Top 3 Real Estate Strategies to Conquer 7% Mortgage Interest Rates When Buying A Home
I'm Michael Citron, the leader of the top-selling real estate team in Parkland and the foremost realtors in South Florida. If you find value in this video, please hit the like button. For those who really enjoy our content, consider subscribing to stay updated on our weekly releases and support our channel.
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In this video, we'll explore three strategies for harnessing your home equity to become a more influential buyer in today's market. Afterward, we'll delve into the latest Parkland real estate statistics, encompassing sales and mortgage rates, providing valuable insights for homeowners. Lastly, we'll discuss our upcoming Elevate Parkland event, which is just under a month away, and we're thrilled to report that we already have over a hundred registered attendees.
Before we dive into these topics, I'd like to express my gratitude for your viewership. If you find any of the information discussed in this video intriguing, please don't hesitate to like, comment, and subscribe to our channel. Now, let's explore the three strategies for maximizing your $300,000 home equity in today's market.
Home equity represents the money you've paid off on your mortgage, essentially the difference between your home's current value and the remaining mortgage balance. If you purchased a home in the past few years, it's highly likely that you've built up substantial equity. In fact, according to CoreLogic, the average U.S. homeowner now possesses approximately $290,000 in equity. The real estate market has witnessed significant growth recently, with some cities experiencing up to a 60% increase in home values. However, tapping into this equity isn't as straightforward as making a withdrawal from your bank.
As illustrated in the following pie chart, a staggering 68.7% of homeowners have successfully paid off their mortgages, leaving them with at least 50% equity in their homes. Some even own their properties outright. So, how can you leverage this equity to your advantage?
Becoming an All-Cash Buyer: In the world of real estate, cash reigns supreme. Being an all-cash buyer enables you to secure better deals and simplifies the purchasing process for sellers. If you've accumulated substantial equity, you can sell your current property and use the proceeds to purchase a new one with cash or a smaller mortgage, reducing your monthly payments. Later, you can refinance on more favorable terms.
Making a Larger Down Payment: Your home equity can be employed to make a more substantial down payment on your next home purchase. This not only reduces your principal loan amount but also your loan-to-value ratio, potentially securing a better interest rate from your lender. A larger down payment makes your monthly mortgage payments more manageable, especially if you're considering upsizing or downsizing. Future refinancing can further enhance the advantages of this loan program.
Avoiding Capital Gains Tax When Selling: If you decide to sell your home, there's a possibility of avoiding capital gains tax. As a single person, you won't be subject to taxes on up to $250,000 in net gains. For married couples, the exemption extends to $500,000. This could save you 15-20% of your gains, allowing you to retain more of your earnings.
It's imperative to take action now and utilize your equity wisely while the market remains favorable. Equity is a valuable resource that can empower you to become a more formidable buyer, whether you're considering upsizing, downsizing, or making real estate investments. Once the market shifts, this opportunity may diminish.
Now, let's shift our focus to the current real estate market in Parkland, Florida. We have fewer than 100 single-family homes available for sale, excluding 55+ communities and condos. Out of these 97 homes, 37 have undergone price reductions, with an average time on the market of 68 days. In contrast, our listings are going under contract in just 22 days, showcasing our exceptional performance in this market.
The median sales price in Parkland remains steady at $1,175,000, with year-over-year price increases of approximately 4%. In the past week alone, we've witnessed 10 new single-family home listings, 12 price reductions, 11 homes going under contract, and 10 homes being sold. Additionally, there are 38 single-family homes available for rent, with an average of 44 days on the market.
The rental market is becoming increasingly competitive, with median rental prices rising from $5,750 in 2022 to $5,975 in 2023, reflecting a 4% increase.
Mortgage interest rates have surged to 23-year highs, making it crucial to utilize your equity judiciously. The 30-year rate currently stands at just under 7.4%, the 15-year rate is 6.71%, and the 30-year jumbo rate is 7.39%. We collaborate with lenders who can help you secure lower rates either on a permanent or temporary basis through buy-down options, paving the way for future refinancing opportunities.
In this evolving market, creativity and well-informed decisions are essential. If you have any inquiries about your real estate choices or financial strategies, we encourage you to consult with your real estate expert, financial advisor, and accountant. These decisions have the potential to save you tens or even hundreds of thousands of dollars.
We're thrilled to announce our upcoming Elevate Parkland event, scheduled for October 19th, from 5:30 to 8:30. We've already surpassed a hundred registered attendees, and we're excited to feature guest speakers such as Rich Walker, Parkland's mayor, and Michael Udine, Broward County Commissioner. For more details and to register, please visit elevateparkland.com. We aim to provide valuable insights and foster meaningful discussions about the future of our city.
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The opinions expressed herein are solely those of Michael Citron and/or Parrot Realty, LLC, and should not be misconstrued as advice. Please consult your professional advisor prior to taking action on any decisions relating to the matters discussed in these videos. This communication is not intended to cause or induce a breach of an existing agency agreement. This is not financial advice.