REal Insight
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Novum Realty Agent
July 27, 2022

Inflation, Rate Hikes, and Housing

Stories about inflation have, again, dominated news headlines. Conversations circling around mortgage rates, gas prices, and supply of consumer goods have all become the norm. In early June the FED hiked interest rates by 75 basis points in trajectory of a correction. Both an economically complicated and nuanced situation, what does inflation mean for the housing market as a whole?

Inflation is the lessening of a consumer's purchasing power due to rising prices and the reduced value of the dollar. Due to fluctuations in the global economy and political environment, business owners are seeing rising supply chain costs and we, as consumers, are then now experiencing those rising prices. Although this may seem inherently negative, there are positives to inflation - in fact, a healthy economy will always have a little inflation present.

Rising inflation can be seen affecting a few different areas of the housing market. Rising rent prices, higher mortgage rates, and higher home prices are fairly common in high inflationary periods. For example, recently, rent has been seen skyrocketing and lessening the purchasing power of tenants significantly. With this being the case, it may provide an extra incentive for current renters to invest into their next home as a solution for renting.

Rising mortgage rates and home prices are also common with higher inflation. That said, currently mortgage rates are at just above 5%, which is still on the lower end of historical rates (the highest being in the 1980's around 18%). Central bank lifted its key lending rate range to 2.25% to 2.5% - a benchmark policy makers consider neutral which neither stimulates nor restricts growth. Although, be wary, rates are projected to grow in the coming years. The FED must rein in consumer-price increases of 9.1% without tipping the U.S. into a recession. 

Many experts also say real estate can act as a hedge or a boundary from the negative effects of inflation. Chief economist at Zonda, Ali Wolf, speaks to the fact that housing is typically something that can appreciate in value and can be a solid foundational place to put your money in a time you do not want it to lose value. James Royal, a senior wealth management reporter also notes that with a fixed mortgage you can count on paying the same amount each month, which can allow you greater purchasing power. With that as well. Natalie Campisi, an advisor at Forbes, states that you also are protected from high rental prices, that can be expected to continue to rise with inflation.


Is it the time to invest in a home? What's the most financially efficient mortgage?

Although rising inflation can be scary, each market looks different under this wide scope. Currently, the housing market for buyers and sellers is a still a viable and smart option to invest in. It can be helpful to continue to keep up to date with news and federal reserve projections along with other major mortgage companies such as Freddie Mac and Fannie Mae. If you feel ready to begin your home buying experience in this market, we suggest getting pre-approved and reach out to a real estate advisor.


Sources: Freddie Mac, Realty Biz News, Wall Street Journal, Forbes, Investopedia, NPR, Mynd Management, Fox, Mint Intuit, Rocket Mortgage, Bob VIla, Keeping Current Matters, The Economy Forecast Agency, Bankrate: Forbes



Posted in Market Updates
June 10, 2022

The Possible Pivot from Renter to Homeowner

Are you a current renter entertaining the idea of home ownership? Or wondering if now is the time to purchase a home. You are not alone, the topic of timing is one we have been revisiting often. Investing in a home for the first time can be a daunting undertaking and it helps when given a push in the right direction. Informed decisions have the potential of being the best decisions. Taking an assessment of your home ownership desires and personal affordability are key factors that lead you toward the answer you are searching for.

In addition, an overview of current renter and buyer data may offer the additional insight needed to fully tune into your goals and sync them a timeline. Whether you start your home buying process now or later, don't worry! There are plenty of ways to reach those goals in due time.

Nationally, 49% of renters are under the age of 30. Over 46% of renters spend 30% of their annual income on rent! Minnesota median household of 3 has an annual income of $73,382 and pays $1680 in rent for a two-bedroom apartment. This same income could purchase a median priced home with a 30-year term for a monthly mortgage of $1644 a month. Not only is the monthly mortgage less than the median rent, there's opportunity to reduce your mortgage payments with financial planning and rate strategies.

statsA common myth, without question, is that home buying is significantly more expensive than renting. However, buying a home can present a variety of opportunities while also not being as expensive as one may think. In fact, homeowners typically have 44x the net worth than that of a renter, as a result of the significant financial opportunities gained from homeownership.

So, where does this lead us? Is it possible that your rental property is causing more financial strain than that of a home owner? As seen above, higher ratios are much more common among renters, actually, 24% of renters spend over 50% of their income on rent. Rent prices and cost of living are constantly changing as well, but not nearly at the same pace. Between 1960 and 2016 the median price of rent rose by 61%, where the annual income for renters only increased by 5%. Statistics like these are not as few and far between as you may think. Do you relate to any of these statistics?

While these statistics may only provide a high-level view of financial health of renters and homeowners, it does offer a benchmark in terms of affordability. You may be among the thousands that are unaware of just how attainable the opportunities in real estate can be. If your desires are leaning toward homeownership, with the help of a lender, it's time to establish financial strategies for a timeline that works best for you.

We here at Novum are prepared to meet you wherever you are at in your home buying journey. Reach out to us to set up an initial consultation to evaluate the next steps in your experience at


Sources:, iProperty, National Association of Realtors, Minnesota Realtors, FED Survey of Consumer finances,,,,, Nerd Wallet


Posted in Affordable Housing
June 8, 2021

Post-Pandemic Credit Health

Your health, protecting your family, and providing the basic household needs were priorities during the pandemic. As officials lift mandates and people shift back to their lifestyle, we are now reminded to stay diligent in maintaining financial health. The summer months have started with strong buyer demand with active bidders leaving many questioning their financial ability to buy in a competitive market. With so many households having dipped into their savings, rebuilding their financial security and stability is an added milestone before a new home search begins


Credit Reports 

Reviewing your credit report is a great place to start when it comes to unraveling the financial setbacks post-pandemic. Gusto surveyed 540 small business workers and found that employees took on an average of $3,351 in new debts. Changes in debt-to-credit ratio, late payments, and hard inquiries for new loans result in lower credit scores. Accessing your credit scores will give you a better understanding of your buying power and what areas need improving. Take advantage of getting a free credit report from each of the three credit bureaus: Equifax, Experian, and Transunion.

Fix Mistakes 

1 in 5 credit reports will have mistakes. Addressing errors and resolving any mistakes is the quickest way to improve your credit score. Contact your Lenders Still can’t pay all your bills at this time? Contact your lenders and ask about hardship options. Many lenders still have policies in place to help customers who need extra time to make payments due to hardships endured from the pandemic. Lenders may be able to temporarily lower your interest rate or payment amount, or pause your payments for a period of time. Lenders may also be able to place your loans in deferment or forbearance. You don’t need to make payments when a loan is in deferment or forbearance, and the lender will not report late payments to the credit bureaus. Additionally, an account being reported as in forbearance or deferment will help minimize the impact on your credit score if the account is in good standing with no previous reported delinquencies.

Do Not Close Those Accounts! 

Tempting as it may be, don’t close credit cards you don't use. The length of time you have had credit is a factor in your score; experts recommend keeping a card and using it occasionally and pay it off on time in full each month. be prepared for the temporary hit on your score if you find yourself having to cancel any accounts. 

Little Score Wins 

There are tools such as the Perch Credit app, Experian Boost, and programs like Chime that increase your credit score by with every day recurring expenses, such as your electric bill, to show the bureaus your ability to habitually pay on time. These little wins score big points in the long run.

Be Proactive 

With a little strategy, you can rebuild your financial health, improve your score, and increase your sense of financial security. Before you know it, you’ll be on a search for that new perfect home. As officials lift mandates and people shift back to their lifestyle, we are now reminded to stay diligent in maintaining financial health. The summer months have started with strong buyer demand with active bidders leaving many questioning their financial ability to buy in a competitive market. With so many households having dipped into their savings, rebuilding their financial security and stability is an added milestone before a new home search begins. With a few of our pointers, you'll be back on track.