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    The #1 Misconception in the Homebuying Process

    The #1 Misconception in the Homebuying Process | MyKCM

    After over a year of moderating home prices, it appears home value appreciation is about to reaccelerate. Skylar Olsen, Director of Economic Research at Zillow, explained in a recent article:

     “A year ago, a combination of a government shutdown, stock market slump and mortgage rate spike caused a long-anticipated inventory rise. That supposed boom turned out to be a short-lived mirage as buyers came back into the market and more than erased the inventory gains. As a natural reaction, the recent slowdown in home values looks like it’s set to reverse back.”

    CoreLogic, in their January 2020 Market Pulse Report, agrees with Olsen, projecting home value appreciation in all fifty states this year. Here’s the breakdown:

    • 21 states appreciating 5% or more
    • 26 states appreciating between 3-5%
    • Only 3 states appreciating less than 3%

    The Misconception

    Many believe when real estate values are increasing, owning a home becomes less affordable. That misconception is not necessarily true.

    In most cases, homes are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by almost a full percentage point since this time last year.

    Another major piece of the equation is a buyer’s income. The median family income has risen by 5% over the last year, contributing to the affordability factor.

    Black Knight, in their latest Mortgage Monitor, addressed this exact issue:

     “Despite the average home price increasing by nearly $13,000 from just over a year ago, the monthly mortgage payment required to buy that same home has actually dropped by 10% over that same span due to falling interest rates…

    Put another way, prospective homebuyers can now purchase a $48K more expensive home than a year ago while still paying the same in principal and interest, a 16% increase in buying power.”

    Bottom Line

    If you’re thinking about purchasing a home, realize that homes are still affordable even though prices are increasing. As the Black Knight report concluded:

    “Even with home price growth accelerating, today’s low-interest-rate environment has made home affordability the best it’s been since early 2018.”

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    Jeff Duneske

    With over 20 years of real estate experience, a career volume of over $250 million, over 1,000 properties sold, Jeff Duneske, broker/ owner of Duneske Real Estate Advisors at Keller Williams Advantage, has a lot to be proud of. However, his greatest source of pride is his honor: Jeff has built his business — and thrived in the industry — by instilling his clients’ trust.“ I have always said that we meet our clients at the crossroads of life and change — that we can make a difference, earn their trust and help our clients during this change.” “Knowing that I have earned the trust of over 1,000 clients and the privilege of guiding them through one of life’s largest financial transactions to achieve the American Dream is by far the greatest reward of my business.” Jeff was born and raised in Novi and earned the distinguished rank of Eagle Scout when he was 15 years old. In 1996, Jeff graduated from Novi High School and The Oakland Fire Academy and was intent on becoming a full-time firefighter. After serving as an auxiliary firefighter and EMT in Novi and Walled Lake for several years and not landing a full-time position on the force, Jeff decided to shift gears and find another professional path where he could help people and began his real estate career in 2000. Having been the #1 agent or team at various brokerages over his career, as well as the #1 team at Keller Williams Advantage and the #4 team in the Michigan-Ohio region of Keller Williams International in 2019, Jeff has certainly demonstrated his drive to reach for the sky and his commitment to his clients. “We never rest on our laurels, and we’re always improving our current systems — and implementing new systems — to boost efficiency and assure stellar service.” Jeff, who has served on the Professional Standards Committee for the past nine years, embraces a strong mindset to persistently achieve his goals without compromising his morals, standards, or ethics for anyone or any transaction. “You must uphold your standards because if you don’t uphold them, you have no standards at all.” “I run my life and my business by The Golden Rule: Treat others the way you would like to be treated.” Jeff’s noble purpose — conducting his business with the highest morals, ethics, and standards — has led him to a successful real estate career. More importantly, his ethical and moral standards have enriched his life and the lives of others in immeasurable ways … and because Jeff does not waver, he will continue to lead with purpose, honor, and great promise.

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