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School District’s attempts to provide housing, and how 2023 snubbed the haters!

As we declared in 2023, we are going to see some very creative solutions come to the market as we confront the highest interest rates in 22 years, lowest affordability in more than 40 years, and home prices not giving up! A few school districts are testing a new model that could help provide housing to teachers, but will it work? And is it a model for the future of housing educators? If this model is successful, can the same strategy be applied to other industries?

Overall the housing market ended the year much stronger than most people were expecting, and we also discuss what makes Gen Z a different kind of homebuyer. Spoiler alert, some of what they care about most isn’t what you’d think!

Mortgage and Real Estate are ALREADY flexing on 2024

You probably didn’t hear that refinance applications went on an absolute tear last week did you? Well, they did. Applications to refinance a home loan jumped 19% from the previous week and were 30% higher than the same week one year ago. Yup, 30% higher than the same week in 2023…and that’s not even when rates hit their peak in 2023. To me this suggests 2 things: 1) That people have warmed up to the market rates being the market rates so if you wanna access home equity you’re gonna have to take the rate that’s offered; and 2) Homeowners are likely refinancing because the HAVE too, not because they WANT to. Whether it’s cash out to pay off debt, build an ADU, or finance some other ambition…refinances are here!

And next lets talk about home prices. Sorry internet trolls, but home prices are already on the rise as we can see from the 2023 year end data. Fueled by that darn decline in mortgage rates, national home prices ROSE 5.2% during the month of November. Clearly demand for housing is there, and even if you wanna make the argument about inventory keeping prices high, you still have to have an answer for why buyer behavior has them willing to pay more than they might have just a few months prior. Yes, math and the ability to even qualify plays a part here, but what we’re really seeing is EXACTLY WHAT WE WERE TALKING ABOUT – If the Fed is actually finished raising rates, and signals cuts in 2024 then mortgage market see rates would start declining, buyers will come off the fence and that demand will keep prices high, or push them even higher.

And speaking of home prices, lets talk about the percentage of homes sold that have price cuts as part of their story. If you didn’t know a “normal” range for percentage of listings that experience a price cut is 30-35%. So 2023’s 36.5% of homes experiencing a price cut isn’t all that bad even though it falls just outside the range of normal. But we have to remember, this includes all that time when mortgage rates were their highest in 22 year and prices STILL didn’t make this reading rocket into outer space. So what’s that mean for 2024?….Less homes experiencing price cuts. With mortgage rates easing up, and inventory thawing out, the demand still exceeds the supply and the projected percentage of homes to experience a rate cut this year is only 32%. That’s a lot of margin for error in case that turns out to be wrong, and still within the rage of what we traditionally consider “Normal”.

So with that, let’s take a quick look at what’s coming up in the markets this week.

Monday the markets will be closed.

Tuesday we get the Empire State Manufacturing index

Wednesday we get Core retail sales and retail sales month over month, and more importantly we get the national association of home builders market index and THIS is probably gonna look pretty good!

Thursday we will get unemployment claims, Philly Manufacturing index, building permits and Housing starts. This is definitely the most data packed day of the week.

And Friday we have Preliminary Consumer Sentiment, Existing home sales and Inflation expectations.

Thanks again for tuning in to Monday Mortgage Minute.

Remember to like, subscribe and turn on notifications so you see this show right when it posts each week.

Share this video with someone you care about so they can WIN in mortgage and real estate in 2023.

We’ll see you again next week!

The New Year is already off to a strong start!

2024 is already off to a strong start for housing and real estate. Mortgage Rates calmed down from their furious 2023 and the Fed is set to make numerous rate cuts throughout the year. Also, a new solution has arisen in an attempt to close the gap between teachers averages wage and local housing costs of some well known municipalities. We’re only 1 week in and momentum is already here!

A new report came out the first week of January talking about the disparity between the average teachers’ pay and their ability to afford housing payments based on municipal home price averages. The conclusion…the average teacher wage falls WAY short of what’s needed to afford the average priced home in most of the nations top 100 cities. Of course, we also have to remember dual income where that’s present, but as the report asks: “How can we attract more teachers to areas where the housing is well beyond their monthly income and the rent might be too?” One school districts solution was to become a landlord themselves and we will have to see if others follow suit. Do you think this could be the way forward?

Also last week the November pending sales was released. Pending home sales in November were unchanged compared with October and 5.2% lower than November of last year, according to the National Association of Realtors. Remember, this is about number of homes sold – NOT PRICE OF HOMES SOLD. Mortgage Rates peaking near 8% in October and typical holiday lull are being blamed for the lack of increase in sales, but it also signals that we most likely really hit rock bottom for number of units sold during this current economic cycle. With mortgage rates sharply lower then they were in the fall of 2023, we’re likely to see pending home sales make a strong resurgence in the weeks and months to come.

And let’s take a moment to talk about how the housing market finished up 2023. For the final week of the year, Inventory ended up higher than it was for the final week of the previous year. There were more homes under contract than the previous year, there were no statistically significant price reductions to cause alarm that the bottom is about to fall out of home prices., and interest rates settled in WELL below where they were during the fall and ironically looked mostly similar to how they did to end 2022. All this adds up to a pretty confident looking housing market to kick off 2024 and WE’RE HERE FOR IT!

So with that, let’s take a quick look at what’s coming up in the markets this week. Several Fed members will be speaking this week, but since we got last weeks Fed meeting minutes released, I’m not expecting to hear much deviation from what we’ve come to learn about their plans for 2024…which is in short: numerous rate cuts and a buncha of arguments about when they will start and how many they will do.

Monday Tuesday and Wednesday are pretty light days in the market, and no notable news will released.

Thursday we will get a lot of CPI data: Core CPI Month over month, CPI month over month, CPI year over year and unemployment claims

Friday we will hear Core PPI month over month and PPI month over month

Thanks again for tuning in to Monday Mortgage Minute.

Remember to like, subscribe and turn on notifications so you see this show right when it posts each week.

Share this video with someone you care about so they can WIN in mortgage and real estate in 2023.

We’ll see you again next week!

Home Prices Didn’t crash, Here’s what to expect in 2024 if you want to buy a home or Refinance

Mortgage Rates are paving the way for a great end of 2023 and a strong start to 2024. As we wrap up this chapter of some of the most tumultuous mortgage landscape seen in decades, there’s brewing hope on the horizon that 2024 and beyond will shape a housing recovery that looks different than any one we’ve seen previously. Creativity, patience, preparation, and a healthy dose of “get-to-it-ness” will benefit homeowners and aspiring buyers in this next chapter to be written.

Merry Christmas and Happy New Year | Get yourselves ready for 2024!!!

Last week’s falling mortgage rates and year-over-year increases in new listings suggest that 2023’s frozen housing market is thawing and Sales are likely to climb after the typical holiday lull. The median U.S. monthly mortgage payment was $2,472 during the four weeks ending December 17, down $264 from the October peak but up 11% year over year. Citing a recent Redfin article, just last week Redfin saw a double-digit annual increase this week in homeowners contacting its real estate agents for help selling their homes. This is certainly a nice prelude to what could be a come back year for mortgage and real estate in 2024. We will certainly celebrate that holiday cheer through new years and be ready for homeownership gains in 2024!

Also, something interesting is unfolding to end 2023 which has to do with the home price collapse that was all for naught. The most recent data available to end the year reports listed homes that had a price cut in order to sell in 2023 was 4% LOWER than the 2022 levels. Yah, LESS HOMES TOOK PRICE CUTS IN 2023 THAN 2022. So what happened with the collapse? Well, sellers just didn’t want to sell, and enjoyed holding on to their historic low interest rates. As we wind down the lowest volume sales year in decades it turns out that economic theory held prevailed, home prices were only destined to dive if mass volumes of listings hitting the market all at once…and that just simply didn’t happen.

And after a year full of record-high interest rates and home prices, experts say there are signs of improvement for the housing market in 2024. In December, the average mortgage rate dropped below 7% for the first time since August and after an 8% peak in October, which pushed housing costs to the highest level since 2000. Jessica Lautz, the deputy chief and vice president of research at the National Association of Realtors says, “The decline poses good news for buyers.” She went on to say that “First-time buyers stand a chance at this time period.” It’s a trade off: Do they want to run the risk of encountering higher competition when rates are lower or do they want to increase the probability of securing homeownership?” Well, what do YOU think about that? Should renters hold out even longer for price declines while rates are also easing up? Or, do you think it will be survival of the fittest and everyone on the fence should jump into the game right now?

So with that, let’s take a quick look at what’s coming up in the markets this week. You know it’s going to be a light week already, but there’s a few things we’ll have our eyes on as they relate to housing and jobs.

Monday it’s Christmas Day and a bank Holiday, the markets are closed

On Tuesday we get Home Price Index Month over Month and year over year

And Thursday Unemployment claims comes out and Pending Home sales

Thanks again for tuning in to Monday Mortgage Minute.

Remember to like, subscribe and turn on notifications so you see this show right when it posts each week.

Share this video with someone you care about so they can WIN in mortgage and real estate in 2023.

We’ll see you again next week!

Relief on the horizon for homeowners and the economy at large!

We’ve been hoping for good news for so long now and finally we have some! Jerome Powell and the Fed delivered some great news about interest rates and some forward-looking progress about potential rate cuts in 2024. And ALREADY we are seeing buyers of 2022 and 2023 the advantage of their VA IRRRL as rates slide below 7%!!!

Lower Mortgage Rates, Fed Rate cuts coming, 2024 will be awesome!

The housing market cheered as the Federal Reserve signaled interest rate cuts next year after making a series of rapid rate hikes starting in 2022. While the central bank did not completely rule out the possibility of a rate increase in 2024, that action seems unlikely. Instead, fresh economic projections from central bank officials showed rates would be slashed to a median 4.6% by the end of 2024, suggesting three 25 basis point cuts from current levels. Experts expect the path for monetary policy to support further declines in mortgage rates, just in time for a traditional busy spring housing market. But home buyers who waited on the sidelines for better rates next year may find the waiting game didn’t pay the dividends they expected. The median price of single-family homes in the United states is 425,000 which is 2.4% up from last year at the same time according to Altos research. And if rates continue to ease while demand picks up…home prices will follow suit and climb as well.

So this fed meeting everyone is talking about really was quite positive. With the inflation rate easing and the economy holding in, policymakers on the Federal Open Market committee voted unanimously to keep the benchmark overnight borrowing rate in a targeted range between 5.25% to 5.5%. Committee members penciled in at least three rate cuts in 2024, which is less than what the market had been pricing in, but more aggressive than what officials had previously indicated. The feds dot plot chart indicates another four cuts in 2025 and three more rate reductions in 2026 which could take the feds funds rate down to between 2% to 2.25%. The committee added the qualifier that inflation has eased over the past year while maintaining its description of prices as elevated. Fed officials see core inflation falling over the next two years eventually getting back to their 2% target but not until 2026, that’s right 2026.

And mortgage rates fell below 7% for the first time in four months, bringing some relief to the US housing market that has been plagued with affordability all year. Borrowing costs have eased for seven straight weeks now bringing rates all the way down from their highs of 8% in October down to 6.9% on average. In some cases, VA with high credit scores are still well below THAT! Just last week we were able to lock in a VA loan at 5.875% When’s the last time you saw that number? That’s right it’s been a while but this could also just be a sign of things to come so if you are watching this and you have a FHA or VA loan that is 6.5% percent or higher, drop us a DM or comment below and maybe we can help you save some money with one of your loan program’s streamline refinance options.

So with that, let’s take a quick look at what’s coming up in the markets this week. It will be a pretty light week leading up to Christmas break for the markets, and given the fact that literally everyone was waiting on last week’s Fed meeting to be the Finale we were all hoping for, this week can really take a chill pill and ease us on home to a simple end of year.

Monday we get the National Association of home builders housing market index

on Tuesday we’ll get building permits and housing starts

on Wednesday we will get the consumer confidence reading as well as existing home sales

Thursday will deliver final GDP quarter over quarter, unemployment claims, and the Philly fed manufacturing index

Friday we’ll finish it off with core PCE, revised consumer sentiment, and new home sales

Thanks again for tuning in to Monday Mortgage Minute.

Remember to like, subscribe and turn on notifications so you see this show right when it posts each week.

Share this video with someone you care about so they can WIN in mortgage and real estate in 2023.

We’ll see you again next week!

Fed Rate Cuts forecasted in 2024, will there be a housing market rebound?

Looks like pressure is mounting on the Fed to make rate cuts in 2024. Could we actually see numerous rate cuts on the horizon? And whether we get those or not, the housing market is showing signs of a healthy rebound from the challenges of 2023. The conclusion of this year is already looking more promising than the fall, and everyone is really eager for a strong year in 2024!

Rates Fall as 2024 Loan Limits Increase. Will home prices increase or decrease?

We’re ending 2024 on a semi-positive note with mortgage rates falling as we head into December 2024. It’s a nice change coming from the fall where we saw pending home sales drop to a record low (even worse than the numbers seen in the great financial crisis of 2008/2009. So what’s the future hold in store for mortgage and real estate in 2024?!?

New Loan Limits & 2024 Housing Outlook

Federal Reserve Chairman Jerome Powell said Friday that it was too early to declare victory over inflation, watering down market expectations for interest rate cuts next year. “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease,” Powell said in prepared remarks.

But that’s not stopping some analysts and money managers from saying the Fed needs to cut rates starting as soon as March 2024 and possibly have to cut rates 5 times throughout the year.  The base case is that they need to do this is in order to avoid an extreme and protracted monetary tightening cycle. The markets are largely concluding that the fed is done with its tightening cycle, but they will have to give up on the goal of getting back to 2% inflation. So already, 2024 is making ripple effects and we’re not even there yet!

It’s looking like we’ll end 2023 with higher housing inventory than this time last year. Home prices will also be up and we have more homes under contract than we did at the end of 2022. All told, these signs position 2024 for a turnaround from one of the slowest home-sale years in decades.

Price reductions are receding now for the new-year cycle, with 38.7% of the homes on the housing market taking a price cut in the last week. That’s a lot, but it’s less than the same week a year ago, and it’s not deteriorating. Basically, the extremely low volume of sales isn’t causing overall home prices to even take a dent.

And Home prices held up surprisingly well in 2023 despite very few transactions. The median price of single-family homes in the United States was $425,000 for the week, which is unchanged from the week prior and 2% higher than the same period in 2022. That’s right, higher…again. So no collapsing home prices on the horizon…sorry internet trolls.

So in the end, we’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume and elevated but decreasing price cuts.

Did you hear about the new conforming loan limits for 2024? Recently Fannie Mae and Freddie Mac released their revised loan limits for 2024. This increase reflects a 5.5% uptick in conforming low limits that will allow homebuyers and refinancers to acquire a lower mortgage rate compared to jumbo or high balance offering of this same loan balance.

Nationwide the new conforming loan limits are as follows:

  • The 1 unit loan limit is $766,550
  • The 2 unit loan limit is $981,500
  • The 3 unit loan limit is $1,186,350
  • The 4 unit loan limit is $1,474,400

For areas considered “high cost” across the country the loan limits are even higher. For example, in San Diego County:

  • The 1 unit loan limit is $1,006,250
  • The 2 unit loan limit is $1,288,200
  • The 3 unit loan limit is $1,557,150
  • The 4 unit loan limit is $1,935,150

If elevated rates and lower conforming loan limits were the reason you were sidelined in 2023 take heart, because it looks like 2024 could be the year that affordability opens up for you once again

Any of you watching this that are looking to buy a house in 2024, send us a DM or drop a comment so we can help you get qualified.

Thanks again for tuning in to Monday Mortgage Minute.

Remember to like, subscribe and turn on notifications so you see this show right when it posts each week.

Share this video with someone you care about so they can WIN in mortgage and real estate in 2023.

We’ll see you again next week!