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Those now-enviable 3% interest rates on 30-year mortgages are “in the past for a while,” but that doesn’t mean it’s better to sit on the sidelines of the real estate market, says Nicole Webb, senior vice president. President and Financial Planner of Wealth Enhancement Group, a wealth management firm with $62 billion in assets and 90 offices in the United States.

Inflation, at least from the perspective of the Federal Reserve, “is likely to remain quite sticky and high for some time, which will lead to policy to hold interest rates longer,” Webb said. The labor market is strong, which means consumption will remain resilient. “The consumer will continue to behave as expected as long as they don’t live in fear of losing their job,” he says.

during April 21 Barony In a virtual Level Up discussion, Webb touched on a range of real estate topics, including what first-time buyers and retirees should consider, whether it’s wise to renovate or update a property before putting it on the market, and whether women need more tailored advice. than men. .

Below are the highlights of our discussion.

Housing market outlook

With mortgage rates, “we’ve already seen some dips and easing, and then we’re seeing this pickup right away,” Webb says. “We have the seasonality now that it’s spring, and I think consumers are recognizing the fact that even with minor contractions, it’s a good time to lock in rates because of this expectation of a big drop and moves in both directions.” a thing of the past.”

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Mortgage rates have hovered between about 6.1% and 6.7% this year, according to Freddie Mac, but have risen to about 7.1% by the end of 2022. The average 30-year fixed mortgage rate as of April 20 was 6.39%. Many homeowners locked into fixed mortgage rates in the 3% range or even less during the pandemic.

Existing homes and new construction

The supply of existing homes is low because people who closed on very low mortgage rates tend to stay put. With new construction, there are more options. “It’s very confusing right now because there’s movement in some areas and not in others,” Webb says. “It depends on primary supply and demand, and there is very little supply in the secondary market.”

Still, there are pockets across the country “where you’re seeing explosive new construction growth,” he says, adding that the largest builders “have a really unique ability to manage pricing.” Indeed, DR Horton (DHI) posted better-than-expected earnings in the second quarter, with chairman Donald R. Horton cited the builder’s “use of incentives and price adjustments to adapt to changing market conditions.”

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First time home buyers

A big mistake is when people go from renting to single-family ownership and then get saddled with the associated expenses, like when the furnace breaks. “Family-only properties are really for people who intend to stay there for a long time to see the real value,” he says.

It may make sense to look first at townhouses, condominiums or co-op housing, where higher costs are shared between owners.

Retirees who want to sell

With limited inventory, “putting your home on the market means you’re likely to have buyers for you,” he says. If you’re a retiree looking to move, your home prices are likely to go up, so “I’m not too hung up on waiting for some kind of correction, whether it’s in mortgage rates or prices.”

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Transform vs. Staging

“You don’t have to fix up your house for the buyers who are going to come,” she says. “You don’t mind a big supply, so it’s a lot cheaper and a lot faster to have a great stager in your home.” Stagers, who furnish and decorate a home to make it attractive to potential buyers, are a good way for sellers to test the market before renovating.

Various tips for women.

A Bankrate.com report found that single women made up 17% of homebuyers in the U.S. this year, compared to about 9% of single men. Webb says she recently read a statistic about how important economic security is to women. “It tends to be a deeply held value for most women,” she says. When it comes to real estate, because rents are so unpredictable, becoming a homeowner with a fixed mortgage isn’t a surprising decision for women, even with fluctuations in property taxes and other costs.

“We generally believe that women have unique needs,” Webb says, and her company wants to “help them put together financial plans that are based on their decision-making process.”

Email Mary Romano at mary.romano@barrons.com

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