Americans Are Turning Spare Bedrooms Into Giant Closets

As stores disappear, shopping in your own wardrobe becomes the ultimate luxury.

Amanda MullMay 2021 Issue
https://www.theatlantic.com/magazine/archive/2021/05/giant-closets/618393

This article was published online on April 8, 2021.

When I was a kid, my mother loved to take me out for some light trespassing. This was the 1990s, during which the Atlanta metropolitan area’s population grew nearly 40 percent, and housing construction boomed to match. McMansions were sprouting up on seemingly every tract of available land in my family’s once-modest suburb, and my mom—I say this affectionately—is the nosiest person alive. Often, in the middle of running errands, she’d whip her station wagon into some new development, surveil the scene until she found a house that looked finished enough, and see if the front door was unlocked. Or maybe the side door.

Even when I was in elementary school, her behavior struck me as wild. Mom insisted that the builders left the doors open so people would come in, look around, and buy the houses. I’m still not sure what to make of this logic; it’s difficult to measure your own family’s weird behavior against what happens unseen in other families.

What I did see, though, were the interiors of the houses other families would inhabit. In spite of my worries about going to child jail for crimes against McMansions (as a white kid in a mostly white suburb, I had a limited sense of the more dire consequences we might have faced if we hadn’t blended in quite so well), I understood instinctively why my mother loved traipsing through them. It was anticipatory voyeurism, an opportunity to gaze upon the granite countertops and built-in bookshelves that would soon greet the upper-middle-class families streaming into Atlanta from the Northeast and Midwest. It was also aspirational; maybe someday we’d replace our laminate counters, which I could already tell were not as fancy as the gleaming, speckled slabs of stone we admired.

Mom’s favorite parts of these houses were the kitchens and bathrooms, which are traditionally the spaces that builders rely on to endear buyers to a property. I, on the other hand, loved the closets. Our house, built in the early ’80s, had the then-basic suburban version—two bifold doors obscuring a rod for hangers and a shelf above it. In the newer homes, though, the walk-in reigned supreme. The concept blew my mind: One day, when I grew up, I might have so many pretty clothes that they’d need their own tiny room.

At first, my fascination felt like mine alone, but I soon saw it reflected in the pop culture I had begun voraciously consuming. The enormous closets of Candy Spelling, the wife of the Beverly Hills, 90210 producer Aaron Spelling, were a tabloid mainstay for much of the ’90s. In the 1995 movie Clueless, the fashion-obsessed main character uses a computer program to dig through her wardrobe; a motorized system then brings forth her selections. The 2000s gave us MTV Cribs, which took viewers inside sprawling celebrity homes, and made Mariah Carey’s department-store-scale dressing quarters the stuff of legend. And in 2008, when Carrie Bradshaw agreed to marry Mr. Big in the Sex and the City movie, she refused an engagement ring—instead, she wanted “a really big closet.”

Since then, with the help of ever-cheaper clothes, more and more Americans have sought to follow Carrie’s lead. The closet has transformed both spatially and spiritually, from cramped afterthought to personal sanctuary. At the very high end, closets can span multiple rooms and comprise a near-limitless set of amenities—vanities, desks, wet bars. They can even bear an uncanny resemblance to boutiques. As shopping continues to shift online, the ultimate luxury might be building a store of your own.

None of this is new; in fact, it’s very, very old. From the 1300s through the 1800s, Europeans used the word closet to refer to a space that really was a room unto itself. As the late architecture curator Henry Urbach once explained, the term then described “a place for retreat, prayer, study, or speculation.” Such rooms were also used to display precious objects, but above all they were havens, their purpose as much emotional as functional.

What most Americans now think of as a closet—a small void adjacent to a larger room—first emerged around 1840, when consumers found themselves needing a place to store all the goods that industrialization had produced. This closet “obscured itself by receding into the wall, and it attempted to ‘disappear’ the family’s stuff,” writes Shannon Mattern, an anthropologist at the New School. In this way, it allowed people to “relish in consumption and enjoy their material possessions”—but discreetly, while “maintaining a semblance of frugality and moral propriety.”

That model held for the next century or so, until the postwar American economy lurched into motion, setting the country on the conveyor belt that would eventually deliver it to Kylie Jenner’s mirrored hall of designer handbags, a tour of which has been viewed more than 15 million times on YouTube. Prosperity settled in the suburbs, where millions of families moved into progressively bigger homes. Today, the average new single-family home is more than 1,000 square feet larger than it was in the early 1970s, even though new homes have, on average, fewer people living in them. (Regardless of Americans’ lack of need for giant houses, our zoning laws create them; many local governments have made building apartments or condos effectively illegal, and they are supported in this by homeowners, many of whom fear attracting less wealthy neighbors but welcome anything that pumps up property values, such as bigger houses down the street. Developers are happy to comply.)

American homes not only have more space and fewer people than they once did; they also have a lot more stuff. “We’re conditioned that we need the right thing for the right activity,” Jill LaRue-Rieser, the senior vice president and chief merchandising officer for the custom-storage company California Closets, told me. As clothing in particular has gotten less expensive and more bountiful, big closets have become a selling point unto themselves. “The builders really figured it out,” she said. “If they could hook women with enough space for their shoes, they could sell the whole house.” Which is why, for decades, the country’s closets have had no reason to do anything but grow, fueling the perpetual-motion machine of the modern wardrobe—you have more space, so you don’t hesitate to buy more stuff, but eventually your big new closets seem cramped and small. At that point, maybe it’s time for a new place with even bigger closets.

This cycle kicked into high gear in the mid-’90s, as HGTV helped turn home improvement into a spectator sport. Unbeknownst to us, my family’s habit of browsing new houses was an expression of a much more widely felt curiosity about how others lived—and about how viewers could maybe live one day, too. Since the HGTV channel launched, in 1994, with a modest slate of shows about remodeling and interior design, it has become a cultural juggernaut; in 2019, it had the fourth-highest viewership of any cable channel. By giving people insight into how they might transform their homes, a process that had long been opaque, it’s been a tremendous boon to the home-improvement industry. When HGTV started, Home Depot and Lowe’s drew a little more than $18 billion in combined net sales; by 2018, that number had grown to almost $180 billion. Once viewers understood what was possible, many of them became intensely interested in changing their homes—and the era’s builder-grade, bare-bones walk-in closets provided a low-risk, high-reward project.

Home-improvement entertainment and wealth voyeurism have since joined forces with social media: Pinterest runs on the energy generated by people plotting the homes and wardrobes of their dreams. YouTube video tours of particularly grandiose closets rack up millions of views. On Instagram, aesthetically pleasing home-organization techniques are hungered after so ferociously that the Home Edit, which began as two friends cleaning out closets in Nashville, now has more than 5 million followers, a Netflix show, and a line of products at the Container Store—a company that, incidentally, opened two closet-only concept stores in the months before the pandemic began.

For the truly acquisitive, working within the dimensions of existing closets doesn’t cut it. That’s where other parts of America’s unusually giant homes come in. “People are using spare rooms,” Michaelle Bradford, the editor of Closets & Organized Storage, an industry trade publication, told me. Guest rooms are nice, but your parents might come to visit only twice a year. Your clothes, meanwhile, are a permanent resident of your home.

Bradford said that converting a spare room to a closet has become particularly popular in recent years because it accommodates various internet home-design fantasies: natural lighting, room for a center island, seating areas, and space to show off particularly beloved collections of sunglasses or handbags or sneakers. “If people have something they value a lot, they want to create a perfect space for it, to highlight it,” she told me.

For years, this level of fantasy fulfillment was available only to the wealthy. More recently, though, materials prices have come down and DIY products have become more sophisticated. California Closets and Martha Stewart recently launched a joint line of modular storage products designed to be moved from rental to rental. All of which means that those at the top have to make even more dramatic transformations to keep their lavish homes ahead of the pack. Lisa Adams, the owner of LA Closet Design, whose projects start at $50,000 and can easily exceed $1 million, told me her clients’ closets might be better described as “glamour compounds.” Sometimes they’re two or three stories; sometimes they have their own elevators; and sometimes, as was the case with one Houston client, they become the central showpiece at house parties, more brass ring than practical storage solution.

When Adams started her business in 2007, she said, people wanted a lot of cabinetry—drawers and doors to hide all their stuff. Now the trend has reversed, and she finds much of her design inspiration in the places from whence her clients’ wardrobes came: luxury stores. “I’ll tell clients, ‘Ultimately, you want to feel like you’re shopping in your own closet,’ ” she said. For people with extensive wardrobes, the ways that stores display inventory can be genuinely useful. But the concerns are not purely practical. “There’s a reason why people like to shop in boutiques,” Adams said. “The good lighting, things having a place, it’s uncluttered, there’s seating, there’s champagne—it’s just the whole feeling.”

In other words, extreme closets may be starting to resemble those of, say, 16th-century Europe: a collection of prized things on loving display, a comfortable seating area in the innermost sanctum of one’s home, maybe a little desk area to work in solitude. “It’s about being proud of your space, feeling really good and calm in your space,” Adams said. Just like the Renaissance-era closet enthusiasts—though they probably lacked a wine or coffee station.

Maybe it’s not so surprising that the earliest closets and the latest ones are linked across hundreds of years of existence and many physical iterations. In human history, the pursuit of personal space and privacy has motivated people to do far stranger things than put some shelving, a mini-fridge, and a club chair in the extra bedroom they rarely use; it was among the primary reasons for the establishment of the suburbs themselves.

In that way, the American closet’s expansion is the physical consequence of so many things about modern life in this country: the everyday attempts of regular people to reconcile an endless stream of new and improved consumer goods with their space and budget; to figure out whether they actually need—or even want—the things and ideas that are marketed to them; to have a room entirely of one’s own.

I don’t know if a closet can do all that. I do know, though, that once you hang up all your clothes, they provide a pretty good acoustic barrier to the noise of the outside world. I also know how isolating the realization of our desires can sometimes turn out to be.


This article appears in the May 2021 print edition with the headline “The Boutique in Your Bedroom.”
Amanda Mull is a staff writer at The Atlantic.

4 Major Reasons Households in Forbearance Won’t Lose Their Homes to Foreclosure

4 Major Reasons Households in Forbearance Won’t Lose Their Homes to Foreclosure | MyKCM

There has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program. Some assume there could potentially be millions of foreclosures ready to hit the market. However, there are four reasons that won’t happen.

1. Almost 50% Leave Forbearance Already Caught Up on Payments

According to the Mortgage Bankers Association (MBA), data through March 28 show that 48.9% of homeowners who have already left the program were current on their mortgage payments when they exited.

  • 26.6% made their monthly payments during their forbearance period
  • 14.7% brought past due payments current
  • 7.6% paid off their loan in full

This doesn’t mean that the over two million still in the plan will exit exactly the same way. It does, however, give us some insight into the possibilities.

2. The Banks Don’t Want the Houses Back

Banks have learned lessons from the crash of 2008. Lending institutions don’t want the headaches of managing foreclosed properties. This time, they’re working with homeowners to help them stay in their homes.

As an example, about 50% of all mortgages are backed by the Federal Housing Finance Agency (FHFA). In 2008, the FHFA offered 208,000 homeowners some form of Home Retention Action, which are options offered to a borrower who has the financial ability to enter a workout option and wants to stay in their home. Home retention options include temporary forbearances, repayment plans, loan modifications, or partial loan deferrals. These helped delinquent borrowers stay in their homes. Over the past year, the FHFA has offered that same protection to over one million homeowners.

Today, almost all lending institutions are working with their borrowers. The report from the MBA reveals that of those homeowners who have left forbearance,

  • 35.5% have worked out a repayment plan with their lender
  • 26.5% were granted a loan deferral where a borrower does not have to pay the lender interest or principal on a loan for an agreed-to period of time
  • 9% were given a loan modification

3. There Is No Political Will to Foreclose on These Households

The government also seems determined not to let individuals or families lose their homes. Bloomberg recently reported:

“Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said. The Consumer Financial Protection Bureau (CFPB) warning is tied to forbearance relief that’s allowed millions of borrowers to delay their mortgage payments due to the pandemic…mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans.”

The CFPB is proposing a new set of guidelines to ensure people will be able to retain their homes. Here are the major points in the proposal:

  • The proposed rule would provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure until after December 31, 2021.
  • The proposed rule would permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of an incomplete application.
  • The proposal rule wants temporary changes to certain required servicer communications to make sure borrowers receive key information about their options at the appropriate time.

A final decision is yet to be made, and some do question whether the CFPB has the power to delay foreclosures. The entire report can be found hereProtections for Borrowers Affected by the COVID-19 Emergency Under the Real Estate Settlement Procedures Act (RESPA), Regulation X.

4. If All Else Fails, Homeowners Will Sell Their Homes Before a Foreclosure

Homeowners have record levels of equity today. According to the latest CoreLogic Home Equity Report, the average equity of mortgaged homes is currently $204,000. In addition, 38% of homes do not have a mortgage, so the level of equity available to today’s homeowners is significant.

Just like the banks, homeowners learned a lesson from the housing crash too.

“In the same way that grandparents and great grandparents were shaped by the Great Depression, much of the public today remembers the 2006 mortgage meltdown and the foreclosures, unemployment, and bank failures it created. No one with any sense wants to repeat that experience…and it may explain why so much real estate equity remains mortgage-free.”

What does that mean to the forbearance situation? According to Black Knight:

“Just one in ten homeowners in forbearance has less than 10% equity in their home, typically the minimum necessary to be able to sell through traditional real estate channels to avoid foreclosure.”

Bottom Line

The reports of massive foreclosures about to come to the market are highly exaggerated. As Ivy Zelman, Chief Executive Officer of Zelman & Associates with roughly 30 years of experience covering housing and housing-related industries, recently proclaimed:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

Don’t Sell on Your Own Just Because It’s a Sellers’ Market

Don’t Sell on Your Own Just Because It’s a Sellers’ Market | MyKCM

In a sellers’ market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market as an opportunity to FSBO. Let’s unpack why that’s a big mistake and may actually cost you more in the long run.

According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as a FSBO did so to avoid paying a commission or fee. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of an agent.

The NAR report explains:

FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000…Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.”

Don’t Sell on Your Own Just Because It’s a Sellers’ Market | MyKCM

When the seller knew the buyer, that amount was even lower, coming in at $176,700 (See graph below):That’s a lot of money to risk losing when you FSBO – far more than what you’d save on commission or other fees. Despite the advantages sellers have in today’s market, it’s still crucial to have the support of an expert to guide you through the process. Real estate professionals are trained negotiators with a ton of housing market insights that average homeowners may never have. An agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal when you do.

Bottom Line

If you’re ready to sell your house this year and you’re considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable and experienced real estate agent. Let’s connect to discuss how a trusted advisor can help you, especially in today’s market.

Latest Jobs Report: What Does It Mean for You & the Housing Market?

Latest Jobs Report: What Does It Mean for You & the Housing Market? | MyKCM

Last Friday, the Bureau of Labor Statistics released a very encouraging jobs report. The economy gained 916,000 jobs in March – well above expert projections of 650,000 to 675,000. The unemployment rate fell again and is now at 6%.

What does this mean for you?

Our lives are deeply impacted by our nation’s economy. The better the economy is doing overall, the better most individuals in the country will do as well. Here’s a look at what four experts told the Wall Street Journal after reviewing last week’s report.

Michael Feroli, JPMorgan Chase:

“The powerful tailwind of the reopening of economic activity appears to be gathering force; while the level of employment last month was still 8.4 million positions below that which prevailed before the pandemic, it is reasonable to expect that a majority of those lost jobs will be recouped in coming months.”

Mike Fratantoni, Mortgage Bankers Association:

“We fully expect that this pace of job gains will continue for months, and anticipate that the unemployment rate, now at 6%, will be well below 5% by the end of the year.”

Paul Ashworth, Capital Economics:

“With the vaccination program likely to reach critical mass within the next couple of months and the next round of fiscal stimulus providing a big boost, there is finally real light at the end of the tunnel.”

Jason Schenker, Prestige Economics:

“People are getting back to work and the vaccine isn’t just inoculating the population, it’s clearly inoculating the economy.”

What does this mean for residential real estate?

Today, the biggest challenge for homebuyers is the lack of homes currently for sale. With listing inventory down 52% from a year ago, bidding wars are skyrocketing. As a result, home prices are climbing.

One answer to this challenge is to build more homes to satisfy the demand. The latest jobs report gives hope for new housing construction, and therefore brings hope to buyers as well. Here’s what three industry economists said about the increase in construction jobs revealed in the report:

Lawrence Yun, Chief Economist, National Association of Realtors:

“Construction jobs boomed in March, one of the largest monthly gains ever. This raises the prospect for more home building and more inventory reaching the market in the upcoming months. The housing market has been hot with fast rising home prices but has been constrained by a lack of supply. By hiring more workers and building more homes, home prices will move to a manageable level to give more Americans a shot at ownership.”

Odeta Kushi, Deputy Chief EconomistFirst American:

“Great jobs report for a housing market in an inventory crisis. Residential construction building jobs increased 3.9% from pre-2020 recession peak in Feb. 2020. The construction industry remains a labor-intensive industry. We need more hammers at work to build more homes.”

Robert Dietz, Chief EconomistNational Association of Home Builders:

“Good job numbers in March for residential construction. 37,000 gain from Feb to March. 3.03 million total employment for home builders and remodelers, and up 49,100 from Jan 2020.”

Bottom Line

An improving economy with a falling unemployment rate will benefit households across the country, as well as the overall housing market.

Homeownership Is Full of Financial Benefits

Homeownership Is Full of Financial Benefits | MyKCM

Fannie Mae survey recently revealed some of the most highly-rated benefits of homeownership, which continue to be key drivers in today’s power-packed housing market. Here are the top four financial benefits of owning a home according to consumer respondents:

  • 88% – a better chance of saving for retirement
  • 87% – the best investment plan
  • 85% – the chance to be better off financially
  • 85% – the chance to build up wealth

Additional financial advantages of homeownership included in the survey are having the best overall tax situation and being able to live within your budget.

Does homeownership actually give you a better chance to build wealth?

No one can question a person’s unique feelings about the importance of homeownership. However, it’s fair to ask if the numbers justify homeownership as a financial asset.

Last fall, the Federal Reserve released the Survey of Consumer Finances, a report done every three years, with the latest edition covering through 2019. Their findings confirmed that homeownership is a clear financial benefit. The survey found that homeowners have forty times higher net worth than renters ($255,000 for homeowners compared to $6,300 for renters).

Homeownership Is Full of Financial Benefits | MyKCM

The difference in net worth between homeowners and renters has continued to grow. Here’s a graph showing the results of the last four Fed surveys:The above graph only includes data through 2019, but according to CoreLogic, the equity held by homeowners grew by $26,300 over the last twelve months alone. That means the gap between the net worth of homeowners and renters has probably widened even further over the last year.

Homeownership Is Full of Financial Benefits | MyKCM

Some might argue the difference in net worth may be due to homeowners normally having larger incomes than renters and therefore the ability to save more money. However, a study by First American shows homeowners have greater net worth than renters regardless of their income level. Here are the findings:Others may think homeowners are older and that’s why they have a greater net worth. However, a Joint Center for Housing Studies of Harvard University report on homeowners and renters over the age of 65 reveals:

“The ability to build equity puts homeowners far ahead of renters in terms of household wealth…the median owner age 65 and over had home equity of $143,500 and net wealth of $319,200. By comparison, the net wealth of the same-age renter was just $6,700.”

Homeowners 65 and older have 47.6 times greater net worth than renters.

Bottom Line

The idea of homeownership as a direct way to build your net worth has met the test of time. Let’s connect if you’re ready to take steps toward becoming a homeowner.

NAR Finds Home Staging Helps Buyers Visualize, Homes Sell Faster

April 6, 2021Media Contact: Quintin Simmons 202-383-1178
NAR Finds Home Staging Helps Buyers Visualize, Homes Sell Faster

Key Highlights

  • Eighty-two percent of buyers’ agents said staging made it easier for a buyer to visualize the property as a future home.
  • More than 7 in 10 agents find photos, videos and virtual tours more important since the start of the COVID-19 pandemic.
  • Agents say TV shows depicting the homebuying process have impacted their business.

WASHINGTON (April 6, 2021) – A new survey from the National Association of Realtors® reveals that home staging continues to be a significant part of the home buying and selling process.

The biennial report, the 2021 Profile of Home Staging, examines the elements of home staging, including the perspectives of both buyers’ and sellers’ agents, the role of television programing and the expectations of buyers.

“Staging a home helps consumers see the full potential of a given space or property,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “It features the home in its best light and helps would-be buyers envision its various possibilities.”

Buyers’ agents overwhelmingly agreed, as 82% said staging a home made it easier for a buyer to visualize the property as a future home.

These agents also said that visuals themselves are helpful, even more so in relation to buying a house during the coronavirus outbreak. Eighty-three percent of buyers’ agents said having photographs for their listings was more important since the beginning of the pandemic. Seventy-four percent of buyers’ agents said the same about videos, and 73% said having virtual tours available for their listings was more important in the wake of COVID-19.

“At the start of the pandemic, in-person open house tours either diminished or were halted altogether, so buyers had to rely on photos and virtual tours in search of their dream home,” said Lautz. “These features become even more important as housing inventory is limited and buyers need to plan their in-person tours strategically.”

Staging also increased the sum buyers were willing to spend for a property, according to the report. Twenty-three percent of buyers’ agents said that home staging raised the dollar value offered between 1% and 5%, compared to similar homes on the market that hadn’t been staged.

Coincidently, the response from sellers’ agents was nearly identical, as 23% reported a 1% to 5% price increase on offers for staged homes.

Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%. None of the agents for sellers reported that home staging had a negative impact on the property’s dollar value.

Moreover, 31% said that home staging greatly decreased the amount of time a home spent on the market.

Exactly which parts of a home to stage vary, although living rooms (90%) and kitchens (80%) proved to be the most common, followed closely by master bedrooms (78%) and dining rooms (69%). As many workers were forced to work from home due to the pandemic, 39% staged a home office or office space.

Television programing played a noticeable role in how buyers viewed a potential property, according to Realtors®. Agents surveyed said that typically 10% of buyers believed homes should look the way they appear on TV shows. Sixty-three percent said buyers requested their home look like homes staged on television. Sixty-eight percent of Realtors® reported that buyers were disappointed by how homes appeared compared to those seen on TV shows.

In some cases, agents found that TV shows could influence a buyer’s perspective about a home. Seventy-one percent of respondents said that TV shows that depict the buying process impacted their business by setting unrealistic or increased expectations. Sixty-one percent said that TV programs set higher expectations of how homes should look, while 27% said that TV shows result in more educated home buyers and sellers.

“The magic of television can make a home transformation look like it happened in a quick 60-minute timeframe, which is an unrealistic standard,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and broker/owner of Prominent Properties Sotheby’s International Realty. “I would advise buyers and sellers alike that before house hunting or before listing, they connect with a trusted Realtor® to get a reasonable sense of what’s out there and an idea of what to expect.”

Eight-one percent of those surveyed said buyers had ideas about where they wanted to live and what they wanted in an ideal home (76%) before they began the buying process.

Forty-five percent of surveyed Realtors® said they have seen no change in the share of buyers who planned to flip a home in the last five years, while 42% said they had.

Also, 59% said they have seen an increase in the buyers who planned to remodel a home in the last five years, while 34% said they have seen no change. Agents surveyed said that typically 25% of buyers who plan to remodel will do so within the first three months of owning their home.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

The Takeaway:
Staging works! I can help you stage your home to make the greatest impact on buyers and to showcase your home so you can get the highest price for the best deal! I am a trained stager and I also like to hire a staging consultant for my sellers. It helps you maximize the potential of your home and your return.

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year | MyKCM

If you’re planning to buy a home this year, saving for a down payment is one of the most important steps in the process. One of the best ways to jumpstart your savings is by starting with the help of your tax refund.

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year | MyKCM

Using data from the Internal Revenue Service (IRS), it’s estimated that Americans can expect an average refund of $2,925 when filing their taxes this year. The map below shows the average anticipated tax refund by state:Thanks to programs from the Federal Housing Authority, Freddie Mac, and Fannie Mae, many first-time buyers can purchase a home with as little as 3% down. In addition, Veterans Affairs Loans allow many veterans to put 0% down. You may have heard the common myth that you need to put 20% down when you buy a home, but thankfully for most homebuyers, a 20% down payment isn’t actually required. It’s important to work with your real estate professional and your lender to understand all of your options.

How can your tax refund help?

If you’re a first-time buyer, your tax refund may cover more of a down payment than you realize.

Your Tax Refund and Stimulus Savings May Help You Achieve Homeownership This Year | MyKCM

If you take into account the median home sale price by state, the map below shows the percentage of a 3% down payment that’s covered by the average anticipated tax refund:The darker the blue, the closer your tax refund gets you to homeownership when you qualify for one of the low down payment programs. Maybe this is the year to plan ahead and put your tax refund toward the down payment on a home.

Not enough money from your tax return? 

A recent paper from the National Bureau of Economic Research found that, of the households that received a stimulus check last year, “One third report that they primarily saved the stimulus money.” If you had the opportunity to save your Economic Impact Payments, you may consider putting that money toward your down payment or closing costs as well. Your trusted real estate professional can also advise you on the down payment assistance programs available in your area.

Bottom Line

Saving for a down payment can seem like a daunting task, but it doesn’t have to be. This year, your tax refund and your stimulus savings could add up big when it comes to reaching your homeownership goals.

Today’s Mortgage Rates Are Up From A Week Ago | April 3 & 4, 2021

By Leslie Cook April 3, 2021
https://money.com/todays-mortgage-rates-april-3-2021/

The latest average rate offered for a 30-year fixed rate mortgage is 3.6%. That’s up from a week ago, though rates have stayed in a relatively tight range all week.

Most other loan types are up for the week as well. Nonetheless, rates are low historically.

Even borrowers with the highest credit scores and large down payments, rarely saw rates below 4% low until the last few years. So, if you are looking to buy a home with a mortgage or refinancing an existing loan it may still be a good time.

  • The latest rate on a 30-year fixed-rate mortgage is 3.6%.
  • The latest rate on a 15-year fixed-rate mortgage is 2.637%.
  • The latest rate on a 5/1 jumbo ARM is 2.968%.
  • The latest rate on a 7/1 conforming ARM is 4.474%.
  • The latest rate on a 10/1 conforming ARM is 4.724%.

Current 30-year fixed mortgage rates

  • The 30-year rate is 3.6%.
  • That’s a one-day decrease of 0.017 percentage points.
  • That’s a one-month increase of 0.264 percentage points.

The interest rate on a 30-year fixed-rate mortgage and the required monthly payment won’t change over the life of the loan. If paid as required, the loan will be paid off in 360 months unless you refinance or sell the home. You can also pay the loan off in a lump sum at any time or pay extra each month.

A 30-year loan will have a higher interest rate compared to a shorter-term loan like a 15 year. The monthly payments will be lower because the balance is spread over a longer period of time. You will pay more in total interest on a 30-year mortgage, however, because you’ll be paying a higher rate for a longer time. Current 15-year fixed mortgage rates

  • The 15-year rate is 2.637%.
  • That’s a one-day decrease of 0.014 percentage points.
  • That’s a one-month increase of 0.146 percentage points.

With a 15-year fixed-rate mortgage, your interest rate and monthly payment won’t change throughout the full term of the loan. By paying only the required amount each month, the mortgage will be paid off in 180 months. You can pay the loan off before the full term by making a lump sum payment or paying extra each month.

Compared to a 30-year loan, the interest rate on a 15-year mortgage will be lower but the monthly payment will be higher because you’re paying it off in half the time. However, you will save on overall interest because you’re paying a lower rate over half the time.

Borrowers who can afford the higher monthly payments may opt for a 15-year loan in order to pay the debt off faster or save on interest.

Current 5/1 jumbo adjustable-rate mortgage rates

  • The 5/1 ARM rate is 2.968%.
  • That’s a one-day decrease of 0.002 percentage points.
  • That’s a one-month decrease of 0.045 percentage points.

The interest rate on an adjustable-rate mortgage will be fixed for an initial period. Once that set time ends, the rate can either increase or decrease according to market conditions. Consequently, the monthly payment won’t change during the fixed-rate period but can change if the rate changes.

As an example, a 5/1 adjustable-rate mortgage will have a fixed rate during the first five years, then the rate will reset once a year. Other common adjustable-rate loan terms include a 7/1 and a 10/1. All ARMs will be paid off in 360 months.

The initial low rate can make a 5/1 ARM popular among borrowers who don’t plan on keeping the home beyond the fixed-rate period. However, if they do decide to stay in the home, the should be aware that the interest rate could increase at some point in the future.

Current VA, FHA and jumbo loan rates

The average rates for FHA, VA and jumbo loans are:

  • The rate on a 30-year FHA mortgage is 3.367%.
  • The rate on a 30-year VA mortgage is 3.452%.
  • The rate on a 30-year jumbo mortgage is 3.73%.

Current mortgage refinance rates

The average rates for 30-year loans, 15- year loans and 5/1 jumbo ARMs are:

  • The refinance rate on a 30-year fixed-rate refinance is 3.886%.
  • The refinance rate on a 15-year fixed-rate refinance is 2.94%.
  • The refinance rate on a 5/1 jumbo ARM is 3.407%.
  • The refinance rate on a 7/1 conforming ARM is 4.777%.
  • The refinance rate on a 10/1 conforming ARM is 5.022%.

Where are mortgage rates heading this year?

Mortgage rates sunk through 2020. Millions of homeowners responded to low mortgage rates by refinancing existing loans and taking out new ones. Many people bought homes they may not have been able to afford if rates were higher.

In January 2021, rates briefly dropped to the lowest levels on record, but trended higher through the month and into February.

Looking ahead, experts believe interest rates will rise more in 2021, but modestly. Factors that could influence rates include how quickly the COVID-19 vaccines are distributed and when lawmakers can agree on another economic relief package. More vaccinations and stimulus from the government could lead to improved economic conditions, which would boost rates.

While mortgage rates are likely to rise this year, experts say the increase won’t happen overnight and it won’t be a dramatic jump. Rates should stay near historically low levels through the first half of the year, rising slightly later in the year. Even with rising rates, it will still be a favorable time to finance a new home or refinance.

Factors that influence mortgage rates include:

  • The Federal Reserve. The Fed took swift action when the pandemic hit the United States in March of 2020. The Fed announced plans to keep money moving through the economy by dropping the short-term Federal Fund interest rate to between 0% and 0.25%, which is as low as they go. The central bank also pledged to buy mortgage-backed securities and treasuries, propping up the housing finance market. The Fed has reaffirmed its commitment to these policies for the foreseeable future multiple times, most recently at a late January policy meeting.
  • The 10-year Treasury note. Mortgage rates move in lockstep with the yields on the government’s 10-year Treasury note. Yields dropped below 1% for the first time in March, and have been slowly rising since then. Currently, yields have been hovering above 1% since the beginning of the year, pushing interest rates slightly higher. On average, there is typically a 1.8 point “spread” between Treasury yields and benchmark mortgage rates.
  • The broader economy. Unemployment rates and change in gross domestic product are important indicators of the overall health of the economy. When employment and GDP growth are low, it means the economy is weak, which can push interest rates down. Thanks to the pandemic, unemployment levels reached all-time highs early last year and have not yet recovered. GDP also took a hit, and while it has bounced back somewhat, there is still a lot of room for improvement.

Tips for getting the lowest mortgage rate possible

There is no universal mortgage rate that all borrowers receive. Qualifying for the lowest mortgage rates takes a little bit of work and will depend on both personal financial factors and market conditions.

Check your credit score and credit report. Errors or other red flags that may be dragging your credit score down. Borrowers with the highest credit scores are the ones who will get the best rates, so checking your credit report before you start the house-hunting process is key. Taking steps to fix errors will help you raise your score. If you have high credit card balances, paying them down can also provide a quick boost.

Save up money for a sizeable down payment. This will lower your loan-to-value ratio, which means how much of the home’s price the lender has to finance. A lower LTV usually translates to a lower mortgage rate. Lenders also like to see money that has been saved in an account for at least 60 days. It tells the lender you have the money to finance the home purchase.

Shop around for the best rate. Don’t settle for the first interest rate that a lender offers you. Check with at least three different lenders to see who offers the lowest interest. Also consider different types of lenders, such as credit unions and online lenders in addition to traditional banks.

Also take time to find out about different loan types. While the 30-year fixed-rate mortgage is the most common type of mortgage, consider a shorter-term loan like a 15-year loan or an adjustable-rate mortgage. These types of loans often come with a lower rate than a conventional 30-year mortgage. Compare the costs of all to see which one best fits your needs and financial situation. Government loans — such as those backed by the Federal Housing Authority, the Department of Veterans Affairs and the Department of Agriculture — can be more affordable options for those who qualify.

Finally, lock in your rate. Locking your rate once you’ve found the right rate, loan product and lender will help guarantee your mortgage rate won’t increase before you close on the loan.

Our mortgage rate methodology

Money’s daily mortgage rates show the average rate offered by over 8,000 lenders across the United States the most recent business day rates are available for. Today, we are showing rates for Thursday, April 1. Our rates reflect what a typical borrower with a 700 credit score might expect to pay for a home loan right now. These rates were offered to people putting 20% down and include discount points.