State of the Housing Market

Faith & Finance

Is it the best of times or the worst of times? Well, it all depends on if you’re trying to buy or sell a house.

It really is a matter of perspective. Home values remain sky-high and are likely to continue rising in the foreseeable future. How you view that depends on which side of the transaction you’re on.

Navigating the Current Housing Market: Tips for First-Time Home Buyers

It may be the worst of times if you're a first-time home buyer. Home values have never been higher, thanks to the continued high cost of building materials, inflation, and low inventory. Coupled with mortgage rates of around 7%, buying your first home is undeniably an uphill battle.

Moving Up in the Market

If you're moving up—selling a starter home and buying one that fits your current needs—the situation is slightly different. While your dream house is more expensive, so is the house you're selling, which helps offset high home values. However, higher interest rates have many prospective home sellers sitting on the sidelines, waiting for rates to drop. This results in fewer homes on the market, driving up prices even more.

Downsizing: A Silver Lining

For those downsizing, it truly is the best of times. You can sell a larger, more expensive home, pay off any existing mortgage, and be mortgage-free in your new, smaller home. This transition can leave you with a sizable nest egg for future needs.

Market Trends and Predictions

The housing market has always been influenced by these factors, but they are currently exaggerated by inflation and rising prices. Recent data shows a 6.5% increase in home values over the past year. Analysts predict that while home prices will continue to rise, the growth rate will begin to slow.

Steps to Take if You’re Buying a Home

1. Check Your Credit Reports—First, obtain all three credit reports from Experian, TransUnion, and Equifax for free at AnnualCreditReport.com. Review them carefully and dispute any errors to boost your credit score, which will help you secure the lowest possible interest rate on your mortgage.
   
2. Consult a Mortgage Loan Officer—Meet with a mortgage loan officer for guidance on the loan application and approval process. During the first visit, you don’t need to provide your personal financial information, but you should ask about programs for first-time home buyers.
   
3. Assess Your Borrowing Capacity—Eventually, you’ll need to share your financial details with a loan officer to determine your debt-to-income ratio and how much you can borrow. Avoid borrowing the maximum amount the lender offers, as this can strain your budget. Aim to keep your mortgage payments within 25% of your take-home pay.
   
4. Save for a Down Payment—Assemble the largest down payment you can. Putting down 20% helps you avoid private mortgage insurance, which costs around 1% of the loan amount annually. Reserve a few thousand dollars for unexpected expenses when you move in, avoiding reliance on credit cards.
   
5. Get Pre-Approved—Shop around for the best interest rate and mortgage provider. Pre-approval strengthens your position as a buyer and helps streamline the home-buying process.

A Mortgage with a Purpose

Consider working with Movement Mortgage, a Christian mortgage company founded during the 2008 housing crisis. They offer competitive rates and a chance to contribute to a global movement of change. Movement Mortgage has donated $377 million to community projects and has locations in all 50 states. Learn more at Movement.com/Faith.

Finding Your New Home

Make a list of essential features for your new home and connect with a knowledgeable real estate agent. Keep your list of “must-haves” short to stay flexible in this strong seller’s market.

If possible, wait until winter to make an offer. Buyer competition typically decreases during colder months, giving you an edge.

That's the current state of the housing market and a few tips to help you navigate it. We hope these insights and strategies assist you in your home-buying journey.

On Today’s Program, Rob Answers Listener Questions:

• How do I determine my tithe amount when liquidating a portion of my long-term investment holdings, which include stocks and bonds? Sometimes, the investment shows a slight increase over the principal in a year, but other times, there is a loss. I would like to know how to calculate my tithe since I wouldn't be cashing out the whole investment.
• Should I move some of my precious metals into my IRA, which I want to diversify into, or should I keep them at home where I can physically possess them? I'm particularly interested in silver since gold is quite expensive.
• Is making a living off the interest from my IRA investments through a financial advisor considered evil according to passages in the Bible that prohibit putting out money at interest or getting interest from my investments?
• Would an irrevocable trust be taxable after death, or would it just go back to the will already in place? How do the taxes work with an irrevocable trust if the original owner dies?

Resources Mentioned:

• Movement Mortgage
• AnnualCreditReport.com
• Rich Toward God: A Study on the Parable of the Rich Fool
• Find a Certified Kingdom Advisor (CKA) or Certified Christian Financial Counselor (CertCFC)
• FaithFi App

Remember, you can call in to ask your questions most days at [phone]. Faith & Finance is also available on the Moody Radio Network and American Family Radio. Visit our website at FaithFi.com where you can join the FaithFi Community and give as we expand our outreach.