How to Buy a Home

E164: The Basics: 10 Steps to Buying Your First Home

Buying a home for the first time can be overwhelming, but having a step-by-step process to follow can make everything clearer, right? WRONG. 
David Sidoni gets thousands of questions from first-time home buyers asking for a step-by-step list they can follow to buy a home. Unfortunately, everyone is a special snowflake with different starting points and circumstances, so having a one-size-fits-all rulebook isn’t really in the cards. But, since so many folks have asked, David did his best to give you the Chutes and Ladders version of his step-by-step plan.  
Here are some topics from today’s discussion:
Why every plan is individual
Deciding to buy a home is the vital first step
Why getting pre-approved is NOT the first step
How you can get started on your plan today
Episode Highlights:
[01:51] We All Start From a Different Square
Rolling with the board game analogy, it’s important to know that everyone’s 10 steps start from a different place on the board. You could be in a completely separate spot in life from someone else, which heavily influences your home-buying process. Knowing where you are on the board is the key to using it properly. 
[7:11] The First Two Steps to Success
In the 10 steps to buying a home for the first time, there are two steps that are not on the list that might shock you. The first one is getting pre-approved for a loan. The second is finding a realtor. Why?! Because finding a guide in your home-buying process is so so so important for this very reason - it covers both of these steps. DO NOT shop around for pre-approvals and rates first. Look for a realtor first who can talk you through the process. Instead, your first two steps should be:
DECIDE to buy a home. Yes, you need to be committed to the idea first.
Find a GUIDE. You also need to find someone who cares about you and knows the process to help you navigate these real estate waters. It doesn’t necessarily have to be a realtor, but needs to be someone who knows what’s up.
[27:24] These Steps Need to Happen All At Once
Working on your credit score, getting a handle on your debt, and working to save money are three steps that need to happen simultaneously to be effective. They’re also super easy to start right now. But, it’s most helpful to you if you consult your guide first to find out where you are on the board so you know where you’re going next.

E163: Let’s Hear From Another REAL Home Buyer: Amber’s Story

As first-time home buyers, it’s important to talk to folks who have already gone through the process. David Sidoni knows the value of listening to those who have gone before, which is why he decided to take a break from talking and hand the mic over to How-to-Buy a Homie Amber.
Amber was living in NYC, but when the pandemic hit, she knew it was time to buy her first home. After a lot of number crunching, she finally purchased her first home in the D.C. area.  Check out her biggest takeaways and considerations throughout the process.
Here are some topics from today’s discussion:
What Amber learned when buying a home
How rising rent prices convinced her it was time to pay a mortgage
The importance of researching and comparing neighborhoods
Planning ahead when buying a home
Episode Highlights:
[01:03] In The Beginning
Amber loved NYC, but rising rent prices during the pandemic made her reconsider. After spending time looking around and even moving to another apartment in New Jersey, she finally decided that she wanted D.C. to be her home. Once she got in touch with a unicorn team and lender and then the rest is history.
[19:21] Know Your Neighborhood
Before moving to D.C., Amber jumped ahead and decided she would do some research on the area’s neighborhoods. This gave her a great advantage because she was able to find out exactly what she needed. She looked at prices, distances, ratings, even the speed at which homes were selling in order to make an informed decision about her purchase.
[24:57] Buy With the Future in Mind
When deciding on her next step, Amber needed to consider where she would be in 3-10 years. While living close to downtown’s bustling businesses might sound appealing to her now, it may not be as appealing to her in a few years. Since Amber was in for the long haul, she opted for a quieter neighborhood with more room so she could grow.

E162: How Much Home Can You Afford With Your Salary?

“Hey David, I make more money now. What kind of house can I buy on my new salary?” - A Lot of First-time Home Buyers
“There’s an equation for that!” - David Sidoni, #1 First-time Home Buyer Advocate & Data Chart Enthusiast
Yes, it’s true. There is indeed an equation that can help you determine how much home you can afford based on how much you make. David will spill all the tea in this episode… but you HAVE to promise to listen to the whole podcast. He’s not kidding. There’s more to the numbers than meets the ears.
Here are some topics from today’s discussion:
How the equation works
How determining your monthly payments can help you buy a home
All the warnings and cautions that come with this equation
Episode Highlights:
[02:21] Let’s Look at the Numbers
Before we dive in, there’s one important caveat: every buyer has extenuating circumstances that will affect this number. This is a GUIDE. 
First thing’s first. When it comes to getting approval for buying a home, it all comes down to the monthly numbers. While your salary might be measured by an annual sum, it’s all measured monthly in real estate. So, take a look at how much a monthly payment would cost for your home, how much you bring in each month (pre-taxes), and then do the math from there. 
[19:23] Here’s the Catch
If you made it this far in the episode, great! You’ve kept your promise.
David made all of his calculations based on very rounded, very average numbers. Know that interest rates, home prices, and the overall market will ALWAYS change. Always. You can’t just walk away with the numbers from this equation and assume you’ve got it all together. Instead, take this equation, get a ballpark estimate, and then get in touch with a highly qualified real estate agent and allow them to help guide you the rest of the way. YT : https://www.youtube.com/@howtobuyahomepodcastOfficial Website: https://www.howtobuyahome.com/Tiktok: https://www.tiktok.com/@howtobuyahome?is_from_webapp=1&sender_device=pc

E161: Achieving The American Dream: An Interview With Sally

This podcast is all about helping first-time home buyers, so David Sidoni decided to talk to a real first-time home buyer who found their unicorn home through David’s unicorn team!
Sally and her husband were ready to purchase their first home in April 2022, just before the interest rates went wild. Learn how their unicorn team helped them navigate the crazy real estate waters, gave them an amazing experience and helped them realize their homeowner dreams.
Here are some topics from today’s discussion:
How Sally got in touch with her unicorn team 
How they got through the craziness of 2022’s housing market
A look at some real home-buying numbers 
Episode Highlights:
[02:20] Sally’s Real Estate Team Comes in Clutch
Buying a home can be scary, but Sally got in touch with a great real estate agent and lender. As David has said many times before, finding experienced real estate agents and lenders is key to getting into the best home-buying situations. In Sally’s case, they were very supportive and knew that she and her husband could do it, even though it seemed challenging at the time! Consistent follow-ups, emails, and messages from the team kept them in the loop and feeling confident about their choice.
[14:07] The Numbers Had To Make Sense… And They Did!
Sally came in with some student debt, one steady income, and $5,000 for down payment. Her team helped her crunch the numbers and run all the possible scenarios, as well as throwing in some creative ways to help make the purchase even smoother. 
[32:05] Sally’s Happy (Home) Ending
The speedy process and quick feedback allowed Sally to move in before the end of 2022, making the whole process take from April to December. Now, she, her husband, and their two ferrets got to spend their first Christmas in their first house!
Resources Mentioned:
 
https://www.howtobuyahome.com/services/find-a-realtor/ 

E160: Want a Balanced Life? Look No Further Than These Locations

A good work ethic is a timeless principle, but the all-work-no-play mentality of the Boomer and Gen X generations is going out of style. Millennials and Gen Z find more value in a healthy work/life balance that prioritizes mental health and personal values.
Well, David Sidoni did some research (as he loves to do) and found studies that highlight the best places to live if you’re looking for a balanced and happy life in 2023. 
Here are some topics from today’s discussion:
The difference between generational preferences
How inventory is impacting regional affordability
A look at the housing market in popular cities
The best places to live in the United States
Episode Highlights:
[01:25] What The Market Could Look Like in These Popular Regions
Overall, home prices aren’t expected to change too much, but individual markets are exhibiting some interesting patterns. The Midwest is showing some promise with home prices, rents, and mortgage rates staying below the national averages. The key? INVENTORY. Inventory is at a much more manageable number in these areas, keeping the costs on the lower end. Some metro areas, including Austin, Tampa, and Miami, are currently priced high, but are poised to drop later in the year. Price appreciation, inventory, listing prices, and weak labor markets are all key factors that contribute to a region’s affordability. 
[7:30] The Best Places to Sustain a Good Work/Life Balance
Ahhh, a healthy work/life balance. The coveted lifestyle. If this is what you’re looking for, then there are some places that are more conducive to this way of life. Looking at mental health, income, remote working prevalence, commute times, and health insurance, Midwest cities DOMINATED the lists for the best balances of these factors. Also, these cities had more affordable housing options for first-time buyers. Hmm… definitely worth thinking about. The top 10 cities had some of the shortest commute times, best air quality, best insurance coverages, a variety of recreation options, great affordability scores, and high mental health rankings. How cool!
 
Resources Mentioned:
 
https://www.zillow.com/research/10-best-metros-first-time-home-buyers-31855/ 
 
https://www.redfin.com/news/housing-market-predictions-2023/ 
 
https://www.rismedia.com/2023/01/23/top-cities-work-life-balance/ 

E159: Bonus: What Happens If There’s a Recession in 2023?

You thought that the last episode was the last one in David Sidoni’s 2023 housing market predictions series. PSYCHE. In this BONUS episode, he gives you some insight on how a recession could totally upend all the other predictions we’ve talked about so far. 
So, buckle your seatbelts because it’s going to be a wild ride. 
Here are the biggest takeaways from today’s discussion:
How recessions have affected the housing market in years past
A brief review of the projected trends for 2023
What could happen to sales if the government gets involved
How inventory could be the key to an unexpected market change
Episode Highlights:
[02:31] Here’s a Quick Recap
You should be expecting a normalizing and stabilizing housing market in 2023 (EXCEPT RENTS - sorry). Mortgage rates are likely to gradually decrease. Home prices will probably increase or decrease around 1-2% because demand is still higher than supply. Don’t believe him? Go back and listen to the previous four episodes and believe.
[5:25] Okay, What Happens If We Go Into a Stanky Recession?
David’s got a truth bomb for you: we’re already floating in and out of a recession and have been for about 6-8 months. However, several folks are expecting things to get worse in 2023. The stock market hasn’t had a major dip since 2008 - which is around 15 YEARS - so we’re about due for another one and it’s time to start preparing. Typically during an economic downturn, the government will cut interest rates causing home prices, mortgage rates and other factors to fall and could bring more buyers to the market. But, a more severe recession could mean fewer sales. BUT inventory will still be low! Which brings us back to supply and demand. More buyers = more demand = higher prices. Boom. 
[13:58] Let’s Look At the History
In the last 4 out 6 recessions, home prices went UP. In 2008, the crash was caused by the housing market, but this next one will not be because inventory is too low. A regular recession usually does not impact housing. The 2008 one that we’re all familiar with was an anomaly. 
Resources Mentioned:
 
https://www.usatoday.com/story/money/personalfinance/real-estate/2022/12/15/housing-market-six-experts-2023-real-estate-industry/10881757002/ 
 
https://www.redfin.com/news/housing-market-predictions-2023/ 
 
https://www.bankrate.com/real-estate/housing-market-predictions-2023/ 
 
https://www.newsweek.com/will-house-prices-drop-2023-real-estate-experts-predictions-1761338 
 
https://www.marketwatch.com/story/house-prices-will-fall-in-2023-but-affordability-will-be-at-its-worst-since-1985-says-capital-economics-11668530061 
 
https://www.yahoo.com/now/heres-where-morgan-stanley-bets-154429100.html 
 
https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/ 
 
https://www.housingwire.com/articles/the-red-hot-housing-market/ 
 
https://www.inman.com/2022/12/28/the-2023-housing-market-a-real-estate-reckoning-is-at-hand/

E158: PRICES. What Will They Do in 2023?

Here it is at long last: the final installment of David Sidoni’s 2023 housing market projection series. You’ve been waiting for it for a long time and now you don’t have to wait any longer. This episode is about PRICES. FINALLY! 
As usual, David is taking a look at the data and listening to the pros to give you his expert opinion on what you can expect in 2023 as a first-time home buyer. It’s time to take this series all the way home.
Here are the biggest takeaways from today’s discussion:
What you really need to research before buying a home
What the economists are predicting for home prices
Whether or not the market will head back to normal
How new home buyers can get in the game
Episode Highlights:
[01:53] Let’s Get One Thing Straight
The general consensus from experts says that we will finally get back to a normal market in 2023 when it comes to prices. But here’s some data to keep you first-time home buyers up at night: 70% of ALL realtors have never sold a home in a normal market. Yes, you did read that right. The market has been all over the place for so long that your realtor likely hasn’t bought or sold a home during the status quo. It’s been a seller’s market for 10 years, and the last 3 years have been bizarre to boot. That’s how insane it’s been. With that in mind, you NEED to research your realtor, especially if you are buying a home for the first time. Make sure they know what they’re doing.
[5:04] What Is UP With Prices in 2023?
David dives back into his extensive research to share economists’ dirt on the situation. According to the industry’s [positive] Pollyannas, home prices are DROPPING. But, they disagree on how much. Some say 5%, some say 8%, and some even go so far to say 10%. 
What are the negative Nancys saying? That home prices will INCREASE. What?! All the more reason you should’ve started planning, um YESTERDAY. But you didn’t. That’s okay. That’s why David’s here to help.
[11:51] You Didn’t Plan Yesterday, Fine. Here’s What Tomorrow Could Hold.
Here’s the bad news. Some experts believe that home prices are only going up. Here’s the good news. Some experts think prices will start to decrease. Here’s the truth bomb from David. Likely, the market will stay pretty tepid throughout 2023. BUT, all of this means that you won’t have to panic buy a home, there will likely be more choices, and lenders will have more options for you to consider. So, a mild win.
Resources Mentioned:
 
https://www.usatoday.com/story/money/personalfinance/real-estate/2022/12/15/housing-market-six-experts-2023-real-estate-industry/10881757002/ 
 
https://www.redfin.com/news/housing-market-predictions-2023/ 
 
https://www.bankrate.com/real-estate/housing-market-predictions-2023/ 
 
https://www.newsweek.com/will-house-prices-drop-2023-real-estate-experts-predictions-1761338 
 
https://www.marketwatch.com/story/house-prices-will-fall-in-2023-but-affordability-will-be-at-its-worst-since-1985-says-capital-economics-11668530061 
 
https://www.yahoo.com/now/heres-where-morgan-stanley-bets-154429100.html 
 
https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/ 
 
https://www.housingwire.com/articles/the-red-hot-housing-market/ 
 
https://www.inman.com/2022/12/28/the-2023-housing-market-a-real-estate-reckoning-is-at-hand/
 

E157: One Factor To Rule Them All: Let’s Talk Inventory

David Sidoni is back for part three in his 2023 housing predictions series. What’s on the menu for this episode? INVENTORY. Jump in and listen to David as he discusses how construction, prices, and supply & demand are all playing a role in this year’s outlook. Expert opinions, hard data, surveys… it’s all there and David leaves no stone unturned.
Here are the biggest takeaways from today’s discussion:
What the decreasing market means for inventory
Housing construction slowed down in 2022
What the experts predict about inventory adjustments this year
How new home buyers can make lemonade out of the market’s lemons
Episode Highlights:
[02:14] We’re Going Down, But Not Crashing
The market has a normal ebb and flow to it, so don’t get too concerned about the decrease. The market will settle back into normal. Data is showing that inventory is still way below what it needs to be, so the basics of supply and demand will be skewed to demand because there’s not enough supply to keep up. And, if the data continues to move in this direction, it’s possible that the market will not settle back into a balance for another 7 years. 
[3:20] New Housing Construction - What Are the Builders Up To?
Typically home construction has been able to balance out demand for homes. But, in 2008, the number of homes being built was cut in half, leaving the market 500,000 homes short every year for 4-5 years. 2012 and 2013 saw those numbers increase, but we’re still several million homes short in comparison to the growing population. 
A current decrease in “housing starts” could set inventory even farther back. Over the past 11 months, builder “sentiment” has declined, indicating that the folks in the industry aren’t feeling too good about increasing supply because of the decreasing construction profit margins.
[11:45] Resale Inventory -  One Man’s Sweet Deal Is Your Bidding War
Resale means that those folks who bought their home during the nice 3% interest rates put their homes on the market. How many will actually put up their house for resale, though? Most economists report that they will not put their houses on the market because of the extremely high interest rates for new home buyers. Some folks will still be selling their homes for the usual reasons (death, divorce, job changes), but this supply will NOT meet demand. 
Resources Mentioned:
 
https://www.usatoday.com/story/money/personalfinance/real-estate/2022/12/15/housing-market-six-experts-2023-real-estate-industry/10881757002/ 
 
https://www.redfin.com/news/housing-market-predictions-2023/ 
 https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/ 
 
https://www.inman.com/2022/12/28/the-2023-housing-market-a-real-estate-reckoning-is-at-hand/ 
 
https://www.bankrate.com/real-estate/housing-market-predictions-2023/ 

E156: Mortgage Rate Predictions for 2023… It Could Be Wild

In 2022, everyone was SHOCKED when mortgage rates leapt from 3% to 7% in just half a year. The sudden increase left a lot of people scared, so the market began screeching to a halt by the end of 2022. Now, mortgage rates are still at 7%, but they may not stay there for long. 
In the second part of his multi-episode series, David Sidoni analyzes data and reports from industry experts to drop some truth bombs about mortgage rates in 2023. There’s a lot of opinions floating around out there about where mortgage rates could be by the end of this year, but David gives it to you straight. The bottom line? If you’re ready to buy a home, get prepared NOW.
Here are the biggest takeaways from today’s discussion:
What’s included in your monthly home payment
Where rates are today and how we got here
How first-time home buyers should interpret predictions for 2023
How skyrocketing rent prices will influence the housing market
Episode Highlights:
[01:19] Let’s Talk About Mortgage Interest Rates
Mortgage rates are an important part of your home buying process because they affect how much you can pay on your home per month. Finding out how much you can afford each month as a first-time home buyer is vital to making a wise purchase decision. To know what all is included in a monthly payment can be abbreviated to PITI: principal, interest, taxes and insurance. 
2022 was both a great and not-so-great year for mortgage rates. The early year started out with a comfortable 3%, but by the end of the year this rate soared to 7% where it  is today. So, how did we get to this number and where could this number go in the future? 
[5:51] How Did We Get Here?
No one had ever seen interest rates change like in 2022 before because rates had never skyrocketed that quickly in recent real estate history. Starting back in 1990, mortgage rates hovered around 10%, dropping gradually until 2012 when they settled around 4% through 2022.
When these rates rose to 7% in the middle of 2022, things screeched to a halt in the second half of the year as everyone waited for better rates. Will they decrease again? No one knows for sure. According to the experts, rates could go down or they could go up. 
[7:57] The Bulls and Bears of 2023
There are both optimists and pessimists when it comes to projections for 2023. A handful of experts are predicting ugly things when it comes to rates in 2023. Some economists even predict that 30-year mortgage rates could climb to 8.75% in 2023 while other pessimistic economists predict rates at 8.5%.
Other economists say that rates will peak at 8% at the beginning of the year and then gradually come down to around 6% by the end of the year. Another economist said that the rates will be totally dependent on inflation. If we hit a recession, which we’re leaning toward, then the rates will drop to about 5%. According to predictive data from the American Association of Realtors, rates could settle at 6% by the end of 2023. 
According to David, first-time home buyers need to get ready to buy ASAP. Start your planning to buy a home as soon as you can so you can navigate the market no matter which way it goes.
[24:15] Bidding Wars During a Market Crash? Explain!
Some new home buyers are losing their prospects to bidding wars. It may not make sense during a market crash, but don’t forget all the factors at play here. We’re going back to episode one here with our analysis of:
Increasing rents
Unpredictable interest rates
Low inventory
Normalizing affordability
Slowing sales
Gradually decreasing prices
All of these are making the market the way it is. So, taking it back to mortgage rates. These rates peaked at their 7%, and are now making a very slow decline. Why is that? Something called the 10-year treasury bond rate which is closely correlated to mortgage rates. Usually these rates are about 2-ish% lower than mortgage rates and they travel together at that percentage difference. Currently, the treasury bond rates are increasing and the percentage difference between the rates has increased to 3%. Looking at these rates is the secret key to really understanding the market in this day and age.
Resources Mentioned:
 
https://www.usatoday.com/story/money/personalfinance/real-estate/2022/12/15/housing-market-six-experts-2023-real-estate-industry/10881757002/ 
 
https://www.redfin.com/news/housing-market-predictions-2023/ 
 
https://www.bankrate.com/real-estate/housing-market-predictions-2023/ 
 
https://www.newsweek.com/will-house-prices-drop-2023-real-estate-experts-predictions-1761338 
 
https://www.marketwatch.com/story/house-prices-will-fall-in-2023-but-affordability-will-be-at-its-worst-since-1985-says-capital-economics-11668530061 
 
https://www.yahoo.com/now/heres-where-morgan-stanley-bets-154429100.html 
 
https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/ 
 
https://www.housingwire.com/articles/the-red-hot-housing-market/ 
 
https://www.inman.com/2022/12/28/the-2023-housing-market-a-real-estate-reckoning-is-at-hand/ 

Ep 155: A Crash or Correction? Let’s Look at 2023 Housing Market Predictions

Headlines are saying that this will be the year of the housing market crash. But are they saying that because it’s true, or just because they want you to read their content? 
In the first part of his multi-episode series, David Sidoni analyzes data and reports from industry experts to give you the real scoop on what 2023 holds for home buyers. Taking a look at rent, mortgage rates, home sales, prices and more, David bypasses the pessimism of the newspapers to tell you the truth: this year, the market will be getting back to normal instead of spiraling toward disaster.
Here are the biggest takeaways from today’s discussion:
Why housing market will likely return to normal in 2023
What the experts mean when they say it’ll be a “slow year”
How first-time home buyers should navigate the slowing market
How skyrocketing rent prices will influence the housing market
Episode Highlights:
[01:48] Here’s What The Experts Are Saying
To help form his predictions for 2023, David tuned in on what industry experts are forecasting. According to his research, economists and notable real estate publications are sharing a relatively cynical perspective on the housing market in the upcoming year. Some even report that there’s a “real estate reckoning at hand.” While that sounds scary — and it could be for those who are working in the industry — it’s actually really good news for you as a home buyer. 
And, while some sources are projecting doom and gloom for 2023, don’t fall prey to that sort of thinking. Instead, it’s most likely that the housing market will simply return to normal. After a red-hot market the past two years, real estate has gotten over the peak and it is settling back into normalcy. 
[10:00] How the Patterns in 2022 Set Up the 2023 Market 
David discusses how some experts’ predictions show that it won’t be a buyer’s market, but instead there will be a better balance between buyers and sellers: AKA a normal market. Home prices and mortgage rates peaked in 2022, meaning that home buyers need to reset their expectations in 2023 as home sales slow down… Some even go so far as to say it will be nobody’s market. 
 
Despite all the uncertainty that will come this year, if you’re ready to buy a house, buy a house! Learning how to navigate this kind of market can turn this potentially sticky situation into an amazing opportunity.
[20:40] Rent Is Going Through the Roof
According to an article from Bloomberg, 1.4 million renters reported a $1200 increase in their bill over the past year. Everyone (and David means everyone) is experiencing a staggering increase in rent from all over the country. Some headlines are reporting that rent is decreasing, but don’t be fooled. They’ve already doubled in the past 5 years, so it’s a stretch to pay the bill even if your rent cost is starting to plateau. As vacancy rates hit an all-time low, landlords will be afraid to keep raising rent in case fewer and fewer people decide to rent over buying a house. So, rent will see a subtle decrease, but nothing to shake a stick at.
Economists say it will take one of two things to tame the insane rent costs:
The government raising rates to force a recession, OR
An increase in housing supply that can sufficiently meet the demand
Unfortunately, there is no way that housing supply will meet demand, so that leaves the market with one option. Believe it or not, this is actually a great time for renters to consider buying a home.
Resources Mentioned:
https://www.bankrate.com/real-estate/housing-market-predictions-2023/ 
https://www.realtor.com/news/trends/2023-the-year-of-the-homebuyer-our-bold-predictions-on-home-prices-mortgage-rates-and-more/ 
https://www.inman.com/2022/12/28/the-2023-housing-market-a-real-estate-reckoning-is-at-hand/