordability. However, there are narratives that some people, and journalists, stubbornly hold to that are simply outdated or incorrect. Many of them were true a few years ago but are no longer true today. Here are just a few:

Myth #1 – Buyer demand is declining. This was true in 2022 and 2023 but is no longer true today. While mortgage rates have knocked many buyers out of the game, buyer demand is now stable and following last year’s trend with little reaction to rate fluctuations.

Myth #2 – There is very little to buy under $300K. This was definitely true a few years ago, but not today. In February 2022, there were only 90 single family listings active for sale under $300,000 in Maricopa and Pinal County. Today, there are 534, mostly in Pinal County. Condo and townhome inventory is even more abundant by comparison. In March 2022, there were only 156 active condo/townhome listings while today there are more than 1,200, all of which are in Maricopa County.

Myth #3 – My income is too high to qualify for any homebuyer assistance programs. Some grant and downpayment assistance programs correlate to an area, not income. Many have income limits as high as $150,000/year and some don’t have income limits at all. Putting in the research and finding a qualified loan officer to explain these programs could save thousands of dollars.

Myth #4 – I need to be a first-time homebuyer or renter to qualify for homebuyer assistance programs. In most cases, this is not true. They may say first-time home buyer, but if you haven’t owned a home in 3 years or more, you’re a first-time home buyer once again according to HUD’s definition. Also, if you’ve only ever owned a home with a spouse, have a child, and are now divorced, you are also a first-time home buyer. Or, if you’ve only ever owned a mobile home. These are just 3 of the 5 HUD definitions for first-time homebuyer.

Myth #5 – Mortgage rates are too high, there’s nothing to be done about it.
57% of January sales between $200,000-$600,000 involved seller-paid incentives, most went towards a temporary buydown of the mortgage rate, and many home builders are providing permanent rate buydowns. Other sellers have FHA or VA loans that are assumable with rates below 5%. In fact, about 10% of all active listings fit this criteria. Some buyer assistance programs even allow grant money to buy down mortgage rates. Again, a little research goes a long way in hacking the affordability issues caused by mortgage rates.

Myth #6 – Housing is in a bubble and home prices are on the precipice of a crash. One could argue that Greater Phoenix already had a bubble and price crash in 2022 when prices rose to their peak by May and declined a whopping 12.3% from May to December that year, with short-term flip investors taking the brunt of the pain. Since then, prices bounced and stabilized with most price ranges seeing less than 2% appreciation year over year today. That is less than the current rate of inflation, and what is expected after nearly a year in a buyer-leaning market. While Greater Phoenix is officially in a buyer’s market, it’s very mild. Under these conditions, sale price measures are showing most non-luxury buyer negotiations at approximately 1.9% below the last list price. That’s a huge improvement over 2022 where sales prices were averaging 2.4% OVER list price. Prices are declining in some areas, but not all, and not by leaps and bounds. Current supply and demand indexes do not support massive declines in sales prices, but shaving 1-2% off lower list prices during negotiations is not out of the question. Sellers are not pushing the market with outrageous list prices. In fact, most are in line or even below last year in some price ranges.

Myth #7 – I’ll sell my home “as-is” and price it aggressively with buyer incentives. This worked in the mild seller’s market of 2023 and first part of 2024, but not now. In a buyer’s market, it’s okay to sell your home “as-is” so long as it “is” in excellent condition. The hierarchy of importance isn’t price first, then buyer incentives, then condition. It’s condition AND price, the importance of additional incentives depends on your area and price range. When everyone is offering low prices and buyer incentives, properties in good condition rise to the top.

Commentary by Tina Tamboer, Senior Housing Analyst with The Cromford Report.

Selling • February 11, 2025

A Record Percent of Buyers Are Planning To Move in 2025

by Shawn Keane

This could be the year to sell your house – and here’s why. According to a recent NerdWallet survey, 15% of people are planning to buy a home this year. That’s actually a record high for this survey (see graph below):

Here’s why this is such a big deal. The percentage has been hovering between 9-11% since 2020. This recent increase shows buyer demand hasn’t disappeared – if anything, it indicates there’s pent-up demand ready to come back to the market.

That doesn’t mean the floodgates are opening and that there’s going to be a huge wave of buyers like we saw a few years ago. But this does signal there’ll be more activity this year than last.

At least some of the buyers who put their plans on hold over the past few years will jump back in. Whether they’re feeling more confident about moving, they’ve finally saved up enough to buy, or they simply can’t wait any longer – this is the year they’re aiming to take the plunge.

And, according to that same NerdWallet survey, more than half (54%) of those potential buyers have already started looking at homes online.

That’s a good indicator that a number of these buyers will be looking during the peak homebuying season this spring. So, if you find the right agent to make sure your house is prepped, priced, and marketed well, you can get your house in front of them.

Bottom Line

More people are going to move this year, and with the right strategy, you can make sure your house is one of the first they look at.

What do you think these buyers will love most about your house?

Let’s talk it over and make sure it’s front and center in your listing.

My Monthly Market Summary • February 8, 2025

Market Summary for the Beginning of February 2025

by Shawn Keane

Market Summary for the Beginning of February

Hello…

Here are the basics – the ARMLS numbers for February 1, 2025 compared with February 1, 2024 for all areas & types:

Active Listings: 22,432 versus 15,574 last year – up 44% – and up 12.1% from 20,007 last month
Under Contract Listings: 7,403 versus 7,423 last year – down 0.3% – but up 35% from 5,496 last month
Monthly Sales: 4,677 versus 4,435 last year – up 5.5% – but down 16.3% from 5,585 last month
Monthly Average Sales Price per Sq. Ft.: $314.24 versus $288.70 last year – up 8.8% – and up 3.6% from $303.43 last month (see below)
Monthly Median Sales Price: $453,500 versus $430,000 last year – up 5.5% – and up 0.8% from $450,000 last month

There were 21 working days in both January 2025 and January 2024, so we do not need to make adjustments based on working days.

There is significant bad news for sellers in the active listing counts. An increase of over 12% is the last thing they need, as the limited pool of buyers has plenty of choice already. Last year we saw an increase of only 7%. The good news is that closings were up 5.5% compared to a year ago and under contract listings are down only 0.3%. However sellers would have liked to see stronger growth in listings under contract. They were up 45% over the month of January in 2024 and up only 35% in 2025.

In contrast the news on pricing is deceptively good. The average price per sq. ft. has risen a colossal 8.4% over the past 2 months and 8.8% over the past year. Almost all the annual increase has happened in the last 2 months. This news is accurate mathematically, but needs to be treated with extreme caution. The top end of the market has been on fire over the last 2 months with closed sales up dramatically compared with a year earlier. The higher up the price range you go, the more startling the increase in sales volumes.

We have seen 142 closings of $3 million or more in the last 2 months with an average price of $864 per sq. ft.

In the same period a year ago we saw only 92 closings of $3 million or more with an average price of $801 per sq. ft.

We have seen 35 closings of $6 million or more in the last 2 months with an average price of $1,047 per sq. ft.

In the same period a year ago we saw only 9 closings of $6 million or more with an average price of $1,074 per sq. ft.

Note that

The average price per sq. ft. for these high-end homes is far above those of the rest of the market
The number of closings over $6 million is up by an astonishing 289%.

This small number of closings has an out-sized effect on the overall average price for the market as well as the average price per square foot. It has only a tiny effect on the median sales price. In these circumstances the median sales price is a much more accurate indicator of price movements for the bulk of the market. The monthly median sales price has barely moved over the last 3 months. Although it bumped up to $453,500 on Feb 1, it is back down to $450,000 again today.

Although interest rates are off their heights, the key 30-year fixed rate is still a little over 7% and the Federal Reserve has little appetite for further cuts. At this stage, there seems to be more chance that buyers will have to get used to these rates than there is of rates coming down significantly. We therefore expect demand to stay subdued and supply to continue to rise, though perhaps not as strongly as it did in January.

It is good to see the contract ratio move from the 20s into the 30s, with a reading of 33 at the start of February. However this is still very weak compared with the 47.7 we measured on February 1, 2024. The Cromford®Market Index is in a slow falling pattern which is likely to persist during February. There is nothing obvious in the near term to disturb that trend. There is a wide difference in market balance between the cheaper and more far-flung areas of the valley and the more expensive areas closer to Phoenix itself. Meanwhile, the high-end market will continue to be a law unto itself, but it has almost no impact on the market below $1 million. There is no trickle-down effect here. High-end buyers pay little attention to mortgage rates and are influenced more heavily by how their stocks and other investments are performing. If the stock market and/or crypto markets were to cool, then this may take some wind out of the sails for the housing market over $3 million. If they don’t cool then the top-end housing market probably won’t slow down either. We should remember that expensive homes have much more tangible value than many investments that exist only in the digital world, but they are not totally immune to volatility. Cromford Report

For the latest information, please visit my website. You’ll find a daily blog, monthly reports, and seller and buyer guides. Don’t forget to sign up for Neighborhood News, the best way to stay connected with what’s happening in the real estate market in your area. You can view homes that are currently for sale and those that have recently sold. Discover whether home sales in your neighborhood are trending upwards or downwards, and check current selling prices for homes nearby. You can also search real-time listings in any market area using the “SEARCH FOR HOMES” feature.

Feel free to call me for a free buyer or seller consultation.

The 3 Biggest Mistakes Sellers Are Making Right Now

If you want to sell your house, having the right strategies and expectations is key.

Continue Reading

Buying • February 3, 2025

3 Reasons To Buy a Home Before Spring

by Shawn Keane

3 Reasons To Buy a Home Before Spring

Let’s face it — buying a home can feel like a challenge with today’s mortgage rates. You might even be thinking, “Should I just wait until spring when more homes hit the market and rates might be lower?”

But here’s the thing, no one knows for sure where mortgage rates will go from here, and waiting could mean facing more competition, higher prices, and a lot more stress.

What if buying now — before the spring rush — might actually give you the upper hand? Here are three reasons why that just might be the case.

1. Less Competition from Other Buyers

The winter months tend to be quieter in the real estate market. Fewer people are actively looking for homes, which means you’ll likely face less competition when you make an offer. This makes the process feel less rushed and less stressful.

According to the National Association of Realtors (NAR), homes sit on the market longer in winter compared to spring and summer (see graph below):

Fewer buyers in the market means you’ll likely have more time to make thoughtful decisions. It also means you may have more negotiating power. According to the Alabama Association of Realtors:

“A significant benefit of buying a home in winter is the reduced competition. Because of the perceived benefits of spring, many buyers delay the start of their house hunt. As a result, you will find fewer people competing for the same properties during winter. Less demand can translate into more negotiating power as sellers may be more willing to entertain offers or agree to concessions to get a deal closed quickly.”

2. More Negotiating Power

With homes staying on the market longer, sellers may be more willing to negotiate. This can lead to better deals for you as a buyer, whether that means a lower price or added incentives, like sellers covering closing costs or making repairs. As Chen Zhao, an Economist at Redfin, points out:

“. . . buying during the off season means less competition from other buyers. That means potentially negotiating a better deal.”

Plus, when demand is lower, sellers often feel more pressure to work with serious buyers. This could give you an edge to negotiate terms that work best for your situation.

3. Lock in Today’s Prices Before They Rise

Historically, home prices tend to be at their lowest point in the winter months, too. According to data from NAR, home prices last year were at their lowest in January, February, and March — right before the spring buying season kicked in (see graph below):

This trend isn’t new — Bright MLS shows between 2010 and 2024, home prices in January and February were, on average, 15% lower than during the month of peak home prices (typically June). Buying in the off-season means you’re more likely to avoid paying the premium prices that come with the high demand of spring.

On top of that, home prices generally appreciate over time, meaning they tend to go up year after year. That means if you’re ready to buy and you can make it happen, you’re not only taking advantage of what might be the lowest prices of the year, but you’re also locking in today’s price before it increases in the future.

Bottom Line

While spring may seem like the obvious time to buy, moving before the peak season can give you significant advantages, like less competition, more negotiation power, and lower prices.

If you’re ready to explore your options, let’s connect.

Buying • February 3, 2025

Two Resources That Can Help You Buy a Home Right Now

by Shawn Keane

Two Resources That Can Help You Buy a Home Right Now

A recent report from Realtor.com says 20% of Americans don’t think homeownership is achievable. Maybe you feel the same way. With inflation driving up day-to-day expenses, saving enough to buy your first home is more of a challenge. But here’s the thing. With the right resources and help, you can still make it happen.

There are options that can help make buying a home possible today — even if your savings are limited or your credit isn’t perfect. Let’s explore just two of the solutions that could help get you into your first home no matter the market.

1. FHA Loans

If your down payment savings and your credit score aren’t where you want them to be, an FHA loan could be your pathway to buying a home. According to the U.S. Department of Housing and Urban Development (HUD) and Bankrate, the big perks of an FHA home loan are:

Lower Down Payments: They typically require a smaller down payment than conventional loans, sometimes as low as 3.5% of the home’s purchase price.
Lower Credit Score Requirements: They’re designed to help buyers with credit scores that might not qualify for conventional financing. This means, when conventional loans aren’t an option, you may still be able to get an FHA loan.

The first step is to connect with a lender who can help you explore your options and determine if you qualify.

2. Homeownership Assistance Programs

And if you need a more budget-friendly down payment, that’s not your only option. Did you know there are over 2,000 homeownership assistance programs available across the U.S. according to Down Payment Resource? And more than 75% of these programs are designed to help buyers with their down payment. Here’s a bit more information about why these could be such powerful tools for you:

Financial Support: The average benefit for buyers who qualify for down payment assistance is $17,000. And that’s not a small number.
Stackable Benefits: To make it even better, in some cases, you may be able to qualify for multiple programs at once, giving your down payment an even bigger boost.

Rob Chrane, CEO of Down Payment Resource confirms a little-known fact:

“Some of these programs can be layered. And so, in other words, you may not be limited to just one program.”

If you want to learn more or see what you qualify for, be sure to lean on the pros. A trusted real estate agent and a lender can guide you through the process, explain the help that’s out there, and connect you with resources to make buying a home a reality.

Bottom Line

If you’re ready to stop wondering if buying a home is possible and start exploring solutions, let’s connect.

Selling • February 3, 2025

The Secret To Selling? Using an Agent To Get Your House Noticed

by Shawn Keane

The Secret To Selling? Using an Agent To Get Your House Noticed

In a recent survey, the National Association of Realtors (NAR) asked sellers what they want most from a real estate agent. The number one answer was to help market their house.

It makes sense. The way your agent markets your house can be the difference between whether or not it stands out and gets attention from buyers. That’s why it’s so important to work with an expert local agent that knows what they’re doing.

According to that same report from NAR, here are some of the most common methods real estate agents use to market homes, and how you benefit when your agent uses them effectively (see graph below):

Listing on the MLS – Real estate agents have access to the Multiple Listing Service (MLS) database. And that’s great for you because having your house on the MLS helps it get more visibility from other agents and buyers. And the more people who see it, the more likely it is to sell.
Using a Yard Sign – A yard sign may seem simple, but it’s one of the best ways to catch the attention of people driving or walking by. And when it does, they’ll help spread the word to friends and family who are looking to buy that there’s a house for sale in the area. It also puts your agent’s contact information on display, making it easy for interested buyers to get in touch.
Having an Open House – An open house is a great way to create a sense of competition and urgency among buyers – and that can lead to stronger offers. And since you’ll only need to leave once for many buyers to visit, it makes the process easier for you, too. Plus, an open house helps your agent get real-time feedback about what buyers love and what they’re not as sold on.
Showcasing on Your Agent’s Website – Having your house on your agent’s website presents it in a professional way to buyers. And odds are, people visiting your agent’s website are serious and ready to make a move, so this is a smart way to get in front of motivated buyers.
Social Networking – Posting your house on social helps get your house in front of buyers who may not have seen it with traditional marketing. It also makes it easy for people to share your listing with friends and loved ones.
Providing Virtual Tours – For buyers who are relocating from out of town, virtual tours allow them to check out your house anytime from wherever they are. This helps reach more potential buyers who may not be able to come to see your house in person.
Using Video – Video is an excellent way for your agent to show off some of the top features of your house like your kitchen, large closets, outdoor entertainment areas, and other key details that could attract buyers.
Sending Emails – Sending out information about your house to your agent’s expansive database is another way they’ll get it in front of even more people. Great agents may even send emails teasing that your house is coming to the market as a way to boost interest and excitement before it officially has an open house.

Here’s what it comes down to. Most good agents will write a description of your house for the listing and pair it with high-quality photos. But a great agent will do so much more than that.

They’ll not only lean on their expertise, they’ll put in the time and effort to make sure your house makes an impression on buyers, and ultimately, sells.

Bottom Line

As a seller, working with a creative local real estate agent is a smart way to ensure your house grabs the attention of the right buyers. If you’re ready to sell and want to talk about strategies we can use to get your house sold, let’s chat.

Uncategorized • January 21, 2025

When Is the Perfect Time To Move?

by Shawn Keane

When Is the Perfect Time To Move?

It’s easy to get caught up in the idea of waiting for the perfect moment to make your move – especially in today’s market. Maybe you’re holding out and hoping mortgage rates will drop, or that home prices will fall. But here’s what you need to realize: trying to time the market rarely works. And here’s why.

There is no perfect market.

No matter when you buy, there’s always some benefit and some sort of trade-off – and that’s not a bad thing. That’s just the reality of it. If you’re not sure you buy into that, think back to the last 5 years in housing.

Just a few years ago, mortgage rates hit a historic low. To take advantage of that, a ton of buyers rushed to buy a home and lock in those lower rates. The side effect? With such a big increase in how many buyers were purchasing, the homes on the market were snapped up fast. And since that resulted in so few homes left for sale, bidding wars became the norm and home prices went through the roof. Those buyers got a great rate, but they had other things to contend with.

Now, with higher rates and higher prices, it’s more expensive to buy. You can’t argue that. But at the same time, the number of homes for sale is at the highest point in several years. That means you have more options to choose from and you’ll be less likely to find yourself in a pull-out-all-the-stops bidding war. Again, there are benefits and trade-offs in any market.

So, if you have a reason to move and can afford to do so, you’ve got to take advantage of the trends that work in your favor and lean on a pro to help you navigate the rest. As Bankrate says:

“The complexities of the current conditions mean that, now more than ever, it’s smart to lean on the guidance of an experienced local real estate agent. If you want to enter the housing market in 2025, whether as a buyer or a seller, let a pro lead the way for you.”

While achieving your goals may feel like an uphill battle in today’s complex market, it is doable. But you’ll need the help of a trusted real estate agent and a lender.

Your agent will help you explore creative solutions – like looking into different housing types (like smaller condos), considering homes that need a little elbow grease, or casting a wider net for your search area. And your lender will walk you through different loan options and down payment assistance programs, so you know what you need to do to make the numbers work for you. As Yahoo Finance says:

“Buying a house at a time when both mortgage rates and home prices are favorable is a challenge. You probably shouldn’t try to time the housing market . . . Buy when it makes sense for you personally.”

Bottom Line

There’s no perfect time to move – every market has its pros and cons. The key is knowing how to make the most of the factors working in your favor. If you need to move and can afford to do it, let’s connect so you’ll have the guidance and tools to make it possible.

Markets • January 18, 2025

Mid Jan 2024 Market Update

by Shawn Keane

For Buyers and Sellers, the good and the bad:

Buyer’s season has begun and new listings for January are the strongest Greater Phoenix has seen since 2020. New listings waned in November and December, so this rebound is a refreshing start for buyers in 2025 as supply is rising and sellers continue to be open to incentives and negotiations.

Hovering around 7.25%, mortgage rates continue to limit the general buyer pool. Currently, just over 5,600 listings are under contract in the MLS, but normally we expect to see at least 7,000-8,000 at this time of year. On the other hand, supply is around 21,000, the highest entry point for January since 2016-2017, fostering an environment favorable towards qualified buyers.

These conditions suggest home price projections should remain flat, either at or slightly lower than the rate of inflation annually. However, December price measures were significantly higher than the rate of inflation with a +4.7% growth in the median sales price and +6.7% for price per square foot. How can this be? Well, blame it on the luxury market.

Mortgage rates suppress buyers on the low end of the price scale, but don’t affect those on the high end. As crypto and stock investments spiked after the 2024 election, luxury sales over $1M over surged +37% over last December compared to just +11% for homes under $1M. This caused December’s data set to be more top heavy in luxury and skewed price appreciation measures high.

When December sales over $1M are eliminated, the annual appreciation rate per square foot falls from 6.7% to just 2.5%, in line with the rate of inflation. This is expected in a market that bounced between a buyer’s market and balance for most of the year. While mortgage rates are not ideal, they are temporary. Prices are stable, incentives abound, and sellers are negotiable. There’s no harm in getting qualified and taking a look.

For Sellers:

January is starting off pretty frigid overall, but not for everyone. When taking a broad look at Greater Phoenix, the gap between supply and demand can seem insurmountable. However, specific target price ranges and areas are lighting up the map with heated activity.

For example, the West Valley lights up in the first-time home-buyer price ranges between $250K-$400K, specifically Surprise, Waddell, Avondale, Tolleson, and Southwest Phoenix as high builder incentives combat affordability issues. Also lighting up with frenzy activity in this range is Mesa (85204), North Gilbert, and Chandler (85226).

The Southeast Valley heats up in the $400K-$500K range, as does Tolleson and North Glendale.

Luxury condo sales over $1.5M are insanely popular in Scottsdale 85251, 85255 and Paradise Valley. However, the condo market in general is under the most stress with many areas seeing zero contract activity and a 67% increase in competing supply under $400K. Condos between $300K-$500K and $600K-$800K rose in value from January-April last year, but those gains disappeared from April-December*. They are now starting 2025 dead even with January 2024 at 0% appreciation.

Homeowners insurance is going to be a major topic this year, especially for the condo market as many HOAs can no longer shoulder the extra costs without raising dues. More landlords facing increased insurance costs, HOA fees, and lower rents on apartment-style condos are experiencing lower returns and looking for an exit strategy.

As the housing market enters its high season, things will look up for sellers from now through May. How much contract activity lights up depends mostly on mortgage rates, however. Until then, sellers must continue to offer high incentives to buy down rates, keep their properties in top condition to compete, and resist the urge to press the market on price.

Source Cromford Report

Mortgage Interest Rate Projections for this Year:

Conservative Estimates: Some analysts expect rates to settle around 5% to 6% by if inflation remains manageable and economic conditions stabilize.
Pessimistic Projections: If inflation or economic uncertainty remains a concern, rates could stay closer to 6% to 7% for much of 2025.

Summary of Projections for 2025:

Lawrence Yun (NAR): ~5.5% to 6%
Selma Hepp (CoreLogic): ~5.5% (mid-year)
Greg McBride (Bankrate): ~5% to 5.5%
Danielle Hale (Realtor.com): ~5.5% to 6%

These experts generally agree that mortgage rates will likely ease over the course of 2025, but how much they drop depends heavily on the trajectory of inflation, the Federal Reserve’s policy actions, and overall economic conditions.

I’m in the camp that rates will be in the range of 5.75% to 6.25%. 5.5% is the best-case scenario, no lower.

I am excited to continue serving you and your real estate needs.

Buying • January 18, 2025

One Homebuying Step You Don’t Want To Skip: Pre-Approval

by Shawn Keane

One Homebuying Step You Don’t Want To Skip: Pre-Approval

There’s one essential step in the homebuying process you may not know a whole lot about and that’s pre-approval. Here’s a rundown of what it is and why it’s so important right now.

What Is Pre-Approval?

Pre-approval is like getting a green light from a lender. It lets you know how much they’re willing to let you borrow for a home. To determine that number, a lender looks at your financial history. According to Realtor.com, these are some of the documents a lender may ask you for during this process:

W-2s from the last two years
Tax returns from the last two years
Pay stubs from the last 30 days
Bank statements from the last 60 days
Investment account statements (if applicable)
Two years of history of where you’ve lived

The result? You’ll get a pre-approval letter showing what you can borrow. Keep in mind, that any changes in your finances can affect your pre-approval status. So, after you receive your letter, avoid switching jobs, applying for new credit cards or other loans, or taking out large sums of money from your savings.

How It Helps You Determine Your Borrowing Power

This year, home prices are expected to rise in most places and mortgage rates are still showing some volatility. So, since affordability is still tight, it’s a good idea to talk to a lender about your home loan options and how today’s changing mortgage rates will impact your future monthly payment.

The pre-approval process is the perfect time for that. Because it determines the maximum amount you can borrow, pre-approval also helps you figure out your budget. You should use this information to tailor your home search to what you’re actually comfortable with as far as a monthly mortgage payment. That way, you don’t fall in love with a house that’s out of your comfort zone.

How It Helps You Stand Out

Once you find a home you want to put an offer on, pre-approval has another big perk. It not only makes your offer stronger, it shows sellers you’ve already undergone a credit and financial check.

When a seller sees you as a serious buyer, they may be more attracted to your offer because it seems more likely to go through. As Greg McBride, Chief Financial Analyst at Bankrate, says:

“Preapproval carries more weight because it means lenders have actually done more than a cursory review of your credit and your finances, but have instead reviewed your pay stubs, tax returns and bank statements. A preapproval means you’ve cleared the hurdles necessary to be approved for a mortgage up to a certain dollar amount.”

Bottom Line

If you’re planning on buying a home, getting pre-approved for a mortgage should be one of the first things on your to-do list. Not only will it give you a better understanding of your borrowing power, it can put you in the best position possible to make a strong offer when you find a home you love. Connect with a trusted lender to learn more.

Coldwell Banker - North Scottsdale

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