Millions of Americans Have Discovered the Benefits of Multigenerational Households

Thursday February 3rd, 2022 Demographics, For Buyers

If your needs are changing, you may be thinking about sharing a home with additional loved ones, such as grandparents, adult children, or other extended family members. Whether it’s for financial or health-related circumstances, or simply because you’ve reached a new phase of life, you might be wondering if living with multiple generations under the same roof is a good move for you. Many people have found themselves in a similar situation and they’ve already made the choice to live in a multigenerational home.

What Is a Multigenerational Home?

The Pew Research Center defines a multigenerational household as a home with two or more adult generations. They include households with grandparents and grandchildren under the age of 25. As you weigh your options and decide if multigenerational living is right for you, here’s some helpful information highlighted by other homeowners living with additional loved ones.

The Benefits of Multigenerational Living

A recent report from Generations United surveyed individuals living in a multigenerational setting and asked them about the key benefits of this housing arrangement. It says:

“Nearly all Americans who live in a multigenerational household (98%) feel their household functions successfully, citing various aspects of home design, family relationships and interactions, and supports and services influencing their success.”

The study identifies some of the top benefits of this lifestyle as an improved financial situation, better mental and physical health, strengthened bonds with loved ones, and more (see chart below):

Those are just some of the reasons why most people who decide to live in this situation find it worthwhile. As Donna Butts, Executive Director at Generations United, says:

“Families may come together from need, but they are staying together by choice. Indeed, more than 7 in 10 (72 percent) of those currently living in a multigenerational household plan to continue doing so long-term.”

With More Adults Living Under One Roof, You May Need More Space

If you decide to look for a multigenerational home, it’s important to understand what everyone will need to make the arrangement work to its fullest. Something that often makes the top of the list for homeowners living with multiple generations is additional space for privacy. This could mean more bedrooms and bathrooms or features like an in-law suite or a basement.

If you’re realizing your current house doesn’t provide the room you need for multigenerational living, an expert real estate advisor can help you navigate the process to find the right home that works for you and your loved ones.

Bottom Line

Living in a multigenerational household has real and impactful benefits. If you’re interested in learning more about these options in our local area, let’s connect so you can find a home that fits your changing needs.

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The Top Indicator if You Want To Know Where Mortgage Rates Are Heading

Mortgage rates have increased significantly since the beginning of the year. Each Thursday, Freddie Mac releases its Primary Mortgage Market Survey. According to the latest survey, the average 30-year fixed-rate mortgage has risen from 3.22% at the start of the year to 3.55% as of last week. This is important to note because any increase in mortgage rates changes what a purchaser can afford. To give you an idea of how rising mortgage rates impact your purchasing power, see the table below:

How Can You Know Where Mortgage Rates Are Headed?

While it’s always difficult to know exactly where mortgage rates will go, a great indicator of where they may head is by looking at the 50-year history of the 10-year treasury yield, and then following its path. Understanding the mechanics of the treasury yield isn’t as important as knowing that there’s a correlation between how it moves and how mortgage rates follow. Here’s a graph showing that relationship over the last 50 years:

This correlation has continued into the new year. The treasury yield has started to climb, and that’s driven rates up. As of last Thursday, the treasury yield was 1.81%. That’s 1.74% below the mortgage rate reported the same day (3.55%) and is very close to the average spread we see between the two numbers (average spread is 1.7).

Where Will the Treasury Yield Head in the Future?

With this information in mind, a 10-year treasury-yield forecast would be a good indicator of where mortgage rates may be headed. The Wall Street Journal just surveyed a panel of over 75 academic, business, and financial economists asking them to forecast the treasury yield over the next few years. The consensus was that experts project the treasury yield will climb to 2.84% by the end of 2024. Based on the 50-year history of following this yield, that would likely put mortgage rates at about 4.5% in three years.

While the correlation between the 30-year fixed mortgage rate and the 10-year treasury yield is clear in the data shown above for the past 50 years, it shouldn’t be used as an exact indicator. They’re both hard to forecast, especially in this unprecedented economic time driven by a global pandemic. Yet understanding the relationship can help you get an idea of where rates may be going. It appears, based on the information we have now, that mortgage rates will continue to rise over the next few years. If that’s the case, your best bet may be to purchase a home sooner rather than later, if you’re able.

Bottom Line

Forecasting mortgage rates is very difficult. As Mark Fleming, Chief Economist at First American, once said:

“You know, the fallacy of economic forecasting is don’t ever try and forecast interest rates and or, more specifically, if you’re a real estate economist mortgage rates, because you will always invariably be wrong.”

However, if you’re either a first-time homebuyer or a current homeowner thinking of moving into a home that better fits your changing needs, understanding what’s happening with the 10-year treasury yield and mortgage rates can help you make an informed decision on the timing of your purchase.

« Why a Move Could Bring You More Happiness This Year

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

Owning Is More Affordable than Renting in the Majority of the Country

Monday January 31st, 2022 Buying Myths, First Time Home Buyers, For Buyers, Interest Rates, Pricing, Rent vs. Buy

If you were thinking about buying a home this year, but already pressed pause on your plans due to rising home prices and increasing mortgage rates, there’s something you should consider. According to the latest report from ATTOM Data, owning a home is more affordable than renting in the majority of the country. The 2022 Rental Affordability Report says:

“. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major home ownership expenses consume a smaller portion of average local wages than renting.”

Other experts in the industry offer additional perspectives on renting today. In the latest Single-Family Rent Index from CoreLogic, single-family rent saw the fastest year-over-year growth in over 16 years when comparing data for November each year (see graph below):

Molly Boesel, Principal Economist at CoreLogic, stresses the importance of what the data shows:

“Single-family rent growth hit its sixth consecutive record high. . . . Annual rent growth . . . was more than three times that of a year earlier. Rent growth should continue to be robust in the near term, especially as the labor market continues to improve.”

What Does This Mean for You?

While it’s true home prices and mortgage rates are rising, so are monthly rents. As a prospective buyer, rising rates and prices shouldn’t be enough to keep you on the sideline, though. As the chart above shows, rents are skyrocketing. The big difference is, when you rent, that rising cost benefits your landlord’s investment strategy, but it doesn’t deliver any sort of return for you.

In contrast, when you buy a home, your monthly mortgage payment serves as a form of forced savings. Over time, as you pay down your loan and as home values rise, you’re building equity (and by extension, your own net worth). Not to mention, you’ll lock in your mortgage payment for the duration of your loan (typically 15 to 30 years) and give yourself a stable and reliable monthly payment.

When asking yourself if you should keep renting or if it’s time to buy, think about what Todd Teta, Chief Product Officer at ATTOM Data, says:

“. . . Home ownership still remains the more affordable option for average workers in a majority of the country because it still takes up a smaller portion of their pay.”

If buying takes up a smaller portion of your pay and has benefits renting can’t provide, the question really becomes: is renting really worth it?

Bottom Line

If you’re weighing your options between renting and buying, it’s important to look at the full picture. While buying a home can feel like a daunting process, having a trusted advisor on your side is key. Work with an agent to explore your options so you can learn more about the benefits of homeownership today.

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Why Your Home Inspection Matters [INFOGRAPHIC]

Friday January 28th, 2022 First Time Home Buyers, For Buyers, Infographics, Move-Up Buyers

Some Highlights

Buying a home and wondering if your inspection is necessary? While some buyers may decide to waive their inspection, it’s risky decision.
Your home inspection is a crucial step in the homebuying process. It assesses the condition of the home you plan to purchase, so you can avoid costly surprises down the road.
Let’s connect so you have expert advice and a trusted professional who will keep your interests top of mind.

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Are You a Homeowner Thinking About Climate Change?

Wednesday January 26th, 2022 For Sellers, Housing Market Updates, Move-Up Buyers

Americans are more aware than ever of the effects climate change and natural disasters can have on their homes. According to a report from realtor.com:

“More than 3 in 4 recent buyers, 78%, took [natural disasters] into account when choosing the locations of their homes, . . .”

The study also found that many existing homeowners (34%) have already considered selling their houses and moving to a new location because of the changing climate. If you’re like those homeowners and are weighing your options about what to do next, here’s some information to keep in mind as you begin the process of selling your existing house and searching for your new home.

Do Your Research and Work with a Real Estate Advisor To Find a Home That Meets Your Needs

As a homeowner, it’s impossible to control what types of weather events your home is exposed to. As Maiclaire Bolton Smith, Senior Leader of Research and Content Strategy for CoreLogic, says:

“You can’t necessarily remove the location from around you, but there are things you can do to mitigate damage that can happen.”

The first step is understanding how to navigate your home sale and purchase with these specific issues in mind. While that can seem like a difficult undertaking at first, with the appropriate resources and experts on your side, you can simplify the process.

The Mortgage Reports provides some tips for purchasing your next house, including, but not limited to:

Vetting the location before you buy
Researching Climate Action Plans and learning if the city or state has one
Working with professionals for additional assessments on the home’s ability to withstand natural disasters

Ultimately, your best resource throughout the process is a trusted real estate professional. An agent will help you navigate the sale and required disclosures for your existing home, be your expert advisor on local guidelines and information, and keep your goals and concerns top of mind. Even if your advisor doesn’t have the answers to all your questions about how your next home will stand up to natural disasters, they can help connect you with experts and resources who will.

Bottom Line

If you’re becoming more mindful about the effects of climate change and you’re ready to make a move, you’re not alone. Let’s connect so you have a trusted advisor on your side to help you navigate the sale of your current house and find the perfect spot for your next home.

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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Teena and John Turner and Keeping Current Matters, Inc. do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Teena and John Turner and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.