Navigating the homebuying process in 2023

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The Twin Cities area is seeing a shift in its real estate market. According to data collected

The Twin Cities area is seeing a shift in its real estate market. According to data collected by the Minneapolis Area REALTORS, the average sale price reached $400,095 in February 2023, marking a 0.7 percent increase compared to 2022.

This slow but steady growth indicates a healthy real estate market for buyers and sellers, with plenty of opportunity for investment and residential purposes. Additionally, the inventory of homes for sale is up 7.1 percent from last February, providing potential buyers with a broader range of options.

Whether you’re a first-time homebuyer, looking to upgrade your living situation, or are an experienced real estate investor, this guide provides valuable insights and recommendations for navigating the ever-evolving MinneapolisSaint Paul real estate market in 2023 and beyond — beginning with the homebuying process.

Is buying a home in today’s market a good idea?

Buying a home shouldn’t be a split-second decision. Interest rates, personal financial stability and your long-term goals are all crucial factors to take into consideration before making a purchase.

“While certain market conditions can incentivize someone to buy a home in one time over another, at the end of the day, the best time to buy a home is when you are ready to buy a home,” said Stephen Spears, senior vice president of Twin Cities community banking at Bremer Bank. “I firmly believe you should never base a home purchase decision on the current market conditions. You should buy a home based on your family’s needs, financial goals and abilities.”

In other words, regardless of the market, buying a home should be a thoughtful and calculated decision based on your circumstances and long-term financial goals.

Buy, rent or wait

Ah, yes, the age-old question

— should I buy or rent a home?

The answer truly depends on individual circumstances, including personal obligations (e.g., work, school, etc.) and what you can realistically afford.

For those not quite ready to buy, renting can provide flexibility and freedom that homeownership may not. On the other hand, if you’re ready to put down roots and invest in property for the long haul, buying a home can provide financial stability and potential for longterm growth and equity. Here are a few things to consider before making a final decision:

Monthly payments

Homeowners must make monthly mortgage payments, which is a combination of the interest and the principal dollar amount on the loan they borrowed to purchase the property. Mortgage payments are typically set for a fixed amount of time, 15 or 30 years, and can addition to utilities, depending on the rental agreement. Unlike homeowners, renters do not own their property and therefore are not responsible for property taxes, repairs, or building renovations and maintenance.

“From the mortgage side, I would encourage people to ask themselves what they can afford and then consider what they can qualify for — each means something different,” said Spears. “In many situations, what someone technically qualifies for is very different than what they can afford, depending on other priorities and financial obligations like child-related expenses, debt payments, travel plans, etc.”

Lifestyle in metropolitan areas where homebuying may only be feasible for some, due to high prices and limited inventory.

You should also consider your lifestyle when deciding whether to buy or rent a home.

For example, buying may be the better choice if you like your city, are ready to settle down or plan on staying in the same job for a while.

Peace of mind

Owning a home can provide a sense of stability and peace of mind. When you own a home, it is legally yours, and no one can take it away from you (as long as you make your mortgage payments).

Renting isn’t as permanent as owning a home, and you may be more vulnerable to sudden rent increases or the landlord’s decision not to renew your lease. However, renting does come with less financial risk and no responsibility for building maintenance or unexpected repairs.

Overcoming credit barriers

Poor credit can affect the homebuying process in one of two ways: It can either disqualify you from getting approved for a mortgage altogether or result in getting approved with unfavorable terms (e.g., higher interest rates).

your current situation and help you learn how to improve your credit — and there are a lot of resources out there to help you rebound from a low score!”

A few things you can do to fix your credit: much misinformation is out there. To help you make an informed decision, here are some of the most common myths about buying a home.

• Check your credit report for errors: One in five Americans has a mistake or “confirmed material error” on their credit report, according to a U.S. Federal Trade Commission (FTC) report. So, before you start building a credit repair plan, double-check your report to see if there are any errors you can dispute.

• Make monthly minimum payments: If you can’t pay off your balances in full before the due date, make the minimum payment each month. Payment history is an important factor that makes up your credit score.

Myth: You need 20 percent of the total home price for a down payment.

This myth is as old as time. Fortunately, you can buy a home with much less than 20 percent down.

Myth: The lender with the lowest interest rate is the best choice.

Just because an interest rate is lower doesn’t mean it’s the best choice. “There are many factors that go into the cost of a mortgage rate, and interest is only one of them,” said Spears. “Oftentimes, there are other fees associated with a loan. The best rate does not equal the best choice.”

Myth: You must keep your mortgage for at least two years.

There are no hard and fast rules for how long you need to keep your mortgage. However, one exception is pre-payment penalties (i.e., a penalty for paying your mortgage off too quickly).

“Pre-payment penalties are not common in today’s market,” says Spears. “But be sure to fully understand what mortgage arrangement you eventually decide on carefully.” adjust based on interest rates and other financial factors.

The bottom line Knowledge is power, especially when it comes to buying a home! Before you begin your journey, do your homework and crunch some numbers. Doing so will help you better understand your qualifications and set you up for success.

Renters pay a fixed amount to their landlord or a rental company each month to live on the property. This rental payment may include utilities or be in

If you prefer a more mobile lifestyle, value flexibility and the ability to quickly move between locations, or have a job that requires frequent relocations, renting may be the better fit. Renting can also offer more affordable housing options

“Fortunately, poor credit is something you can proactively work with a credit counselor on,” said Spears. “Each person’s finances are unique and specific to them. Credit counselors can help you better understand

• Resist the urge to close accounts: While it may seem like a good idea to close a credit card you’re not using, closing accounts could actually negatively affect your credit. Instead, use these cards to buy small items (e.g., coffee, gum, candy, etc.) and pay off the balance immediately.

Three homebuying myths, debunked You’d be surprised by how

The most important part of the homebuying process is seeking information to fully understand your financial situation and options — and the Bremer team can help! Our mortgage loan officers are well-equipped to help guide you down the path that makes the most sense for your needs and refer you to other real estate and financial experts, as needed. Learn more at bremer.com.

Champion

Continued from page 1 that says, if you’re in for a felony probation or paper, until you complete those sentences and you’re ‘off paper’ which is what we call it this industry—you can’t vote. It could have been a person who has a chemical dependency problem that ends up being charged for possession of drugs. The bottom line is that the person can’t vote.

MSR: Why was it important for you to make this change and restore voting rights?

Champion: Because I believe in second chances, I believe a person should not be perpetually punished for making a bad decision. If they’re out amongst us, then there was some decision made that they were safe and that was okay, and that they should be with us.

We thought it was important for people to have the right to vote because there are also people working and if you’re working, you’re doing what—you’re paying taxes. You are paying taxes without being able to speak to who’s representing you. Whether that’s on the school board, city council,

Givens

Continued from page 1 founding of the Givens Collection of African American Literature and permanently house it at the University of Minnesota.

Givens’ presence in the arts world included hosting readings and art exhibits at his home.

“He invited me to a read-

Standoff

Continued from page 1

In addition, Yang, who previously lived in Altoona, Wisconsin, was charged along with Raylean Gurneau with animal cruelty related to shooting a dog with BB gun pellets and subsequently running it over. He also had convictions for stolen vehicles ranging from motorcycles to SUVs.

The federal warrant affidavit said Yang carjacked someone at gunpoint as he fled from a truck he was riding in that was stolen and being pursued by Ramsey County deputies. Someone in that truck threw a puppy out to hinder law enforcement from pursuing them. The affidavit also noted he was armed at all times.

The FBI Minneapolis office says their agents saw that Yang was armed as he emerged