Mohammed Salim Shaikh (Realtor, Corona)

A Drop in Equity Doesn't Mean Low Equity You may see media coverage talking about a drop in homeowner equity. What's important to understand is that equity is tied closely to home values. So, when home prices appreciate, you can expect equity to grow. And when home prices decline, equity does too. Here's how this has played out recently.  Home prices rose rapidly during the 'unicorn' years . That gave homeowners a considerable equity boost. But those 'unicorn' years couldn't last forever. The market had to moderate at some point, and that's what we saw last fall and winter.  As home prices dropped slightly in the back half of 2022, equity was impacted. Based on the most recent report from CoreLogic , there was a 0.7% dip in homeowner equity over the last year. However, the headlines reporting on that change aren't painting the whole picture. The reality is, while home price depreciation during the second half of last year caused equity to drop,...

Your Needs Matter More Than Today's Mortgage Rates If you're thinking about selling your house right now, chances are it's because something in your life has changed. And, while things like mortgage rates are a key part of your decision on what you'll buy next, it's important to not lose sight of the reason you want to make a change in the first place. It's true mortgage rates have climbed from the record lows we saw in recent years, and that has an impact on affordability . With rates where they are right now, some homeowners are deciding they'll wait to sell because they don't want to move and have a higher mortgage rate on their next home. As Danielle Hale, Chief Economist at Realtor.com , explains : ". . . homeowners who locked in a 30-year fixed rate in the 2-3% range don't necessarily want to give that up in exchange for a rate in the 6-7% range." But your lifestyle and your changing needs should matter more. Here are a few of the ...

Are Home Prices Going Up or Down? That Depends… Media coverage about what's happening with home prices can be confusing. A large part of that is due to the type of data being used and what they're choosing to draw attention to. For home prices, there are two different methods used to compare home prices over different time periods: year-over-year (Y-O-Y) and month-over-month (M-O-M). Here's an explanation of each.  Year-over-Year (Y-O-Y): This comparison measures the change in home prices from the same month or quarter in the previous year. For example, if you're comparing Y-O-Y home prices for April 2023, you would compare them to the home prices for April 2022. Y-O-Y comparisons focus on changes over a one-year period, providing a more comprehensive view of long-term trends. They are usually useful for evaluating annual growth rates and determining if the market is generally appreciating or depreciating. Month-over-Month (M-O-M): This comparison measures the change i...

Why You Can't Compare Now to the 'Unicorn' Years of the Housing Market [INFOGRAPHIC] Some Highlights Comparing housing market metrics from one year to another can be challenging in a normal housing market – and the last few years have been anything but normal. In a way, they were ' unicorn ' years. Expect unsettling housing market headlines this year, mostly due to unfair comparisons with the 'unicorn' years . Let's connect so I can share the data that puts those headlines in the proper perspective .

This Real Estate Market Is the Strongest of Our Lifetime When you look at the numbers today, the one thing that stands out is the strength of this housing market. We can see this is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime. Here are two fundamentals that prove this point.  1. The Current Mortgage Rate on Existing Mortgages First, let's look at the current rate on existing mortgages. According to the Federal Housing Finance Agency ( FHFA ), as of the fourth quarter of last year, over 80% of existing mortgages have a rate below 5%. That's significant. And, to take that one step further, over 50% of mortgages have a rate below 4% ( see graph below ): Now, there's a lot of talk in the media about a potential foreclosure crisis or a rise of homeowners defaulting on their loans, but consider this. Homeowners with such good mortgage rates are going to work as hard as they can to keep that mortgag...

The Main Reason Mortgage Rates Are So High Today's mortgage rates are top-of-mind for many homebuyers right now. As a result, if you're thinking about buying for the first time or selling your current house to move into a home that better fits your needs, you may be asking yourself these two questions:  Why Are Mortgage Rates So High? When Will Rates Go Back Down? Here's context you need to help answer those questions. 1. 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). According to Investopedia :  "Mortgage-backed securities (MBS) are investment products similar to bonds. Each MBS consists of a bundle of home loans and other real estate debt bought from the banks that issued them . . . The investor who buys a mortgage-backed security is essentially lending money to home buyers." Demand for MBS helps determine the spread between the 10-Year Treasury Yield and th...

Real Estate Is Still Considered the Best Long-Term Investment With all the headlines circulating about home prices and rising mortgage rates , you may wonder if it still makes sense to invest in homeownership right now. A recent poll from Gallup shows the answer is yes. In fact, real estate was voted the best long-term investment for the 11 th consecutive year, consistently beating other investment types like gold, stocks, and bonds ( see graph below ): If you're thinking about purchasing a home , let this poll reassure you. Even with everything happening today, Americans recognize owning a home is a powerful financial decision. Why Do Americans Still Feel So Positive About the Value of Investing in a Home? Purchasing real estate has typically been a solid long-term strategy for building wealth in America. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), notes : ". . . homeownership is a catalyst for building wealth for people from all walks...

Oops! Home Prices Didn't Crash After All During the fourth   quarter of last year, many housing experts predicted home prices were going to crash this year. Here are a few of those forecasts: Jeremy Siegel , Russell E. Palmer Professor Emeritus of Finance at the Wharton School of Business : "I expect housing prices fall 10% to 15%, and the housing prices are accelerating on the downside." Mark Zandi , Chief Economist at Moody's Analytics : "Buckle in. Assuming rates remain near their current 6.5% and the economy skirts recession, then national house prices will fall almost 10% peak-to-trough. Most of those declines will happen sooner rather than later. And house prices will fall 20% if there is a typical recession."   Goldman Sachs :  "Housing is already cooling in the U.S., according to July data that was reported last week. As interest rates climb steadily higher, Goldman Sachs Research's G-10 home price model suggests  home prices will decline by...

Reasons To Own Your Home [INFOGRAPHIC] Some Highlights June is National Homeownership Month, and it's a perfect time to think about all the benefits that come with owning your home. Owning a home not only makes you feel proud and accomplished, but it's also a big step toward having a secure and stable financial future. Are you ready to enjoy all the amazing advantages that come with owning a home? Let's get in touch to start the process today.

The True Value of Homeownership Buying and owning your home can make a big difference in your life by bringing you joy and a sense of belonging. And with June being National Homeownership Month, it's the perfect time to think about all the benefits homeownership provides.  Of course, there are financial reasons to buy a house, but it's important to consider the non-financial benefits that make a home more than just where you live. Here are three ways owning your home can give you a sense of accomplishment, happiness, and pride.   You May Feel Happier and More Fulfilled  Owning a home is associated with better mental health and well-being. Gary Acosta, CEO and Co-Founder at the National Association of Hispanic Real Estate Professionals (NAHREP), explains : "Studies have shown the emotional and psychological benefits that homeownership has on a person's health and self-esteem . . ." Similarly, Habitat for Humanity says : "Residential stability among homeowne...