How to Buy a Home

Season 2 E214 2024 Housing Market Forecast and Predictions - Part 4 MORTGAGE RATES

Believe it or not, mortgage rates may actually go down next year - but will that really make homes more affordable? David reveals the builders' "magic number" that had buyers flocking to purchase inventory.
You'll also learn why becoming a homeowner sooner rather than later has huge financial benefits long-term. And get this - institutional investors are slowing down, leaving more opportunities for regular folks like us.
If you want insider info on how to navigate the crazy market, listen to the final episode of David's forecast series now. The housing revolution starts with your next move - will you join in?
Here are some key topics from today’s conversation:
Mortgage rate predictions for 2024
Builders' "magic number" for selling inventory
Long-term impacts of owning a home on payments
Episode Highlights:
[11:57] The Magic Mortgage Rate
The home builders figured out the perfect mortgage rate to get people off the fence and into their empty homes. By slowly dropping the rates a little at a time, they noticed things didn't really move until they dipped below 6%. But once they hit 5.99%, buyers came out of the woodwork! In no time at all, the builders' unsold homes were scooped up as people jumped to snag those ultra-low interest rates. This showed the builders exactly how sensitive home shoppers are to that interest rate - even a small tweak could be the difference between moving or not moving those houses.
[21:29] The Forced Savings of Home Equity
Your mortgage is like a hidden savings account! With each monthly payment, you're slowly paying down the loan principal and building up equity in your home. Over 30 years, this adds up - you could end up with hundreds of grand in value just from making your regular payments. And best of all, you can use that equity later on however you want. Need cash for a new car or kitchen reno? Just tap into your home savings. Ready to upgrade to a bigger place? Your equity can cover most or all of the down payment. Talk about a sweet deal!
[25:05] Who's Paying the Realtor Fees?
 
There are currently hundreds of lawsuits working their way through the courts that could impact who pays realtor fees when buying a home. Currently in most areas, sellers cover at least part of the buyer's agent commission.But if these lawsuits are successful, that standard may change. Plaintiffs want to pass the full cost of the buyer's realtor onto home purchasers rather than having sellers foot the bill. This could mean buyers having to come up with an extra 2-3% on top of other closing costs, a significant amount on high-priced properties.

Season 2 E213 2024 Housing Market Forecast and Predictions - Part 3 INVENTORY

Ready for more real estate revelations? 
In this latest episode, David pulls back the curtain on the housing market. He dives into the ongoing inventory issue plaguing buyers and explains what it could mean for prices down the road. 
With his trademark straight-shooting style, David shares more shocking stats and insider scoops on the true drivers of affordability. 
Tune in to find out what you aren't hearing from other so-called experts and get a glimpse into what may lie ahead for 2024. This is required listening for anyone looking to join the property party!
Here are some key topics from today’s conversation:
The one big thing affecting home prices (low inventory)
15 years of housing underbuilding
Factors that may increase home listings in 2024
Challenges facing home builders
Expert analyses of 2024 housing trends
Episode Highlights:
[09:43] The Locked-In Effect
David explains the concept of the "locked-in effect" where homeowners have been reluctant to sell because they didn't want to give up their low mortgage rates of 3-4%. However, the massive $300k average increase in home equity over the past few years means many homeowners now have substantial wealth built up in their homes. This equity could motivate some to list their homes, even if it means obtaining a higher mortgage rate on their next home purchase. With $300k more in equity, the higher rate may not seem as significant of a financial burden.
[11:32] Silver Tsunami
As many Baby Boomers reach retirement age, David explains this group is dubbed the "silver tsunami" and will be incentivized to downsize from large family homes to more manageable properties. Boomers trading spacious multi-level homes for single-story ranches or smaller cottages represents a major opportunity for new listings. This influx would offer much needed relief to buyers currently facing bidding wars due to limited options.
[18:44] Building Barriers 
While regulations aim to make homes greener and safer, they've also slowed the pace of new construction and created a lot of variability between states. David wonders how builders can ramp up the number of homes they put on the market each year without compromising environmental and safety standards. There's probably a sweet spot where innovation helps increase supply in a more sustainable way.

Season 2 E212 2024 Housing Market Forecast and Predictions - Part 2

In this episode, David dives straight into the action by recapping his bold predictions from the prior episode. Then we'll be traveling across the country and five years into the future as David taps into reports from all the top analysts. 
Prepare to get an exclusive inside look at emerging trends in climate change, technology, and the fundamental forces shaping our future housing landscape. Strap in as we go in depth on this timely topic - the 2024 housing market is shaping up to be one for the record books.
Here are some key topics from today’s conversation:
US News predicts trends influenced by climate change and AI through 2028
Total cost of ownership becoming a key metric for homebuyers 
More buyers joining forces with friends/family to purchase homes
Housing market trends and potential price changes
Episode Highlights:
[03:21] Climate Change Impact on Home Values
Climate change and AI adoption could impact home values over the next five years. One report predicted that as environmental hazards increase due to global warming, certain areas may become more vulnerable than others. Coastal communities face threats from rising sea levels and intensifying storms. At the same time, cities and states begin implementing new technologies like smart infrastructure and autonomous vehicles. David stresses that these macro trends are well worth watching closely as they have the potential to upend traditional housing market assumptions in the coming decades.
[05:01] Rising Insurance Premiums
Skyrocketing insurance costs are becoming a major factor in total homeownership expenses, with some policyholders seeing massive rate hikes that are simply unsustainable. David warns that the housing insurance market is in dire straits. Hinting out that rising premiums may soon rival mortgage payments for many, David clearly feels homeowners need to pay close attention to this troubling market shift. As costs eat into affordability, insurance burdens could end up pricing out some would-be buyers or forcing current owners to make difficult decisions. 
[07:35] Pent-Up Housing Demand Persists  
Analysts estimate up to 4 million homes of pent-up demand due to underbuilding after the recession. Even with increased construction, this shortage won't be solved until late this decade as inventories remain tight.
[27:12] Property Price Predictions: What Experts Foresee for 2024
David quotes Chief Economist Danielle Hale of realtor.com, who believes a full crash is unlikely due to strong economic factors, but cautions that a deteriorating job market could push more homeowners to sell, upping supply and potentially causing prices to dip. Rising property taxes offsetting high home values could create supply and demand imbalances leading to price drops. Overall, most experts think modest single-digit price increases are most probable. That said, homebuyers need to look at inventory levels, mortgage rates, and the broader economy as key drivers of home appreciation in the volatile year to come.

Season 2 E211 2024 Housing Market Forecast and Predictions - Part 1

As real estate moves at breakneck speed, David hits the brakes to analyze where the market is headed in 2024. With bidding wars already heating up, David's insider research has given buyers and sellers an edge for over a decade. In this episode, David cuts through the noise with never-before-seen data on inventory, rates, and what to expect for prices deep into next year. 
From millennial homebuyers entering the scene to economic factors that could shift at any moment, those in the market for a new home won't want to miss these exclusive predictions. Strap in as David races to break down all the need-to-know numbers and storylines that will shape your housing decisions for the next 12 months!
Here are some key topics from today’s conversation:
Low inventory driving demand
Mortgage rates expected to drop
Price increases and bidding wars
Fed rate cuts could lower mortgage rates
Millennials entering homebuying age
Episode Highlights:
[04:07] 2024 Housing Boom Ahead
David predicts a banner year for real estate in 2024. With massive Millennial demand meeting pent-up buyer interest once rates fall, inventory won't keep pace. Early 2024 will see continued bidding wars and record prices. But when mortgage rates dip later in the year, even more buyers will flood the market just in time for spring. Taking action now before the stampede offers the biggest advantage – so heeding David's forecast and moving sooner is wise to avoid future cutthroat competition.
[13:46] Fed to the Rescue?
Strong GDP growth in 2023 could force the Fed's hand to cut rates by summer's end. And when borrowing costs fall, the housing market will certainly feel the effects. David forecasts a resulting cooldown of inflation paired with lower mortgage rates that inject new life into the market. But will it be enough to offset shrinking inventory? 
[34:17] Millennial Wave Approaches Shore
With over 45 million members of the largest generation entering their prime homebuying years, David warns the tsunami is near. Between ages 27-35, these Millennial first-timers will bring unprecedented demand to a market already on edge. And as today's low inventory faces this tidal surge head on, the next two years may see the most cutthroat conditions yet. But the wave also brings opportunity - by acting now, forward-thinking buyers can snatch the best real estate before this massive cohort crashes ashore. Those who wait to ride the Millennial swell may find themselves swamped by the competition coming in 2024-2025.

Season 2 E10 STEP TEN - You Must Know the CURRENT Market

Congratulations! You’ve made it to STEP TEN in David’s How to Buy a Home series. If anyone knows that you’re buying a home, it’s likely that they’re going to offer you all kinds of advice. Unfortunately, most of it is just dead wrong. This episode is all about learning the market so you can cut through the bull crap advice and feel confident in what you’re doing. 
Here are some key topics from today’s conversation:
Why knowing the market is key
Timing is everything
Not everyone gives good advice
More resources to prepare yourself for buying a home
Episode Highlights:
[02:06] Location, Timing, Timing
The most important step to buying a home is understanding the timing. Does this mean that you should “buy low and sell high?” Absolutely not. As David always says, there is no better time than right now to buy a home. But, having a good understanding of the market means that you can get the best deal based on how the current market is going. While buying a home is different every single time, David’s rule is to buy your first house based on the current market conditions when you are ready to buy. 
[10:44] What You Need to Know
There are certain market changes that you should be aware of that can affect when you buy a home. David makes it simple by distilling it down into a list:
New down payment assistance programs
New loan programs
Your credit score
Your DTI ratio
How sellers are selling
This is just the tip of the housing market iceberg. There are so, so many market factors that will affect your ability to buy a home or what homes are available to you. 
[17:16] More Resources to Check Out
There’s a lot to buying a home, but it’s a very doable process. This whole series is just a snapshot of the information available. Check out the “How to Buy a Home” podcast library for more informational episodes like this one, or get plugged in with a unicorn realtor and lender if you’re ready to take those next steps. 

Season 2 E09 STEP NINE - Practice Makes Perfect

The thought of becoming a homeowner can be very overwhelming, but have no fear! In Step Nine of David Sidoni’s How to Buy a Home series, he gives you some practical advice on how you can practice being a homeowner before you actually become one. Following this step gets you on the right track financially and gives you the confidence you need to jump into your new chapter of home ownership. 
Here are some key topics from today’s conversation:
Balancing your budget
Practicing to avoid pain in ownership
Playing the long game
The house party! 
Episode Highlights:
[01:21] The “B” Word
Let’s start with the money - a.k.a. your budget. There are lots of different ways to attack your budget, but you need to focus on being able to save while also paying your expenses. When you’re still renting and saving for that down payment, that percentage of your income you need to save might need to be higher. But, many folks report that they get so used to saving, they still follow a very similar process after they’ve purchased their new home, just at a smaller percentage than before! Saving is a habit that you need to get into when you’re preparing to buy a home and there’s no better time than the present to start. A great way to get started is by talking to your unicorn lender and estimate a PITI payment that aligns with the amount you’re approved for then saving that each month. You’re practicing your payment.
[09:37] Play the Long Game
Your home will never feel more expensive than it does in the first three years. The mortgage will feel the highest in these first three years because you are used to paying an increasing rent. While the rent might be lower than a mortgage payment, it will stay the same. So, pull out a spreadsheet and start planning how you can play the game. Yes, spreadsheets can be intimidating. But, having a concrete plan can make all the difference when planning for your future. 

Season 2 E08 STEP EIGHT - Do Your (Online) Research!

If you’ve been listening to David for a while, then this step might come as a bit of a surprise. Over and over again David has warned first-time home buyers about the dangers of perusing the Internet for real estate advice so Step Eight might be confusing to you folks. BUT, stick with him because he explains it all in this episode. 
Here are some key takeaways from today’s conversation:
Avoid over-researching
Have a unicorn support team first
The best websites to find the info you’re looking for
Some additional research tips and tricks 
Episode Highlights:
[02:18] Get Ready to Research
Okay, keep in mind that this episode assumes that you already have a unicorn team set up to help you out. It’s important to remember that researching and researching without any professional guidance puts you in the danger zone for misinformation, so it’s vital to have your team so you know where to spend your time. So, now it’s time to exercise your stalking skills! 
[06:04] Start Looking for Neighborhoods
Your unicorn support team can help you with all the financials and real estate lingo, but only YOU can decide where you’re going to feel the most comfortable. So, before your realtor takes you out to look at homes, it’s important to research and find some neighborhoods that align with what you’re looking for in a community. Now, when it comes to looking for these neighborhoods, you need to be aware of where you’re getting your information. Are you on the Chamber of Commerce’s website? Is it a place that’s trying to sell you something? No matter where you get your info, take the time to cross reference what you find with information from lots of other websites to make sure you’re looking at the real best neighborhoods. Do research on safety, schools, and all the other things that will make the neighborhood a winner to you and your family. 
[18:05] Check Out the Homes
Alright, you’ve looked at neighborhoods and now you have an idea of where you want to look for a home. Now it’s time to look at the homes themselves. You hop on Google and start looking at homes for sale, but realtor sites are only going to show you the pictures of the house, not necessarily the entire neighborhood. This is where Google Earth comes in. Get on Street View and start looking at the curb appeal, the neighbors, the walkability of the area, how close you are to a major highway… all those important things you can’t get just from an online listing. This is helpful, but the best approach is to talk to your unicorn realtor because they can talk to other realtors who are familiar with the area, they can go check out the neighborhood for you, or they might know some hard-to-find facts about the region. Talk to them! They have your best interests at heart and will make sure you’re getting the best info.

Season 2 E07 STEP SEVEN - Terms & Definitions

One of the biggest challenges for first-time home buyers is navigating all the terms and definitions that are associated with buying a home. In the step seven of David’s 10-part How to Buy a Home series, he talks all things real estate jargon so you can empower yourself with the knowledge you need. 
Here are some key takeaways from today’s conversation:
Pre-qualified vs. pre-approved loans
What escrow really means
Who are these people involved in the process?
Acronyms, acronyms, acronyms!
Episode Highlights:
[01:25] There Are a LOT of Terms to Know
From differences between loans to all the crazy acronyms, it can feel overwhelming when someone starts talking to you in real estate language. What’s the difference between a real estate agent and a real estate broker? What’s up with lenders and mortgage brokers? And don’t even get David started on the acronyms: FHA, DTI, USDA, ROI… the list is long. Not knowing what these terms mean can leave first-time home buyers behind when it comes to making those tough decisions. The best way to start learning these terms? Start by going back to listen to Episode 94 for the whole A-Z of terms you need to know.
[05:32] Why Is This Step Seven?
Feeling confident is super important when it comes to buying a home and the best way to feel confident is to know what you’re talking about. There’s no room for uncertainty when making this SUPER important life decision and knowing your stuff will give you the boost you need.

Season 2 E206 - STEP SIX - Setting Your Goals

While you did a lot of the heavy lifting in Steps 1-5, Steps 6-10 are still vital parts of the process. In this episode, David discusses the importance of setting clear goals throughout this home-buying process so you can be on your way to home ownership success. Check it out and learn some insider tricks along the way.
Here are some takeaways from today’s conversation:
Why setting goals is an important part of the process
What does buying a home mean for you and your future?
How to use these goals as part of your planning process
Learn some industry insider tips and tricks 
Episode Highlights:
[02:05] How to Get Started With This Step
There are two major factors when it comes to setting your goals. We’ll call them Goals 1 and Goals 2:
Goals 1: This is the goal of the purchase. What does buying this home mean for you today and what does it mean for you and what you want to in five years?
Goals 2: This is using goals as part of your planning process. 
When you and your partner decide on unified goals, it makes the rest of the planning process MUCH less stressful and allows you to actually enjoy the journey of buying your first home, either by yourself or together. 
[04:55] Goals 1
This factor addresses the big picture behind buying a home and sets a strong foundation for Goals 2. When you’re figuring out your goals for buying a home, you’re not just looking at a page out of the paybook - you’re creating the whole freaking personal manual. When you’ve decided with your professional guides what your best dream scenario is, then you can start home shopping with your personal manual to help you. Remember, some of these are emotional goals, but a lot of them are financial. You need to decide how you’re going to set yourself up and your family up for the future. Does this mean buying a home that you’ll turn into a rental? Does it mean that you’re buying a home that you’ll update and resell? These are all important questions you need to ask.
[36:55] Goals 2
This step is a lot more straightforward than Goals 1 and we’re kind of stepping back for this one. Talk to your professional to get these three numbers:
Credit score 
Debt reduction
Savings
Once you have these three numbers, then you can start planning. Share them with your unicorn team to start setting your goals (this helps you with accountability, too). AND don’t forget that setting smaller goals along the way allows you to celebrate your victories because, guess what, buying a home is stressful. In fact, it’s one of the most stressful things you’ll do in your life. So, taking time to celebrate the small wins will keep up your morale even when the going gets tough. 

Season 2 E205 - STEP FOUR & FIVE - Managing Debt & Creating Savings

David combines steps FOUR and FIVE in his series that shows you how to buy a home. Balance and budget are the key words when it comes to these steps. Why? Because they can be done at the same time. Get ready as David dives into these important steps and also shares some real-life stories of first-time home buyers who experienced this firsthand. Also, listen to get the insider scoop on debt management from David’s unicorn lending team and get tips you can’t find on Google.
Here are some power takeaways from today’s conversation:
Why credit score goes before debt
How to balance debt and saving at the same time
Gross debt vs. monthly debt
How to start with savings
Episode Highlights:
[04:59] DEBT
There are some important things to consider when it comes to tackling your debt. David breaks it down into six points:
Credit scores take longer to dispute, which is why this step comes BEFORE handling your debt.
You need to develop a rent replacement strategy. Your grandparents’ way of doing things is way out of date in today’s economy, so you need to strategize in order to accomplish your home ownership goals.
Get a handle on your debt. This does NOT mean that it all needs to be paid off, but you need to be on the right track.
Understand how different types of debt can impact your credit score (i.e. installment debt vs. revolving debt).
Total debt means NOTHING. Your gross debt and monthly debt have very different implications on your ability to purchase a home.
NEVER consolidate your debt before buying a home.
Ultimately, your debt can be broken down into three categories: good debt, bad debt, and workable debt. Knowing which is which can make all the difference in tackling it. Don’t just take David’s word for it. There are countless stories of How to Buy a Homies in unique situations who learned this knowledge and successfully bought their first home. 
[01:15:57] SAVINGS
Okay, now we’re on to savings. Doing this at the same time as managing your debt means one thing: you need some professional guidance here to make sure you’re on the right track. The bank has very specific criteria and having everything paid off is NOT a part of it. Here’s what you need to consider when saving according to David:
Start saving! Yes, it’s just that simple.
The rest? Well, that totally depends on you and your situation. No one can tell you much salary you need to make, how much you need for a down payment, or anything of the like. But, having a professional can definitely help you along this process.
If you’re terrible at waiting for answers, David does give you a VERY GENERIC low standard to shoot for when saving for a home: 8%. That means 5% for the down payment and 3% for closing costs. However, there are 1000 other factors to consider which is why having a professional guide is key.
David shares some saving success stories from real How to Buy a Homies so you can get a real-life perspective on these all play together.