Content sponsor Opendoor offers tips on how you can guide your clients toward timeless design elements that won’t go out of style.

A home’s design, including floor plans, tiling, cabinetry and countertops, can make or break its appeal to buyers. Just like fashion, home decor trends change over time, so what’s “in” this year may be “out” the next. Knowing how to guide your clients on these trends can help set you apart from competitors. You can learn from industry surveys; Opendoor(link is external), for example, recently surveyed homeowners to learn about their design priorities—and cost-effective approaches are top priority. Owners are moving toward “universal decor” and ultra-functional spaces, according to Opendoor’s survey, which includes a roundup of tried-and-true design must-haves. Below are the survey’s top findings, along with tips to enhance a space without breaking the bank.

Impact of Inflation on Design Budgets

Inflation is prompting fewer owners to update their home’s look, with only 25% saying they swap out their decor at least once a year. That’s down from 32% in 2021, which suggests that “universal decor”—pieces that work year-round—may gain favor. When walking a client through a home, make sure to point out specific features or design elements that will have longevity (think quartz countertops in the kitchen or hardwood flooring elsewhere in the home).

Homeowners who do seek a makeover are choosing cost-effective options, such as fresh paint (66%), furniture rearrangement (49%), new throw pillows (43%), house plants (41%) and updating wall art (39%). DIY projects can be easy on a budget, too, such as staining a vintage piece of furniture, painting cabinets, new peel and stick tiles, repainting a room or adding modern wallpaper.

The New Powerhouse Room

The living room has overtaken the kitchen as the central space of the home. Twenty-four percent of homeowners say the living room is where they feel most energized, while 54% say it’s also where they feel most relaxed. Fifty-five percent say they feel closest to others in the living room, with the kitchen coming in second (21%).

Ultra-functional rooms, which maximize indoor opportunities for connection, rest and relaxation, solitude and productivity, are likely to see higher demand. Forty-one percent of homeowners say they want a fully open layout for the kitchen, living room and dining room. Advising clients to use living room furniture to delineate a separate space—the couch in the middle of the room, backed by a console table—will help foster a feeling of openness, even if the layout doesn’t allow for it.

Using Design to Impress a Potential Buyer

A significant number of buyers will also need to sell, which means you can use design elements to give potential buyers ideas for how to sell their current home. Survey respondents shared the role design plays in that process:

Another easy and cost–effective upgrade that clients can easily do themselves is switching out light fixtures. Replace outdated vanity lights, pendant lights or builder-grade flush mounts with reasonably priced, design-forward options, like fixtures with LED bulbs or energy-saving dimmers. Lighting can completely change the look and feel of a space.

If your client’s home needs more than touchups, focus on the upgrades buyers say they want most, including new kitchen appliances (23%), a kitchen island (21%) and quartz countertops (15%). Opt for durable, high-quality materials that can withstand stains and spills. Quartz counters and luxury vinyl plank flooring in colors and patterns that mimic real stone and wood offer a timeless design.

2023 Design Trends 

Homeowners revealed what’s resonating with them in the Opendoor survey:

Architecture

In: Ranch-style (35%) and Craftsman (23%) styles impress the most.

Out: Italianate (24%) and Modern (16%) styles impress the least.

Design

In: Millennials incorporated “cottagecore” (21%) and maximalism (25%) into their homes in 2022.

Out: Homeowners say that Bohemian (30%) and modern (17%) are their least favorite styles.

Front Door Colors

In: Neutral colors are preferred by homeowners (44%).

Out: Bright and bold shades are least preferred (48%).

Interior Colors

In: Mid-tone gray and beige (38%) are most preferred.

Out: Deep shades (13%) are least preferred.

Outdoor Features

In: Outdoor dining tables and chairs (22%), a fire pit (20%) and an outdoor structure (23%) are most appealing.

Out: Fountains and statues (27%) and outdoor rugs (21%) are least enticing.

Renovation Priorities

In: Both kitchen (24%) and bathroom (26%) are popular.

Out: Only 19% plan to remodel their living room in 2023.

3 Tips for Captivating Indoor Design Features

1. Recessed LED lights: Pairing overhead lights with task and accent lighting, like floor lamps, brings in extra layers of lighting to make a room feel more cozy.

2. Luxury vinyl plank: LVP throughout the home can bring in the warmth and coveted look of hardwood floors with the added safety of its durability, particularly in wet areas.

3. Subway tile: For creative applications with subway tile, explore different colors, sizes and textures, ranging from brick-like to handmade zellige subway tiles. 

Eco-minded home buyers are expected to take an indoor/outdoor approach. Inside, they are likely to refinish existing floors, cabinets and fixtures (50%); invest in energy-saving light dimmers (47%); or refinish/repaint an old piece of furniture (38%). Outdoors, they may want solar-powered lights (46%), native landscaping (43%), drought-resistant landscaping (40%), solar panels (26%), turf lawn (22%) and drip irrigation (21%).

©National Association of REALTORS®
Reprinted with permission

As inflation decelerates, the potential for lower mortgage rates is becoming a greater possibility.

Mortgage rates decreased for the second consecutive week but still remain above 6.5%, a far cry from a year ago, muting any celebration from borrowers. Freddie Mac reports the 30-year fixed-rate mortgage averaged 6.69% this week.

The weekly drop comes on the heels of better economic news: The Federal Reserve on Wednesday voted to pause hikes to its benchmark interest rate in June—here’s how that could affect mortgage rates—and inflation dropped to 4%, the lowest level in two years.

“As inflation continues to decelerate, economic growth is slowing and the tightening cycle of monetary policy is reaching its apex, which means mortgage rates are expected to decrease later this year and into next,” says Sam Khater, Freddie Mac’s chief economist.

Indeed, the latest economic data indicates that inflation may ease even faster in the coming months, particularly as rent growth continues to cool. “With this decelerating trend in rent prices to persist in the upcoming months, inflation will slow down further, pulling down mortgage rates,” says Nadia Evangelou, senior economist and director of real estate research at the National Association of REALTORS®. “At the current mortgage rate, renters who pay $1,655 monthly for rent can spend the same amount on a monthly mortgage payment for a home with a value of $321,000.”

Freddie Mac reports the following national averages with mortgage rates for the week ending June 15:

• 30-year fixed-rate mortgages: averaged 6.69%, dropping from last week’s 6.71% average. A year ago, 30-year rates averaged 5.78%.
• 15-year fixed-rate mortgages: averaged 6.10%, rising from last week’s 6.07% average. A year ago, 15-year rates averaged 4.81%.

©National Association of REALTORS®
Reprinted with permission

While NAR fights legal challenges to procompetitive, proconsumer local broker marketplaces, you can educate your community.

In the litigation landscape that the National Association of REALTORS® is facing today, much of what NAR is fighting is misinformation, mischaracterization and lack of understanding or education. There are class-action attorneys and other challengers who have a blatant disregard or lack of appreciation for the value REALTORS® bring consumers and how local MLS broker marketplaces serve the best interests of American home buyers and sellers.

Litigation is a long, complex process that will not be resolved for years, and NAR takes each case and legal development seriously. NAR leadership is taking proactive measures to ensure consumers continue to benefit from the access and opportunities they have today and that real estate professionals continue to be equipped and positioned to serve the best interests of those consumers. On the front, NAR has legal teams actively engaged to defend pro-consumer and pro-competitive practices in local broker marketplaces.

We want you to understand major developments, what we’re doing to address them and how you can help.

Several Cases Remain Unresolved

Let’s start with the Department of Justice.

In a clear victory for NAR in January, a district court ruled that the DOJ must adhere to its previous agreement with NAR to more explicitly state the spirit and intent of NAR’s Code of Ethics and MLS guidelines in certain key areas. In fact, NAR has already adopted clarifications to its guidance for local MLS broker marketplaces to strengthen transparency for consumers.

Though the DOJ recently appealed the decision, NAR remains confident that it will ultimately prevail, saying the association has upheld its end of the agreement and simply expects the DOJ to do the same.

Next, let’s discuss seller class-action lawsuits.

Four years ago, class-action attorneys brought lawsuits against NAR and four corporate defendants in Missouri and Illinois, alleging home sellers have been damaged because their listing broker compensates the buyer’s representative. The lawsuits also suggest that real estate professionals are being paid too much as a result.

While the Illinois case is in earlier stages, the Missouri case is set to go to trial this fall. NAR’s attorneys will make it imminently clear that the association has the law and facts on its side.

Lastly, let’s look at challenges to the Clear Cooperation Policy.

Two lawsuits stem from private listing networks wanting REALTORS® to bypass local broker marketplaces and market properties to consumers only within these private networks. The plaintiffs’ original complaints were dismissed; a federal judge agreed with NAR that the Clear Cooperation Policy provides consumers with “access to more information regarding market conditions, enabling them to make better informed choices about the bundle of real estate brokerage services that will best serve their needs.” 

However, due to appeals, the cases are still ongoing. Regardless, NAR is prepared to present its position at trial, if needed, and prove that the rule promotes competition and ensures transparent, equitable access to real estate listings for the benefit of consumers.

Help NAR Educate the Public

NAR continues to anticipate and prepare for these various legal milestones via ongoing positive, proactive storytelling moments in the media and other places to spread the word about the pro-consumer and pro-competitive nature of local broker marketplaces and REALTORS®’ reputation as trusted, valued experts. NAR also continues to equip state and local associations with toolkits and other content to help them motivate members and educate consumers.

This is where you come in: NAR needs your help to educate consumers about how local MLS broker marketplaces work and promote equity, transparency and market-driven pricing options for consumers as well as the incredible value you provide. That’s why NAR has developed the website competition.realtor. This site is a place to send people who have questions, and it’s a resource for you to pull things you need to be ambassadors with clients and others in your community. The site hosts fact sheets, FAQs, articles, infographics and other information you can use that:

• Illustrate how REALTORS® are consumer champions.
• Describe how local MLS broker marketplaces create highly competitive markets that promote equity, greater access, more choices and greater pricing options when it comes to real estate services.
• Provide soundbite updates on NAR policy changes and legal matters.

In addition, NAR has created a simple consumer website at realestatecommissionfacts.com(link is external) to aid consumers’ understanding of broker services and how real estate professionals are compensated.

At the end of the day, we all know that REALTORS® are consumers’ advocates. We all know that REALTORS® lead as entrepreneurs, small business owners, experts and philanthropists to protect consumers, build generational wealth and contribute to local and national economies. And we also know local MLS broker marketplaces create the largest, most efficient and convenient markets that ensure equity, transparency and market-driven pricing for home buyers and sellers.​​​​​

It is imperative that right now, REALTORS® do all they can to communicate that reality every day in all the conversations they have and channels at their disposal. While NAR’s legal team is helping the association win in a court of law, the association asks members to play their part to help win in the court of public opinion.

©National Association of REALTORS®
Reprinted with permission

The third quarter may have marked the end of price surges as higher mortgage rates put a damper on projections for property appreciation. Read more from NAR’s latest report.

Home prices continued to climb in the third quarter of this year, but the upward trend may finally be coming to an end, according to the National Association of REALTORS®’ latest quarterly report. Higher mortgage rates are starting to weigh on home price growth, though practically every major metro saw home prices rise in the third quarter. Forty-six percent of the 185 markets that NAR tracks even registered double-digit increases.

The national median price for a single-family existing home was $398,000 in the third quarter, an 8.6% jump from a year earlier. That’s a slower pace than in the second quarter, when the median price was 14.2% higher year over year. More easing is expected over the next few months, says NAR Chief Economist Lawrence Yun. “Much lower buyer capacity has slowed home price growth, and the trend will continue until mortgage rates stop rising,” he says. “The median income needed to buy a typical home has risen to $88,300. That’s almost $40,000 more than it was prior to the start of the pandemic.”

Meanwhile, the monthly mortgage payment on a typical existing single-family home with a 20% down payment swelled to $1,840 in the third quarter, up 50% year over year. The 30-year fixed-rate mortgage is currently above 7%—double what it was a year ago—prompting house hunters to revisit what they can afford. The typical family now needs a qualifying income of at least $100,000 to afford a 10% down payment on a mortgage in 59 markets, up from 53 markets in the second quarter. Further, a family with a qualifying income of less than $50,000 can afford a home in just 17 of the markets NAR tracks, down from 23 in the previous quarter.

First-time home buyers are struggling with these dynamics. A typical starter home worth about $338,700 would have a monthly mortgage payment of $1,808 with a 10% down payment, an increase of nearly $600 compared to a year ago. First-time buyers typically spend nearly 38% of their income on mortgage payments; most financial experts consider households financially burdened when they spend more than 25% of their income on housing.

Where Prices Are Rising the Most

Some of the priciest markets in the country, like the San Jose and San Francisco areas in California—with a median home price of $1.7 million and $1.3 million, respectively—could see some cooling in the months ahead. “The more expensive markets on the West Coast will likely experience some price declines following this rapid price appreciation, which is the result of many years of limited homebuilding,” Yun says. “The Midwest, with relatively affordable home prices, will likely continue to see price gains as incomes and rents both rise.”

The South not only saw the highest share of sales of existing single-family homes in the third quarter but also the highest year-over-year appreciation in the country, NAR’s report shows. Prices jumped 11.9% in the region, followed by an 8.2% increase in the Northeast, 7.4% in the West and 6.6% in the Midwest.

The following 10 metros posted the largest year-over-year price increases in the country in the third quarter:

• North Port-Sarasota-Bradenton, Fla.: 23.8%
• Lakeland-Winter Haven, Fla.: 21.2%
• Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.: 21.1%
• Panama City, Fla.: 20.5%
• Deltona-Daytona Beach-Ormond Beach, Fla.: 19.6%
• Port St. Lucie, Fla.: 19.4%
• Greenville-Anderson-Mauldin, S.C.: 18.9%
• Kingsport-Bristol-Bristol, Tenn.-Va.: 18.8%
• Tampa-St. Petersburg-Clearwater, Fla.: 18.8%
• Ocala, Fla.: 18.8%

©National Association of REALTORS®
Reprinted with permission

October’s lower inflation rate is a welcome sign for a housing market that’s seen steady declines in 2022.

A recent report showing that the rate of inflation declined in October is good news for the real estate industry, and possibly a bellwether of declining mortgage rates in coming months, Lawrence Yun, chief economist for the National Association of REALTORS®, told thousands of attendees Friday at NAR NXT, The REALTOR® Experience(link is external) in Orlando, Fla.

On Thursday, the Bureau of Labor Statistics reported a 7.7% rate of inflation in October’s Consumer Price Index. That’s still causing pain at the grocery store and the gas pump, Yun said, but it’s down from 8.2% in September and may mean that mortgage rates have topped out. The jump in the rate for a 30-year fixed-rate mortgage, from about 3% at the start of the year to 7% today, has hit home sales hard. Sales were down 1.5% month over month and 23.8% year over year in September, according to NAR’s latest existing-home sales data.

What’s concerning is that the housing sector is a big contributor to gross domestic product, and the slowdown is pulling down the economy, Yun said. “If the housing market was stabilizing and not declining, GDP would be comfortably in the positive,” Yun said, “and we would not even be talking about a recession.”

Despite the headwinds of higher mortgage rates and slowing sales, severely limited inventory will keep home prices from declining dramatically in most of the country over the next year. “For most parts of the country, home prices are holding steady since available inventory is extremely low,” Yun said. “Some places are experiencing price gains, while some places, most notably in California, are seeing prices pull back.”

Even in areas where agents are seeing price declines, Yun said, 2022 is not a repeat of the 2008 housing crisis, when prices collapsed and foreclosures spiked. “Housing inventory is about a quarter of what it was in 2008,” he said. “Distressed property sales are almost nonexistent, about 2%, and nowhere near the 30% mark seen during the housing crash.”

Many factors are contributing to the under supply of housing. Builders aren’t building enough homes. Investors have taken single-family homes out of the market for potential homeowners. And some owners are converting homes to short-term rentals rather than selling. But one added factor this year is sellers’ unwillingness to give up their low mortgage rate, Yun said. “They may be thinking about getting a bigger home for their growing family but then deciding: ‘We love our 3% mortgage more than extra room for the baby.’” In fact, if mortgage rates were following historic norms, they’d be lower than they are today, Yun said, showing a graph that demonstrated how mortgage rates run parallel to the government borrowing rate. Generally, the gap between the two rates remains constant. It grew in 2008 after the collapse of Lehman Brothers and again in 2020 when pandemic uncertainty gripped the country. And it’s grown again this year. “Today, we’re not in panic mode. Why the abnormal spread?” Yun asked. It’s a question NAR’s advocacy team is exploring with policymakers in Washington. “Without it, mortgage rates would be 5.8% rather than 7%, and we’d see the housing market begin to revive.”

©National Association of REALTORS®
Reprinted with permission

Pending home sales continued to fall in October as higher mortgage rates shook buyer confidence. Read more from NAR’s latest home sales report.

Pending home sales fell for the fifth consecutive month in October as rising mortgage rates brought many housing markets to a halt. But now that rates show signs of stabilizing, economists say more home buyers—particularly first-timers—may gradually return to the market.

Still, contract signings dropped 4.6% in October and were down 37% from the previous year, the National Association of REALTORS® reported Wednesday. It was a difficult month for the market as buyers faced 20-year-high mortgage rates, with the 30-year fixed-rate loan eclipsing an average of 7%. Last week, however, the 30-year loan averaged 6.58%, marking the second consecutive week of declines, according to Freddie Mac.

“The West region, in particular, suffered from the combination of high interest rates and expensive home prices,” says NAR Chief Economist Lawrence Yun. “Only the Midwest squeaked out a gain. The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.” 

Housing economists are looking ahead to what the next year could hold for the real estate market. Housing activity is still expected to be robust, but home prices are expected to slow their record pace of growth, according to realtor.com®’s Housing Forecast 2023(link is external). In fact, realtor.com® predicts, annual price growth could moderate to the single digits—likely around 5.4%—for the first time since 2020.

Realtor.com® also forecasts a 22.8% increase in the supply of existing homes on the market in 2023, which would give home buyers more choices. Home sales, however, are expected to fall 14.1%, reaching their lowest level since 2012, according to realtor.com®. Rents, meanwhile, are expected to surge to new highs in 2023, adding more budget pressures on renter households who aspire to homeownership.

“Compared to the wild ride of the past two years, 2023 will be a slower-paced housing market, which means drastic shifts like price declines may not happen as quickly as some have anticipated,” says realtor.com® Chief Economist Danielle Hale. “It will be a challenging year for both buyers and sellers—but an important one in setting the stage for home sales to return to a sustainable pace over the next two to three years.” NAR will host a virtual Real Estate Forecast Summit on Dec. 13 at noon ET, where Yun and other leading economists will provide a year-end review of the 2022 real estate market and a look ahead at the economy for 2023.

©National Association of REALTORS®
Reprinted with permission