August Residential Highlights
Inventory and Total Market Time:
Year to Date Summary:
Average and Median Sale Prices:
“Homeownership is one of the indicators Americans say is least connected to financial health."
Two major personal wealth goals – homeownership and net worth – work hand-in-hand. Below are just a few reasons why, if you’re looking for financial security, homeownership should be a top priority.
Homeownership Is an Important Cornerstone of Building Wealth
Every three years, the Federal Reserve releases the Survey of Consumer Finances which highlights the difference in wealth between homeowners and renters. The graph below shows the findings across the previous surveys including the latest data (2019), and the results are staggering:
As the graph illustrates, the gap between homeowners and renters continues to widen. That’s because homeownership contributes massively to an individual’s overall net worth. Odeta Kushi, Deputy Chief Economist at First American, highlights this idea:
“. . . between 2016 and 2019, housing wealth was the single biggest contributor to the increase in net worth across all income groups . . . .”
When we look even closer at the most recent data from 2019, the average homeowner’s net worth is more than 40 times greater than that of the average renter (see graph below):
The gap exists in large part because homeowners build equity as their home appreciates in value and they pay off a portion of their mortgage each month. When you own your home, your monthly mortgage payment is, in essence, forced savings that come back to you when you sell your home or refinance. As a renter, you’ll never see a return on the money you pay out in rent every month.
If you’re ready to start building your net worth, the current real estate market offers several opportunities you should consider. For example, with today’s low mortgage rates, your purchasing power may be higher now than it has been in some time. That means there may be no better time than now to start working towards your homeownership goals – especially since rates are anticipated to rise in the coming months.
Owning a home provides one of the strongest foundations for building individual wealth and lasting financial security. If you’re ready to start your path towards homeownership, let’s connect today.
As rent prices continue to soar, many renters want to know what they can do to get ready to buy their first home. According to recent data from ApartmentList.com:
“The first half of 2021 has seen the fastest growth in rent prices since the start of our estimates in 2017. Our national rent index has increased by 11.4 percent since January . . . .”
Those rising rental costs may make it seem impossible to prepare for homeownership if you’re a renter. But the truth is, there are ways you can – and should – prepare to purchase your first home. Here’s some expert advice on what to do if you’re ready to learn more about how to escape rising rents.
Experts agree, setting aside what you can – even smaller amounts of money – into a dedicated savings account is a great starting point when it comes to saving for a down payment. As Cindy Zuniga-Sanchez, Founder of Zero-Based Budget Coaching LLC, says:
“I recommend saving for a home in a ‘sinking fund’ . . . . This is a savings account separate from your emergency fund that you use to save for a short or mid-term expense.”
Zuniga-Sanchez adds saving in smaller increments can help make a large goal – such as saving for a down payment –achievable:
“Breaking up your goals into smaller bite-sized pieces by saving incrementally can make a large daunting number more manageable.”
Another tip experts recommend: take a look at your overall finances and credit score and find ways to reduce your debt. According to the HUD, the average credit score of first-time homebuyers is 716. If you’re not sure what your credit score is, there are numerous online tools that can help you check. If your score is below that average, don’t fret. Remember that an average means there are homeowners with credit scores both above and below that threshold.
If you find out your score is below the average, there are several ways to improve your credit before you apply for a loan. HUD recommends reducing your debt as much as you can, paying your bills on time, and using your credit card responsibly.
Finally, it’s important to talk to someone who understands the market and what it takes to become a first-time homebuyer. That’s where we come in. A trusted advisor can help you navigate your specific market and talk you through all the available options. Having the right network of real estate and lending professionals in your corner can help you plan for the homebuying process as well as determine what you can afford and how you can get pre-approved when you’re ready.
Most importantly, we can help you understand how homeownership is achievable. As Lauren Bringle, Accredited Financial Advisor with Self Financial, says:
“Don’t write home ownership off just because you have a low income . . . . With the right tools, resources and assistance, you could still achieve your dream.”
If you’re planning to be a homeowner one day, the best thing you can do is start preparing now. Even if you don’t think you’ll purchase for a few years, meeting with a trusted real estate advisor to understand the process will set you up for success on your journey to homeownership.
There’s a moment when you’re in the market for a property that you must decide it’s time to stop looking and to start buying.
Many folks find this part of their search the most confrontational. But it can be easily avoided by researching the availability of your target style of property in your preferred neighborhoods.
Good research will prevent you from falling into the trap of believing that there’s always one more property to see or that spinning your wheels and waiting will somehow reveal the perfect property.
You also need to avoid the common mistake where if you miss out on a dream home, you use this as your benchmark against which you judge all the other properties – and find them lacking.
Impatience can also cause heartache. Viewing homes for weeks, even months, is pretty tough when you have a busy lifestyle. So, it’s easy to make the wrong decision just to end the pain of the search process and get on with the rest of your life.
As an experienced agent in our neighborhood, I understand how difficult the buying process can be. After all, it’s one of the most important financial decisions of your life with a big emotional element as well.
Here’s how to find your dream home.
June 2021 Market Action Report
RMLS Market Action Report – Portland Real Estate Statistics
June Residential Highlights
New listings (4,298) increased 17.5% from the 3,658 listed in June 2020 and increased 8.2% from the 3,971 listed in May 2021.
Pending sales (3,534) decreased 3.3% from the 3,654 offers accepted in June 2020 and decreased 4.9% from the 3,717 offers accepted in May 2021.
Closed sales (3,477) increased 28.3% from the 2,709 closings in June 2020 and increased 9.2% from the 3,183 closings in May 2021.
Inventory and Total Market Time
Inventory increased to 0.8 months in June. Total market time decreased to 21 days.
Year to Date Summary
Comparing the first six months of 2021 to the same period in 2020, new listings (21,226) increased 11.1%, pending sales (18,291) increased 18.8%, and closed sales (16,272) increased 25.6%.
Average and Median Sale Prices
Comparing 2021 to 2020 through June, the average sale price has increased 20.1% from $468,500 to $562,700. In the same comparison, the median sale price has increased 18.2% from $423,000 to $500,000.
Read all of the latest Portland real estate market statistics in this month’s RMLS Market Action Report.