Tips to Navigate a Changing Housing Market

If you're planning to buy a home in 2025, there are several important factors to consider and steps to take that will help ensure your success. Various trends will influence home affordability and your ability to purchase the home you want without stretching your budget. So, what can we expect regarding mortgage rates? Will there be an increase in available homes on the market next year? Additionally, there are specific actions every homebuyer should start taking now to prepare for 2025. Let’s break it down to help you navigate this market with confidence. Will Mortgage Rates Drop in 2025? The questions asked by homebuyer and real estate agent is where mortgage rates are heading in 2025. Although nobody has a crystal ball, many reliable experts predict them to drop over the course of the year. If you're planning to buy a home in 2025, there are several important factors to consider and steps to take that will help ensure your success. Various trends will influence home affordability and your ability to purchase the home you desire without stretching your budget. How much mortgage rates drop will depend on ever-shifting market factors such as inflation, unemployment, wage growth, economic growth, and the possibility of a recession. Sourcing data from reputable sources such as Fannie Mae, the Mortgage Bankers Association (MBA), HousingWire, and MBS Highway, it’s expected that rates will drop slightly next year but remain in a range between 5.75% and 7.25%. These figures are dependent on the economic factors previously mentioned, and it could take until the second half of the year to see rates in the low end of that range. Mortgage rates can directly impact your overall budget; check out this home affordability calculator to learn more. If you want to buy in 2025, it’s important to connect with a UMortgage Loan Originator as early as possible to take advantage when market opportunities arise. More Homes and More Buyers on the Market in 2025 Housing inventory, specifically a lack thereof, has been one of the main drivers of the housing market these last 3 years. Throughout the year, we’ve seen inventory numbers steadily rise to highs not seen since the summer of 2020. As of the end of November, we have 27% higher single-family housing inventory than this time last year. This rise is expected to continue to increase in 2025, and it’s partly due to the forecast that rates will drop slightly across the year. According to Mike Fratatoni, Chief Economist and SVP for Research and Business Development at the MBA, “mortgage rates at this level should support homebuyer demand and gradually reduce the lock-in effect, thereby increasing the inventory of existing homes and supporting higher purchase origination volume in 2025.” More sustainable inventory is great news for homebuyers. Not only does this mean more options to shop from, but it also gives more negotiation power for many homebuyers to get an asking price that works for their financial picture. How to Prepare to Buy a Home in 2025 Buying a home is a big commitment, but there are plenty of things you can start doing now to put yourself in the driver’s seat when it comes time to buy in 2025. Below are a few strategies that will help you be one of the strongest buyers on the market next year. Start Saving for a Down Payment: A higher down payment will help you secure the lowest possible mortgage rate and can significantly lower your monthly mortgage payment. It’s possible to buy with as little as 3% down for conventional loans (and 0% down for a VA loan), but a higher down payment will open up more possibilities. Build and Maintain a High Credit Score: Like with a higher down payment, a higher credit score will be key to getting you the lowest possible mortgage rate. Building credit is easier than you might think: make sure you pay all of your monthly debts on time and, if possible, keep balances as close to $0 as possible. Read this guide for more credit-building tips. Get a Mortgage Pre-Approval: Your golden ticket in the homebuying process is a mortgage pre-approval. This will give you an accurate estimate of your buying power and will show sellers and listing agents that you’re a serious buyer. Fill out this form to start your free pre-approval today! The Importance of Working With a Local Expert It’s looking like the 2025 housing market will bring some balance that should make affordable homeownership more accessible. However, the best way to ensure a sensible home purchase in 2025 is to work with local mortgage and real estate experts who can help you navigate the ebbs and flows of the market. A knowledgeable real estate agent in your area will understand home prices by neighborhood and the areas where home prices appreciate the most. This expert guidance will help you spot deals, avoid overpaying for a property, and ensure that your home is an investment that grows your financial power over time. When you work with a UMortgage Loan Originator, you’ll gain a partner who will help you maximize the wealth-building benefits of homeownership. Throughout your homebuying process, your LO will learn more about you to make sure your mortgage matches your short- and long-term financial goals. Even after you’ve closed your loan, your LO will stay in touch to share refinance opportunities that will ensure you have the lowest possible mortgage payment and can use the equity you’ve earned to grow your financial portfolio. If you’re ready to start preparing to buy a home and unlock financial freedom through homeownership, follow this link to get connected with a UMortgage LO today!

In today’s fast-paced real estate environment, adapting to change is essential. We’ve seen first-hand that the market can be unpredictable. However, with the right strategy and the right team in your corner, there’s plenty of opportunity for you to thrive. Here's how you can collaborate with UMortgage to navigate these challenges and find success. Work With a Local Expert One of the biggest advantages you can get in any housing market, let alone one that changes quickly, is local expertise. National headlines paint a broad picture, but every neighborhood has its own dynamics. By partnering with one of UMortgage’s local mortgage experts, you can dive deeper into the market conditions affecting your area to make informed decisions while you shop for your home. UMortgage is proud to have Loan Originators who are rooted in their local communities and can offer in-depth expertise on the market dynamics of specific neighborhoods. When you choose to work with a UMortgage LO, you’ll get inside knowledge on regional trends, mortgage rate movements, and inventory fluctuations to help you shop with confidence. With the right information in your toolbelt, you can ensure you're acting at the best time to buy or own your home without unneeded financial strain. Understand the Economics Behind the Market A changing market can feel daunting, but it’s important to remember that real estate is driven by fundamental economics. Your LO can break down these key drivers—such as interest rates, inflation, housing supply, and demand—so you understand not just what’s happening, but why. This insight is especially helpful for homebuyers who may feel unsure about jumping into the market during periods of fluctuation. If you're a real estate agent, having a solid narrative behind these changes can set you apart when trying to win over a prospective buyer. Being able to clearly explain why certain trends are happening will build trust and reassure your clients that you're the go-to person for real estate advice. With UMortgage’s help, you’ll always have up-to-date market insights to share. We publish a weekly blog every Monday at noon sharing digestible insight into recent mortgage rate movements and a forecast of market-impacting events on the horizon. Check it out here every week to see the different pieces of economic data that will make mortgage rates shift to stay ahead of the curve. Find Your Niche and Strengthen Your Knowledge In a diverse market, it’s important to find a niche where you can specialize. As a real estate agent, honing in on a specific area—whether it's first-time homebuyers, military homebuyers, or investment properties—can set you apart. With UMortgage, we offer a wide range of loan products to tailor a mortgage to a client’s specific financial goals. When you specialize, you can provide better service, and we can match you with the right mortgage product to strengthen those client relationships. Homebuyers can also benefit from this strategy by working with a LO who understands their unique circumstances. Whether you're a veteran using a VA loan or a self-employed borrower with a more complex financial picture, finding the right loan product will make all the difference when your loan reaches underwriting. Managing the Emotions of the Homebuying Experience Finally, it’s crucial to manage the emotional rollercoaster of real estate transactions. Buying a home can be stressful, and market changes can add to that pressure. But don’t worry—we’ve seen it all. Your UMortgage LO is here to guide you with clear, rational advice that helps you stay focused on your long-term goals. By working closely with your UMortgage LO, you'll have the right combination of local knowledge, market insight, and emotional support to stay resilient through the ups and downs. The real estate market may be ever-changing, but that doesn’t mean it’s impossible to succeed. With the right LO by your side, you can navigate these shifts confidently. At UMortgage, we’re committed to helping you find the best path forward, no matter what the market throws your way.

Finding your dream home is a process. From your initial pre-approval to the steps taken searching the housing market and submitting your offer letter, it’s not uncommon to get excited and attached to a home once you’ve had your offer accepted. However, that excitement can quickly turn to stress if your home appraises for a price lower than your offer. Although appraisal gaps aren’t uncommon in a competitive housing market, these gaps can significantly impact your home purchase. Let's dive deeper into understanding what appraisal gaps are, their implications, and strategies to navigate them. What is an Appraisal Gap and Why Do They Occur? An appraisal gap occurs when a professional appraiser determines that a home's market value is lower than the price a buyer offered. This discrepancy can raise concerns for both buyers and lenders and might lead to various complications in the homebuying process. Understanding the Home Appraisal Process Appraisals are conducted by licensed professionals who possess extensive knowledge of the local real estate market. They meticulously analyze the property's characteristics, comparing it to similar recently sold homes in the area, known as "comps." An appraiser considers factors like square footage, the number of bedrooms and bathrooms, the home's age and condition, any recent upgrades or renovations, and the property's location and surrounding neighborhood to land on the appraised value. By meticulously weighing these factors, appraisers arrive at a fair market value estimate for the property. Reasons That a Home Might Appraise Lower Than Your Offer • Competitive Markets: In hot markets with low inventory and high demand, buyers often offer above the asking price to secure a home. This can lead to prices exceeding the actual market value. • Dated Comparisons: The appraiser may compare the property to those that don't accurately reflect recent market trends or the unique aspects of the home being appraised. • Seller Concessions: If a seller agrees to cover certain closing costs or make repairs, the appraiser might lower the value to offset these concessions. How an Appraisal Gap Can Impact Your Offer Appraisal gaps have far-reaching implications for buyers. Mortgage lenders rely heavily on appraisals to ensure they're not lending more money than a home is worth. If a gap exists, the lender won't loan you the full amount needed to cover your offer and can force you to make up the difference in cash. This unexpected financial burden can be a major obstacle for many buyers, especially those looking to buy their first home or those without substantial cash savings to cover the difference. A low appraisal can be used as leverage to renegotiate the price with the seller. However, this isn't always successful, especially in competitive markets where sellers may have other offers. Additionally, renegotiations can delay the closing process and create tension between parties. What to Do If Your Home Appraises Lower Than Your Offer Facing an appraisal gap can be daunting, but it's not the end of the road. These strategies can help you overcome this hurdle and potentially get your homebuying journey back on track: • Cover the Gap with Cash: The most straightforward solution is to pay the difference between the appraised value and your offer price in cash. However, this is only feasible for buyers with ample savings. • Renegotiate the Price: If the seller is motivated, you can try to negotiate a lower price based on the appraisal. This requires strong negotiation skills and a willingness to compromise. • Challenge the Appraisal: If you believe the appraisal is inaccurate, you can dispute it by providing additional evidence of the property's value, such as recent comparable sales data or information about renovations or upgrades the appraiser might have overlooked. • Order a Second Appraisal: Sometimes, getting a second opinion from a different appraiser can reveal a different valuation. However, this comes at an additional cost and may not always yield the desired results. • Exercise Your Appraisal Contingency: Many real estate contracts include appraisal contingencies and clauses that allow buyers to back out of the deal if the appraisal falls short of the offer price. These contingencies often come with deadlines, so it's important to act fast if you wish to exercise them. Appraisal gaps are a common but often stressful aspect of the homebuying process. By understanding what they are, their impact, and the available strategies for addressing them, you can confidently navigate this obstacle and make informed decisions to secure your dream home without compromising your financial well-being. If you experience an appraisal gap or have any concerns about a potential appraisal gap before submitting your offer, feel free to reach out to your UMortgage Loan Originator for expert financial guidance.