Mortgage Heroes Update – July 22nd, 2021

Video Transcript:

Hi Mortgage Heroes Andy Cruz here in business development and this is your weekly video newsletter this week we’re going to talk about the most recent Home Price Index report and it’s astonishing results, but before we do that make sure you subscribe to the channel, hit the like button and tag that notification bell so every time we drop a new video you hear about a first.

This is some right into this week’s topic which is the most recent Home Price Index report. Now this is the report from May 2021 We always get it about 60 days after the month passes. So, from May 2020 to May 2021 We had a national home price appreciation rate of 15.4% 15.4%. Now there are certain cities of course that posted a much better number than that, which we’ll get to in a minute. But what does this really mean what this really means is that people were on the move over the last 12 months and we already knew that, but this is just a crazy reflection of how much home price appreciation changed as people moved within states in between states. And as we saw mortgage rates go down, increasing affordability during that time which helped elevate home prices. Now the forecast is that we will see, home prices appreciate 3.4%, which is a big difference from the 15.4 we’re talking about now.

However, even though it may look like it’s slowing. That doesn’t mean it has stopped, I mean if you’re still forecasting a 3.4% annual appreciation, that’s kind of within the range of what is normal appreciation still, even after a year of having crazy appreciation in any given year, the normal talking point for those of us in mortgage and real estate is average over long periods of time, appreciation is three to 5%. So we’re expecting that there’ll be another 3.4% increased nationwide average over the next year. Even after we’ve had such a crazy appreciation, since May of 2020.

Next we’re going to look at the state map, and as you see here, every single state had appreciation. And what’s remarkable about this is that the map has really never looked like this until this season the real estate, you know, it’s likely that you’ll see real quick glimpses of certain hot pockets where there’s a lot of new development or there’s a lot of migration to a specific place, but, you know, every single state had massive appreciation, over the last 12 months. And this is value increases from people staying inside the state and the moving up, this is some people making lateral move.

You’ve probably seen maybe even firsthand stories that people having multi generations moving into another home. I have a personal story, a friend of mine who moved in three different generations into a larger home which was more expensive because they sold their other two that they had held independently, and then moves all of the family generations into a new one. So, this kind of thing is happening not only within states but people coming and migrating from out of state into a new one. And there are a number of states that you can see here that had double digit home price appreciation, and some of that appreciation is coming from out of state buyers who netted a lot of cash from the sale of their home.

People that have left states like New York who have left California just to name a few. And they’ve gone to other states for whatever their reason is, have taken their cash that they got from the sale of their home and use that to help put money down over and above what the list price of those homes were in some of these other states, I mean just look at Idaho as an example, Idaho, came in at a 30% appreciation annualized over the last 12 months Idaho has a 30% home price appreciation result that is really unheard of. And that has to do with a lot of an estate money that became available, and liquid because people in states like California, New York sold their houses and looked elsewhere to live.

Lastly, this kind of just blows my mind if you look at the top 10 metro home price appreciation, you see that seven out of the top 10 had a double digit appreciation from May of 2020 to May of 2021 you still see Phoenix there in first place with a 23.9% home price appreciation, San Diego was in a I’ll say not so distant second. I mean, 18.8% is still a crazy number even though it’s second, and if you will recall, we’ve been behind Phoenix for almost the last 12 months straight of home price appreciation they’ve certainly led the pack nationwide as a whole. But San Diego has been right there kind of neck and neck with them. In one, two position for those same 12 months I’m referring to.

Now home price appreciation of 18.8%, obviously can’t continue forever. Again, that has a lot to do with not only competitive market, with lots of demand, limited inventory, but also the cost of money and the cost of borrowing money being so low. Now what we’re starting to see though is that, as this continues on for now beyond a year and beyond an entire 12 month period of time, you are starting to see a little bit of buyer reluctance where people are kind of running into their affordability thresholds or taking a second look and going hold on a second, there’s, there’s got to be a slowdown soon we don’t know when it’s going to be we don’t know how it’s gonna happen.

We don’t know how big it will be, but you are starting to see a little behavior change and that’s what we’re looking for coming up next, you know inside transactions you get to see firsthand what is happening and what people are thinking about what they’re talking about the questions they ask the comments they make, and so we get a lot of firsthand feedback from the front lines of mortgage real estate, constantly, every single day. So we kind of have our finger on the pulse of what’s happening and changing and we are starting to notice that there is a different conversation happening with some of our buyers, there’s a different conversation happening with some of our folks refinancing.

These are all things that are kind of, they pre seed whatever market shift you’ll eventually see they come up in decisions and they come up in the rationale for why someone is or is not doing something, and then we see the result of those decisions, three months, six months, nine months 12 months down the road, and that’s what’s happening right now, some of the conversations we’re having with people are kind of indications that there are shifts and changes coming up, coming up in the next few months and throughout the rest of 2021 of course into 2022, but just take note of that because what we’re saying and doing now, and behavior that shape now translates into tomorrow’s shifts and tomorrow’s changes on the more macro scale and the broader scale of things.

So, you know just be attentive to those things, especially if you’re in a decision or a position where you’re trying to make a decision right now about whether you should buy a new home, sell the house you have refinance and take cash out, pay down your consumer debt, you know be brief, be really vigilant in those things and when you’re making your decision, but let us know how we can help you as well. But it’s not just us that can be available to you, it’s everyone in our resource pool as a mortgage company.

So if there’s a situation that you have that’s specific to you that’s unique to you that you want to talk to us about, and we can help impart some wisdom on what might be your next best step and the next right thing for you to do in mortgage real estate, please let us know. Thanks again for watching this week’s video newsletter. As you can see we are underway with our construction still over the last couple of days we had our recording room walls go up, we’ve insulated the room, we have our new recording casual conversation quarter coming up that wall got moved as well. So, even though there’s a lot of mess and chaos as you can see around here we’re actually making great strides towards the next steps of what it looks like to be part of the mortgage heroes family, and deliver quality information immediate to you guys on a consistent basis.

Thanks again for watching, we’ll see you again next week.

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Rates & Fees Disclosure:
^‡ The payment on a $300,000 30-year fixed-rate VA loan at 3.000% with a 80% loan-to-value ratio is $1,292.01 with 0 (zero) origination points due at closing. The annual percentage rate (APR) is 3.235%. Payment does not include tax and insurance premium impounds. The actual payment amount will be greater. By refinancing your existing loan, the total finance charges may be higher over the life of the loan. Some state and county maximum loan amount restrictions may apply. Appraisal fee of $600, Processing Fee of $895, Underwriting Fee of $795 included in APR calculations with borrower paying 0 (zero) loan origination points.

^‡ Based on Mortgage Heroes internal data.