Home sales have been brisk for months, with people all over the world panic buying before prices could climb higher. People were selling their homes in days, not weeks, and for more money than they expected. Competing offers drove prices up further.
CNN Business explains, "Among the 37 wealthy countries that make up the Organization for Economic Cooperation and Development (OECD), real house prices rose by almost 7% between the fourth quarter of 2019 and the fourth quarter of 2020—the fastest year-on-year growth in the past two decades."
People wondered: How long could this housing boom last, especially during a global pandemic? All over the country, many folks were buying homes for (arguably) more than they could afford. Where was their confidence coming from?
Low rates empower homeowners to cash out some equity to make much-needed repairs, the improvements they long for, or both.
Now that the boom is ending, homeowners who contemplated selling at the top of the market are switching gears and thinking of what repairs and improvements they can make in order to fall in love with their existing home all over again.
Snapshot: The End of a Boom
The most recent numbers are sufficient to call the housing boom over. "Sales of new single-family homes fell to an annualized rate of 676,000." That figure is 19.4% below the June 2020 level of 839,000, reports CNBC.
- Sales of new homes fell 19.4% compared to a year ago, June 2020.
- Prices are no longer rising as much, with a 6% rise in median home prices since June 2020.
- The inventory of new homes for sale jumped about 15% month over month (from a 5.5-month supply to 6.3). Compared to last autumn, supply today is up 80% (from 3.5 months to 6.3).
Rates for a Cash-Out Refi Still Low
Thankfully, one industry number that hasn't changed much is mortgage interest rates. They are still historically low. The monthly savings of a regular refi, or a lump sum of cash taken out during a cash-out refi, remain attractive ways to fund home repairs and improvements.
"Borrowing remains cheap," Kate Everett-Allen said to CNN. She is the head of international residential research at real estate consultancy Knight Frank. "This time last year we thought it was going to be 2008 all over again."
Low rates empower homeowners to cash out some of the equity in their home and make much-needed repairs, the improvements they long for, or both. They don't have to buy a home with a spacious wooden deck; they can build one and increase the livable space of the home they already have. They don't have to buy up to a home with a pool; they can install their own oasis for family fun and exercise.
Bring Exciting Ideas Home
People are bringing ideas from home shopping back to their current abode. One example was seen recently on the long-running reality show Love It or List It (HGTV) in the season 16 premiere episode, "To Downsize or Not to Downsize."
In the show, empty nesters looked at homes closer to the wife's work, smaller homes with smaller grounds for the husband to maintain. In one prospective home the wife was struck by the usefulness of an upstairs laundry room.
Having returned from the shopping expedition, the wife said that if the show's home design expert could move their main-floor laundry room upstairs, such an improvement would go a long way to keeping the couple in their current home. Sometimes a compelling reason to move can be brought home as an improvement project.
What Are Your Dream Features?
An upstairs laundry room isn't everyone's must-have feature. What makes any person love a home is highly personal, and there are so many choices. Home design website Houzz compiled 20 dream home ideas that can serve as a jumping-off point for your imagination. Here are the top 10 dream features.
- A grand kitchen
- Chiseled-edge countertops
- Pullout drawer for stand mixer
- Double islands
- Diner seating off the kitchen
- Stylish laundry room
- Durable fabrics in popular rooms
- Vintage leather sofa
- Custom light fixture
- Outdoor living space, with deck, hot tub, and lounge seating
What enticing home features would you move to obtain? An open-concept living area? A modernized kitchen? Outdoor living space? Well, you might not have to move to get it. Look into a cash-out refinance to fund the home improvement project that could make you fall in love with your home all over again.