Trying to decide between renting or buying a home? One key factor that could help you choose is just how much homeownership can grow your net worth.

Every three years, the Federal Reserve Board shares a report called the Survey of Consumer Finances (SCF). It shows how much wealth homeowners and renters have – and the difference is significant.

On average, a homeowner’s net worth is nearly 40 times higher than a renter’s. Check out the graph below to see the difference for yourself:

Why Homeowners Wealth Is So High
In the previous version of that report, the average homeowner’s net worth was about $255,000, while the average renter’s was just $6,300. That’s still a big gap. But in the most recent update, the spread got even bigger as homeowner wealth grew even more (see graph below):

As the SCF report says:

“. . . the 2019-2022 growth in median net worth was the largest three-year increase over the history of the modern SCF, more than double the next-largest one on record.”

One big reason why homeowner wealth shot up is home equity.

Equity is the difference between your home’s value and what you owe on your mortgage. You gain equity by paying down your mortgage and when your home’s value goes up.

Over the past few years, home prices have gone up a lot. That’s because there weren’t enough available homes for all the people who wanted one. This supply-demand imbalance pushed home prices up – and that translated into faster equity gains and even more net worth for homeowners.

If you’re still torn between whether to rent or buy, here’s what you should know. While inventory has grown this year, in most places, there’s still not enough to go around. That’s why expert forecasts show prices are expected to go up again next year nationally. It’ll just be at a more moderate pace.

While that’s not the sky-high appreciation we saw during the pandemic, it still means potential equity gains for you if you buy now. As Ksenia Potapov, Economist at First American, explains:

“Despite the risk of volatility in the housing market, homeownership remains an important driver of wealth accumulation and the largest source of total wealth among most households.”

But prices and inventory are going to vary by area. So, lean on a local real estate agent. They’ll be able to give you the local trends and speak to the other financial and lifestyle benefits that come with owning a home. That crucial information will help you decide the best move for you right now. As Bankrate explains:

“Deciding between renting and buying a home isn’t just about cost — the decision also involves long-term financial strategies and personal circumstances. If you’re on the fence about which is right for you, it may be helpful to speak with a local real estate agent who knows your market well. An experienced agent can help you weigh your options and make a more informed decision.”

Bottom Line
If you’re not sure if you should rent or buy, keep in mind that if you can make the numbers work, owning a home can really grow your wealth over time.

And if homeownership feels out of reach, connect with a local real estate agent and lender. They can help you explore programs that may make buying possible.

Alabama Law Protecting Homeowners from Illegal Occupants Goes Into Effect

June 3, 2024

Earlier this year, Alabama lawmakers passed legislation aimed at protecting property owners from squatters. It goes into effect on Saturday, June 1.

The new law imposes severe penalties for individuals who illegally enter a residence they do not own and creates a new offense for causing $1,000 or more in damage to a property.

These crimes are classified as Class C felonies, punishable by one to ten years of imprisonment in Alabama. Additionally, producing a falsified document purporting to be a binding lease, deed, or other instrument of ownership or occupancy is classified as a Class A misdemeanor, carrying up to one year in jail and fines of up to $6,000.

The new law establishes a process, administered by local law enforcement, to quickly remove individuals who are illegally squatting a property owner’s dwelling without authorization.

Effective June 1, the law allows homeowners to file an affidavit with their local sheriff’s office to have an unauthorized occupant removed. The squatter will have 24 hours’ notice to vacate the property or face criminal charges, including potential burglary charges.

“It has been said that a person’s home is their castle, yet after a national rise in illegal occupations of homeowner’s private property, it is apparent that more must be done to halt criminals from commandeering people’s homes,” said Alabama Governor Kay Ivey when she signed the bill into law.

“The best dwelling for an illegal squatter is a jail cell, and we in state government should never rest easy until all Alabama homeowners’ rights are fully protected,” Ivey said.

The initial legislation was led by State Rep. Craig Lipscomb (R-Gadsden), who said the goal is to establish a swift process for local law enforcement to remove unauthorized occupants from properties in Alabama, which remains generally less of an issue than in other states.

New home sales in Alabama increased 13.0% year-over-year from 710 to 802 closed transactions in April. Following seasonal trends, sales decreased 8.2% from March. New home sales are up 15.2% year-to-date.

Inventory: New home listings (3,528) increased 4.8% from March and 17.6% from one year ago. The number of new home listings in April increased significantly from recent years, rising 56.4% above the 5-year average.

At the current sales pace, all the active inventory on the market would sell in 4.4 months, up from 3.9 in March and 4.2 in April 2023. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply.

Pricing: The median sales price for new construction in April was $342,839, an increase of 10.6% from March and 6.6% from one year ago.

The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.

New homes sold in April averaged 63 days on the market (DOM), 7 days faster than one year ago.

National Overview: According to the U.S. Census Bureau, new home sales nationwide were at a seasonally adjusted annual rate of 634,000 in April. This represents a 4.7% decrease from the revised March rate of 665,000 and is 7.7% below the April 2023 estimate of 687,000.

The median sales price for new homes ($433,500) decreased 1.4% from March but increased 3.9% from April 2023.

The supply of new homes was estimated at 474,000 listings (seasonally adjusted) in April, an increase of 3.5% from March and 13.1% from one year ago. Months of supply was 8.5 in April 2024, up from 7.0 one year ago.

The Alabama Center for Real Estate at The University of Alabama

The Alabama Real Estate Journal

Any homeowner will know that a home is only as strong as its foundation. The same is true about your landscaping. While you may be most excited to fill your yard with beautiful flowers and showy ornamentals—those blooms are often more short-lived, and they’ll need supporting characters to really shine. Foundation plants—like trees, shrubs, grasses, and ground covers—create the basis for your landscape design and help to frame your home and integrate it in its surrounding environment. Keep reading for foundation plants that will help your yard look lush and bountiful—and, in turn, increase your home’s curb appeal.

1. Boxwood
Boxwoods make for an ideal foundation shrub. They’re hardy, classic, and you can shape them to your liking. Boxwoods make for a great border along the exterior of your home, and they create a solid, dense backdrop for other plants and flowers.

2. Azalea
Azaleas are a very popular flowering shrub—and for good reason. They’re known for their bright and full blooms, which come in a variety of colors, and they are sure to assist with your curb appeal when planted in your front yard. Azaleas start blooming in the spring and some varieties bloom again in the summer and fall.

3. Spirea
If you’re looking for an easy-to-grow foundation plant, spirea is a great pick. They’re fast growers, they have little to no issues with pests or diseases, and the flowers have a long bloom time.

4. Salvia
If you aren’t familiar with salvia, you may mistake it for lavender at first glance—and you wouldn’t be far off, as both are members of the mint family. Salvia will bring a bright pop of color to your landscape with their long-lasting blooms, and they attract hummingbirds, butterflies, and bees, making them a great addition to pollinator-friendly gardens.

5. Fescue
Fescue is a shade-tolerant, low-growing grass that can create a lush greenscape beneath your taller shrubs and flowers. The grass has a clump-forming habit, growing in feathery balls of foliage that are almost reminiscent of something out of a Dr. Seuss book.

6. Catmint
Catmint, another member of the mint family, is also a pollinator-friendly plant that is sure to turn heads with its vibrant and full flowers. Since the plant is drought-tolerant, it’s a great choice for beginner gardeners aiming to create low-maintenance landscaping.

7. Hosta
Hostas are a popular foundation plant, thanks to their shade-tolerance and their lush appearance. You can choose from hundreds of hosta varieties to find the color, texture, pattern, and size that best suits your landscape.

8. Panicle Hydrangea
Hydrangeas have long been a favorite for creating striking landscaping and increasing curb appeal, and this particular variety is an especially good choice for foundation plantings. Panicle hydrangeas are one of the easiest types of hydrangeas to grow and they’ll reliably provide big, bold blooms each year.

1. Experience

An Agent’s experience and understanding of the sales process have value. The more experience they have, the more ability to help clients achieve their goal of buying or selling a home. The agent will help you avoid potential missteps in the process and guide you to a successful closing. We live in a society were everyone is looking for the “easy button” but buying and selling a home is not easy. Trade experience is invaluable helping you move through the detailed process.

2. Key Local Insight

Most of the news reported on real estate is done on a national level. Although trends at the national level are important, it is local details and insights that most affect buyers and sellers. Details like what homes actually sell for vs the asking price, how long homes are on the market, average and median sale prices and what other homes in the area look like. It’s important to measure your competition and only an agent has that detailed insight. For buyers the same holds true, the agent can easily see potential buying opportunities as they come available and far quicker than a buyer can on their own.

3, Network of Local Resources

A truly professional agent can recommend resources from babysitters to bicycle technicians. They know home inspectors, plumbers, electricians, landscapers and pool companies among other’s. Buyers and Sellers can take advantage of the Agents knowledge and leverage that into fair priced work with trusted contractors.

4. Valuation Expertise

If sellers trust Zillow for the valuation of their home before listing it for sale, odds are they are going to get it wrong. An Agent has the ability to put together a complete valuation analysis and to present it in a way that sellers can easily understand. It will help them sell their home for the highest price possible in the least amount of time.

When a buyer is interested in a home they should receive a similar market analysis showing the fair market value. Buyers can see what their offering is not out of line or above what the market reflects. The buyer is then equipped with the confidence to make an offer based on the knowledge of the market, not some guess or what the sellers asking. It makes decisions on offers or counter offers based on facts and with less emotion.

5. Negotiation Skills

An experienced Agent should be an astute negotiator who negotiates on behalf of the client at a high level. The Agent’s value will outweigh the commission and in many cases make the client money. When choosing an agent be sure to ask a lot of questions about negotiating skills and ask for examples of how they will negotiate on your behalf. A good Agent will be able to show you they have the skills needed by giving examples of how they work in the negotiating process.

6. Marketing Skills

This is mostly for sellers but effective marketing provides the exposure sellers need to garner the number of showings necessary to maximize the sales price of their home. In today’s real estate market Agents should be utilizing every social media outlet as well as every real estate focused sites like Realtor.com, Zillow.com, Redfin.com, LiveinAlabama.com (The Local MLS Public Site) and every individual agency public facing sites. Agents invest in top-of-the-line photography and videography services or have the skills and equipment themselves to produce media the market demands. Agents know how to tell a story through media and a skilled agents have proven success in marketing through media. Sellers will have the confidence in knowing their home is being exposed in the maximum ways to return the highest net sales price through excellent media.

7. Legal Navigation through the process

We live in an ever-increasingly litigious society and this is an area where that an Agents experience is paramount. An Agent has the ability to help navigate clients through the buying or selling process, avoiding potential pitfalls or liability, that is needed now more than ever.

The Agent understands how to properly word contingencies that protect their clients. The Agent provides updates on upcoming contingency deadline dates. The Agent is the professional who understands the contract completely and by doing so will not only be protecting the client but making sure you also understand everything you need to know in simple, easy terminology.

There’s no denying mortgage rates are having a big impact on today’s housing market. And that may leave you with some questions about whether it still makes sense to sell your house and make a move.

Here are three of the top questions you may be asking – and the data that helps answer them.

1. Should I Wait to Sell?
If you’re thinking about waiting to sell until after mortgage rates come down, here’s what you need to know. So are a ton of other people.

And while mortgage rates are still forecasted to come down later this year, if you wait for that to happen, you may be dealing with a lot more competition as other buyers and sellers jump back in too. As Bright MLS says:

“Even a modest drop in rates will bring both more buyers and more sellers into the market.”

2. Are Buyers Still Out There?
But that doesn’t mean no one is moving right now. While some people are holding off, there are still plenty of buyers active today. And here’s the data to prove it.

The ShowingTime Showing Index is a measure of how frequently buyers are touring homes. The graph below uses that index to show buyer activity for March (the latest data available) over the past seven years

3. Can I Afford to Buy My Next Home?
And if you’re worried about how you’ll afford your next move with today’s rates and prices, consider this: you probably have more equity in your current home than you realize.

Homeowners have gained record amounts of equity over the past few years. And that equity can make a big difference when you buy your next home. You may even have enough to be an all-cash buyer and avoid taking out a mortgage altogether. As Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:

“ . . . those who have earned housing equity through home price appreciation are the current winners in today’s housing market. One-third of recent home buyers did not finance their home purchase last month—the highest share in a decade. For these buyers, interest rates may be less influential in their purchase decisions.”

Bottom Line
If you’ve had these three questions on your mind and they’ve been holding you back from selling, hopefully, it helps to have this information now. A recent survey from Realtor.com found more than 85% of potential sellers have been considering selling for over a year. That means there are a number of sellers like you who are on the fence.

But that same survey also talked to sellers who recently decided to take the plunge and list. And 79% of those recent sellers wish they’d sold sooner.

If you want to talk more about any of these questions or need more information, contact a real estate agent.

Here’s the Article

New survey on buyer trends…

This is for sellers and not too many surprises except one, most buyers are no longer willing to even look at homes in need of renovations. Avocado kitchen or dated bathroom? Most buyers are not even coming in the door. In need of other renovations or yard upkeep? Nope, most are also not coming in the door. Thats the only big change from previous surveys where buyers would generally look at homes even of they needed work, not so much so based on this survey. The rest are generally common sense but show the need for home preparation prior to putting that sign in the yard.

– 63% avoid even “viewing” a home that needs repairs or renovations.

– Mold or dampness anywhere in the house and most buyers will walk away.

– Any odors in the house and again, buyers are leaving.

– Problematic location such as being on a busy street, close to unsightly homes or vacant lots will chase away buyers.

– Outdated design choices, another sale killer.

– Evidence of pests. This goes without saying right?

This survey is further confirmation you need expert guidance in preparing your home for sale.

Take a look here:

Red flags for sellers

Monroeville Main Street has been chosen for a 2024 Great American Main Street Award.

The national honor recognized Main Street programs that have achieved success in downtown revitalization that preserves a historic commercial district. Only 110 programs across the country have received the award in its 30-year existence.

Announcing the award, Main Street America said, “Monroeville Main Street is being recognized for facilitating an incredible renaissance rooted in economic vitality, thoughtful design and the literary arts.”

“I am so incredibly inspired by Monroeville Main Street’s extraordinary success, especially in a relatively short amount of time,” said Erin Barnes, president and CEO at Main Street America. “They are truly writing the next chapter for Monroeville through a passionate dedication to collective action and preservation with a purpose.”

The article can be found here:

Alabama Town Wins National Award

If you’ve been dreaming of a kitchen remodel for years or a backyard makeover for several summers, it may be time to finally create a home you love and will enjoy living in. An added bonus: If you select the right home projects, they will also increase your home’s value once you go to sell. We call this a win-win.

“Any changes you make on your house now should increase your home value later,” says Kermit Baker, project director for the Remodeling Futures program at Harvard University. But which projects will increase your home value? We know home remodeling costs can add up.

Take a look at this list, starting with the upgrades most likely to recoup your investment, and get ready to appreciate your space more than ever. One note: No home upgrade is going to completely pay for itself. (If it does, you’re one lucky home seller.) With that in mind, make sure you’re picking home improvement projects that will increase your enjoyment of your space—see the opportunity to increase the value of your home as just a bonus.

Take a look at this article from the Alabama Association of Realtors:

Great Investments on these Improvements!