Episodes

  • Riding the Real Estate Roller Coaster: The 2024 Recap

    Riding the Real Estate Roller Coaster: The 2024 Recap
    Dec 23 2024

    Overall Market:

    Existing home sales saw a significant jump in November, marking the second consecutive month of increases following a sluggish summer. (NAR)

    Inventory is up nearly 18% year-over-year, giving buyers more options. (NAR)

    Despite increased inventory, the market remains competitive, particularly at lower price tiers. (CoreLogic)

    Investor activity has slowed, with overall purchases down 25% year-over-year. (CoreLogic)

    This slowdown benefits first-time homebuyers, though competition persists. (CoreLogic)

    "Smaller-scale investors play a powerful but understated role in the market, buoying home prices even as overall demand has softened," (CoreLogic)

    Mortgage Rates:

    The average 30-year fixed-rate mortgage rose to 6.72% for the week ending Dec. 19. (Freddie Mac)

    Despite three consecutive Fed rate cuts, mortgage rates remain elevated and are expected to hover around the 6%-7% range in 2025. (Freddie Mac, HousingWire, Bankrate)

    The Fed's decision to slow the pace of rate cuts in 2025, driven by concerns about inflation, has led to uncertainty in the bond market, pushing mortgage rates higher. (Fed, HousingWire)

    "Treasury yields have also climbed in response to market expectations of inflationary pressures tied to the incoming administration’s proposed policies, such as tariffs and tax cuts, even though these measures have yet to take effect, putting additional upward pressure on mortgage rates.” (Sam Williamson, senior economist at First American)

    Affordability:

    Home affordability worsened in Q4 2024, continuing a trend. (ATTOM)

    Major Midwest metro areas like Chicago, Houston, Detroit, Philadelphia, and Cleveland offer the most affordable options among populous counties. (ATTOM)

    Median home prices in populous counties saw significant increases, notably in the Bronx (13.3%), Wayne County, MI (12.9%), and Cook County, IL (12.1%). (ATTOM)

    New Hampshire, a traditionally less competitive market, is experiencing a housing crisis with soaring prices and limited inventory, creating challenges for economic growth. (HousingWire)

    New Construction:

    Single-family housing starts rebounded in November, driven by cautious builder optimism. (Zillow Research)

    However, total housing starts remain below last year's levels, indicating continued hesitancy from builders. (Zillow Research)

    The mismatch between housing supply and demand, particularly in New Hampshire, highlights the need for increased construction to alleviate affordability concerns. (HousingWire)

    Key Trends & Developments:

    The National Association of Realtors (NAR) issued a cease-and-desist letter to Phoenix Realtors over its "MLS Choice" option, citing concerns about maintaining Realtor brand standards. (Real Estate News)

    REsides MLS launched "Select Subscription", allowing agents to join the MLS independent of their brokerages and NAR membership. (RISMedia)

    This move potentially challenges traditional MLS structures and could impact Realtor associations.

    Looking Ahead:

    The housing market is expected to be volatile in the first quarter of 2025, influenced by upcoming changes to Stamp Duty thresholds in England and Northern Ireland. (Nationwide)

    Experts predict mortgage rates will likely moderate in January but remain elevated throughout 2025. (Bankrate, Realtor.com, First American)

    The potential for a recession in 2025 adds further uncertainty to the housing market outlook. (HousingWire)

    Continued monitoring of inflation, labor market data, and the Fed's actions is crucial for understanding the future direction of the housing market.
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    13 mins
  • Foresights on the Housing Market Outlook for 2025

    Foresights on the Housing Market Outlook for 2025
    Dec 16 2024
    Key Themes:Cautious Optimism for 2025: Experts predict a more balanced market with increased sales, stabilizing mortgage rates, and growing inventory, creating a more favorable environment for both buyers and sellers.Affordability Remains a Challenge: While rising inventory and stabilizing rates are positive signs, affordability remains a concern, especially for first-time buyers, due to high home prices and potential rent concessions.Regulatory Scrutiny and Policy Changes: The National Association of Realtors (NAR) faces legal challenges and scrutiny over commission practices, while potential overhauls of banking regulators could significantly impact the mortgage industry.Innovation and Adaptation: The rise of ADUs (accessory dwelling units) and the exploration of reverse mortgages represent efforts to address housing shortages and cater to the aging population.Important Findings:Housing Market Outlook:Increased Sales: NAR projects existing-home sales to increase by 7-12% in 2025 and 10-15% in 2026, with new home sales rising by 11% in 2025 and 8% in 2026. ("More Home Buyers Expect Rosier 2025 Housing Outlook")Stable Mortgage Rates: Mortgage rates are expected to stabilize near 6% in 2025 and 2026, potentially becoming the "new normal". ("More Home Buyers Expect Rosier 2025 Housing Outlook")Growing Inventory: Housing inventories are predicted to continue rising in 2025, driven by stabilizing rates and improving market conditions, providing more opportunities for buyers. ("More Home Buyers Expect Rosier 2025 Housing Outlook", "housing-hot-spots-for-2025-top-markets-amid-stabilizing-rates-report-12-12-2024.pdf")Rising Distressed Properties: An increase in distressed properties could signal a slowdown in the 2025 housing market. ("Distressed properties signal a slowdown in 2025 housing market")Resilient Demand: Despite high mortgage rates, housing demand remains resilient, fueled by firm consumer income growth and a bullish stock market. ("Mortgage rates cool again ahead of Fed meeting")Affordability and Buyer Behavior:Rent Concessions Complicate Buying Decisions: Potential rent concessions might discourage first-time buyers from entering the market. "If they're being offered no rent increase and perhaps a concession to stay in that apartment, that's going to be tough to turn down in this market," cautions Mike Fratantoni, chief economist at the Mortgage Bankers Association. ("A mix of optimism and uncertainty as forecasters look to 2025")National Debt Impacts Mortgage Rates: Addressing the national debt is crucial for lowering mortgage rates meaningfully, according to Lawrence Yun, chief economist at NAR. ("A mix of optimism and uncertainty as forecasters look to 2025")Mortgage Delinquencies Increase: Rising mortgage delinquencies suggest ongoing affordability challenges for some homeowners. ("CoreLogic: Mortgage delinquencies kept climbing in September")Buyer Sentiment Improves: A record-high share of consumers expect mortgage rates to decline in the next 12 months, contributing to increased optimism about buying a home. ("Mortgage rates cool again ahead of Fed meeting")Regulatory Landscape:NAR Under Scrutiny: The Department of Justice's investigation into NAR's commission practices continues, raising concerns about potential anticompetitive behavior. ("DOJ to SCOTUS: We never agreed ’not to reopen’ NAR investigation", "Opposition to approval of NAR’s settlement continues")NAR Implements New Rules: NAR's new rules regarding buyer agent compensation transparency are causing adjustments in real estate practices and forms. ("Wrapping Up a Year of Real Estate Practice Changes", "The Ten: NAR’s new rules and the ‘messy’ race to comply")Potential Banking Regulator Overhaul: Trump administration's proposed changes to banking regulators, including potential consolidation or elimination, could significantly impact the mortgage industry. ("Trump reportedly explores overhaul of banking regulators")Emerging Trends:ADUs Gain Momentum: The increasing popularity of ADUs presents a potential solution to the housing shortage, but zoning laws and community acceptance remain barriers. ("ADUs are gaining momentum — can they help fix the housing shortage?")Aging in Place and Reverse Mortgages: The focus on aging in place highlights the need for accessible housing options, with reverse mortgages potentially playing a role. ("AARP assesses aging in place, role for reverse mortgages", "Survey names best and worst cities for aging in place")Top Housing Markets for 2025:NAR has identified ten housing markets expected to outperform in 2025, including Boston, Charlotte, Grand Rapids, Greenville, Hartford, Indianapolis, Kansas City, Knoxville, Phoenix, and San Antonio. These markets exhibit strong economic indicators, demographic trends, and favorable housing market conditions. ("housing-hot-spots-for-2025-top-markets-amid-stabilizing-rates-report-12-12-2024.pdf")
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    16 mins
  • Rising Star in the Housing Market: Manufactured Homes

    Rising Star in the Housing Market: Manufactured Homes
    Dec 9 2024
    Overall Market TrendsThe housing market is currently experiencing a period of uncertainty and volatility.Mortgage rates are fluctuating, but forecasts suggest a potential stabilization and slight easing in 2025.Inventory remains low, particularly in areas with high demand, creating a competitive market for buyers.Home prices continue to rise, albeit at a slower pace compared to previous years.The labor market remains strong, with steady job gains, but there are signs of potential cooling which could influence the Fed's decisions on interest rate cuts.Key Factors Influencing the MarketMortgage Rates: The volatility of mortgage rates throughout 2024 has significantly impacted affordability and buyer demand.Current rates hover around 6.69% for a 30-year fixed-rate loan. (Source: Freddie Mac, Dec. 5, 2024)Experts predict potential for rates to drop further if the economy slows down or inflation cools, but acknowledge the possibility of upward movement as well. (Source: Sam Williamson, senior economist at First American)Refinance activity remains low but could jump if rates drop significantly. (Source: Mat Ishbia, CEO of UWM)Inventory Levels: Low inventory is a persistent issue, especially in desirable areas, contributing to a competitive market and driving up prices.This lack of inventory is particularly challenging for first-time buyers and those seeking affordable options. (Source: Altos Research data cited in "Is now a good time to buy a house?")Economic Uncertainty: Potential for a recession and the unknown impact of political and global events contribute to market unpredictability.Investors are closely watching economic indicators and Fed policy decisions for signals on the future direction of the market. (Source: Lisa Sturtevant, chief economist at Bright MLS)Affordability Challenges: Rising home prices and elevated mortgage rates continue to strain affordability for many potential buyers.This affordability crisis is leading some to consider renting instead of buying in 2025. (Source: "Housing Market Predictions: Buyers Will Choose to Rent in 2025")Noteworthy Events and Policy ImpactsFHA Extends Foreclosure Moratorium for Hurricane Victims: This extension aims to provide relief and support to those affected by Hurricanes Helene and Milton.It highlights the importance of disaster preparedness and the role of government agencies like FEMA and HUD in assisting communities during recovery. (Source: "FHA extends foreclosure moratorium for hurricane victims")NYC Council Approves Sweeping Housing Plan: The "City of Yes" plan calls for the construction of 82,000 new homes over 15 years to address the city's housing crisis.This ambitious plan, while facing some controversy, demonstrates efforts at the local level to increase housing supply and address affordability. (Source: "NYC council approves sweeping plan that includes 82,000 homes")Wells Fargo Expands Down Payment Grant Program: This expansion aims to assist underserved borrowers in 12 additional metro areas, showcasing efforts within the lending industry to improve access to homeownership. (Source: "Wells Fargo expands $10K down payment grant program")Expert Insights and PredictionsFitch Ratings Revises Mortgage Sector Outlook to "Improving": This revision, based on forecasts of lower mortgage rates and increased origination volumes, provides a positive outlook for the industry. (Source: "Fitch Ratings says the 2025 mortgage sector outlook is ‘improving’")Realtor.com Forecasts Low Sales but Rising Prices in 2025: This prediction suggests a continuing trend of tight inventory and steady price growth, potentially favoring sellers in the market. (Source: "Realtor.com's 2025 housing forecast: Low sales but rising prices")Redfin Predicts Resilient Homebuyers in 2025: This forecast anticipates sustained buyer demand despite affordability challenges, pointing to a continued competitive market. (Source: "Redfin's 2025 housing market forecast predicts resilient homebuyers")Amidst these changes, the need to adapt stands out. Agents need to guide buyers realistically and make rental properties attractive for investor clients. The rise of manufactured homes and the expansion of assistance programs like those from Wells Fargo also present new avenues.Key Themes:Mortgage Rate Fluctuation: Mortgage rates are experiencing significant volatility, influenced by economic indicators, inflation concerns, and Federal Reserve decisions.Housing Inventory Challenges: While some predict a "silver tsunami" of inventory from aging homeowners, experts note this inventory may not be located in areas where it is most needed.Affordability Concerns: High home prices coupled with fluctuating mortgage rates continue to pose affordability challenges for potential homebuyers.Resilient Homebuyers: Despite these challenges, many forecasts predict a resilient market with buyers adapting to market conditions.Impact of Policy and Economic Events: Political decisions, such as Trump's ...
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    23 mins
  • On the Implications of a Trump Presidency for Real Estate

    On the Implications of a Trump Presidency for Real Estate
    Dec 2 2024
    In this comprehensive discussion on the current real estate trends, the main focus is on cooling home prices and the impact of interest rates. The conversation suggests gradual easing in the growth of home prices due to factors such as increased interest rates and the addition of new homes in the market. This phenomenon is described as 'settlement shock', which marks a shift in the real estate industry. The effects of Trump's immigration policies on the construction industry is also explored, with emphasis on potential labor shortages.Key Themes:Shifting Market Dynamics: The real estate market is in a state of flux, characterized by rising interest rates, limited inventory, and evolving buyer preferences.Agent & Brokerage Challenges: Brokerages are facing record low profitability, prompting difficult conversations around value proposition and adaptation to agent needs. Legal scrutiny of industry practices, particularly post-NAR settlement, adds another layer of complexity.Focus on Affordability & Accessibility: Industry stakeholders are exploring solutions to address affordability concerns, including government initiatives and innovative home buying models like co-buying.Technology's Role: Technological advancements are reshaping agent marketing strategies, offering opportunities for greater efficiency and targeted reach.Important Ideas/Facts & Quotes:Market Trends:Home Price Appreciation Slowdown: While home prices continue to rise, the pace of appreciation has cooled. FHFA reports a 4.3% increase in Q3 2024, indicating a more balanced market.Mortgage Rate Volatility: Mortgage rates remain above 7%, impacting affordability and buyer sentiment. Experts predict potential drops in 2025 if inflation slows, but caution that economic uncertainty could lead to further increases.“Mortgage rates are not expected to drift much lower in December than where they are today...Despite short-term headwinds putting upward pressure on mortgage rates, we still anticipate a downward trend toward in 2025 if the labor market continues to soften and inflation slows, despite some expected volatility along the way.” - Will Interest Rates Go Down in December? | Predictions 2024New Home Sales Decline: October saw a significant drop in new home sales, attributed to affordability challenges and buyer hesitancy.Increased Demand for Smaller Homes: Shifting demographics and affordability concerns are driving increased interest in smaller, more efficient homes."Less than 20% of our family formation are two parents that are married with kids," Snodgrass said, yet Houston developers are "still building 70% or 80% of our homes for that household formation." In many cases, he added, smaller households "would actually much rather buy a smaller home.” - Why buyers are gravitating toward smaller homesIndustry Challenges:Brokerage Profitability Crisis: Low profitability is forcing brokerages to re-evaluate their value proposition and find innovative ways to support agents."brokerage companies are um at their lowest level of profitability ever the word broke is the first part of brokerage just for everybody to get that you talk about it privately we talk about it publicly..." - Industry Challenges in the Next 36 MonthsNAR Settlement Aftermath: The finalized NAR settlement, while bringing some closure, marks the beginning of increased legal scrutiny of industry practices."NextHome CEO James Dwiggins on NAR settlement aftermath: ‘We’re in the first inning’" - In real estate news today: Trump, Musk, and the housing market’s futureAgent Mobility Decline: A decline in agent mobility reflects the challenges of the current market, with agents potentially choosing stability amidst uncertainty.Ethical Concerns & Legal Risks: Concerns around dual agency, unrepresented buyers, and other practices highlight the importance of ethical conduct and understanding evolving legal landscapes."But he also acknowledges that there have been issues, both pre- and post-settlement, with dual agency and unrepresented buyers. Some of those issues are garnering more attention as judges, lawyers and consumer advocates scrutinize the new practices." - Beyond the Numbers: How ‘Settlement Shock’ Is Evolving to Reveal New Opportunities — RISMediaOpportunities:Co-Buying as an Affordability Solution: Co-buying offers a potential solution to affordability challenges, enabling buyers to pool resources and enter the market.“Buying a house with a friend or multiple friends might be a great way for you to achieve homeownership, but it’s not a decision you should make lightly...Before diving in, make sure you understand the financial and logistical hurdles you’ll face, as well as the human and emotional elements that might affect the purchase or, more importantly, your relationship.”- How Co-Buying a Home Helps with Affordability Today | Keeping Current MattersGovernment Initiatives to Improve Housing Access: FHFA is implementing plans to increase access ...
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    15 mins
  • Agent Value Debate: Is It More About the Agent or the Market?

    Agent Value Debate: Is It More About the Agent or the Market?
    Nov 25 2024
    This podcast episode explores a lively debate about agent value in the real estate market. The hosts distil a survey which showed 76% of sellers feel agents earn their commissions. However, similarities in success rates across agents have sparked discussions about whether it's the agent or market dynamics at play. The contentious Homie lawsuit accusing National Association of Realtors of manipulating the system to maintain high commissions is also discussed with interesting insights.Key Themes:Housing Affordability: High mortgage rates and home prices continue to plague affordability, particularly impacting first-time buyers. Policy changes and market adjustments are crucial for improvement.Regulatory Landscape: The incoming Trump administration and ongoing legal battles concerning NAR are poised to significantly impact the real estate industry's regulatory environment.Climate Risk: Growing awareness of climate risks is influencing homebuyer preferences, potentially impacting property values in high-risk areas.Technology & Innovation: New digital tools are emerging to empower both homebuyers and real estate professionals, enhancing transparency and efficiency in the market.Important Ideas & Facts:Housing Market Dynamics:Existing-Home Sales: Sales surged in October, marking the first annual gain since July 2021, reaching a pace of 3.96 million. (NAR: Existing-home sales post first yearly gain since July 2021)Home Prices: Median existing-home price rose 4% year-over-year in October, the 16th consecutive month of increases. (NAR: Existing-home sales post first yearly gain since July 2021)Inventory: Unsold homes increased to 1.37 million, representing a 4.2-month supply, up 19.1% year-over-year. (NAR: Existing-home sales post first yearly gain since July 2021)Mortgage Rates: Rates remain high post-election, impacting both existing and new home sales. (Post-election, mortgage rates remain high)Rent Growth: Single-family rent growth slowed to a four-year low, though variations exist across regions and price tiers. (CoreLogic: Single-family rent growth drops to four-year low point)Policy & Regulation:Trump Administration: Expected to bring "profound" changes to the housing market, potentially impacting conforming loan limits and GSE influence. (Mortgage servicing execs expect ‘profound’ changes under Trump)NAR Lawsuits: DOJ raised concerns over the NAR settlement's potential antitrust implications, particularly regarding buyer agent agreements. (DOJ’s Sunday filing raises issues with NAR deal)MLS Access: Phoenix Realtors launched a program offering MLS access without mandatory Realtor association membership. (Phoenix association offers MLS access without Realtor membership)Mortgage Trigger Leads: Proposed legislation seeks to limit the sale and use of mortgage trigger leads, potentially impacting lead generation practices. (Credit bureaus will push to scale back mortgage trigger leads bill)Climate & Homebuying:Climate Risk: Home values are rising faster in areas with lower climate risks, suggesting buyer awareness and potential future shifts in market dynamics. (Home values now rising faster in areas with lower climate risks)Technology & Innovation:Digital Tools: Zillow launched "BuyAbility," a tool providing real-time affordability estimates and loan pre-qualification odds. (Tech Bytes: Zillow launches new tool to help homebuyers)Open House Technology: New solutions streamline open house sign-in processes for real estate professionals. (Digital Open House Sign-in Solutions Agents Swear By)Additional Insights:FHA proposed changes to offer greater flexibility for borrowers renting out rooms in their homes. (FHA wants added flexibilities for borrowers renting out a bedroom)Industry professionals highlight the importance of addressing restrictive zoning regulations to alleviate housing supply shortages. (The US needs more housing — and agents are key advocates)Growing emphasis on designing homes to accommodate aging in place to meet the needs of an aging population. (This doctor says homes must accommodate aging in place)Reverse mortgage market outlook and investor perspectives, highlighting potential impacts of HMBS 2.0 and the incoming administration. (Investor interest in reverse mortgages in 2025)Quotes:Mark Milam, President of Highland Mortgage: "No lender in the United States has been able to operate with any kind of reasonable margin for almost 3 years. Yet, the GSEs have increased theirs to our country’s detriment." (An open letter to President-Elect Trump: A housing market in crisis)Elijah de la Campa, Redfin Senior Economist: "The fact that this is happening across risk types — and thus, across the country — is some of the best evidence we have that climate change is impacting people's homebuying decisions." (Home values now rising faster in areas with lower climate risks)Phoenix Realtors on MLS Choice program: "Phoenix Realtors is simply 'giving people greater choice' in what had ...
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    15 mins
  • Could Zero Down Payment Be the Future?

    Could Zero Down Payment Be the Future?
    Nov 18 2024
    In this engaging real estate discussion, the hosts share insights into foreclosure trends, mortgage rates and the state of the housing market. They explore proposed mortgage policies that could impact first-time buyers and discuss unique challenges presented by shifting demographics and aging homeowners. With technology like Better.com's new refi product and AI for value assessments disrupting traditional methods, they explore ways this could streamline processes.Themes:Inventory and Affordability: A significant theme across articles is the ongoing struggle with housing inventory and affordability, particularly for first-time buyers.Mortgage Rates and Inflation: The impact of fluctuating mortgage rates and inflation on the housing market is a recurring topic.Policy and Regulation: Several articles discuss policy changes and regulatory initiatives aimed at addressing housing challenges.Technology and Innovation: The role of technology in the real estate industry, particularly AVMs and digital tools, is explored.Demographic Shifts: The impact of demographic shifts, such as an aging population and growing diversity, on housing needs is highlighted.Key Insights and Facts:Inventory and Affordability:Housing inventory is increasing, offering more options for buyers but remains a concern, especially in high-demand markets. ("More Homes, Slower Price Growth – What It Means for You as a Buyer", KCM).Rising housing costs continue to create affordability challenges, potentially leading to a divided America where only a few can build wealth through homeownership. ("NAR Economists Offer Dire Warnings About Inventory, Rates", HousingWire).The Lifetime ISA, a government program to support first-time buyers, is becoming less effective due to its unchanged price limit of £450,000. ("House Price Growth ‘Shutting’ First-Time Buyers Out of Lifetime ISA Benefits", Estate Agent Today).The Black homeownership rate continues to face a challenging environment due to historical and systemic inequities. ("NAREB: Black Homeownership Faces A 'Troubling Environment'", HousingWire).Mortgage Rates and Inflation:Mortgage rates are on the rise, reaching their highest point since July 2024, impacting affordability and refinance activity. ("MBA: Mortgage Applications Rise Slightly, Reversing a Recent Trend", HousingWire).Despite recent Fed rate cuts, mortgage rates are expected to remain elevated due to factors like increasing treasury yields and inflation concerns. ("Instant Reaction: Mortgage Rates, November 14, 2024", NAR).Inflation is normalizing, but housing costs remain a key driver, with rent increases outpacing the decline in energy prices. ("Instant Reaction: Inflation, November 13, 2024", NAR).Policy and Regulation:States are taking proactive steps to increase housing supply, particularly through ADUs, by easing restrictions and streamlining permitting processes. ("States are Making ADUs Easier to Build. Now It’s Up To Municipalities to Follow Suit", HousingWire).The NYC council's decision to eliminate broker rental fees aims to improve housing affordability for renters. ("NYC Council Kills Broker Rental Fee", HousingWire).The potential impact of a Trump presidency on housing regulation is a subject of speculation, with some predicting a move toward deregulation to encourage construction. ("NAR economists offer dire warnings about inventory, rates", HousingWire)Technology and Innovation:AVMs (Automated Valuation Models) are gaining traction in home equity lending, offering lenders a faster and more cost-effective way to assess property values. ("How AVMs Can Power Property Valuations for Home Equity Lending", HousingWire).Digital property reports and desktop appraisals are complementing AVMs to provide a more comprehensive picture of property conditions. ("How AVMs Can Power Property Valuations for Home Equity Lending", HousingWire).Real estate agents are increasingly leveraging social media to build their online presence and connect with potential clients. ("Maximizing Your Online Presence: Tips for Real Estate Agents on Social Media", Residential Realty Today).Demographic Shifts:South Carolina's aging population ("gray tsunami") presents challenges and opportunities for local resources, highlighting the need for planning and infrastructure development. ("South Carolina Faces a 'Gray Tsunami' That Will Test Local Resources", HousingWire).The homeownership gap between renters and homeowners in terms of net worth is significant, highlighting the importance of homeownership as a wealth-building tool. ("The Big Difference Between Renter and Homeowner Net Worth", KCM).Quotes:Lawrence Yun, Chief Economist for NAR: “Consumer price inflation notched up to 2.6% in October from a year ago. Though an acceleration from 2.4% in September, the overall trend is towards stabilizing prices and away from the shock of the 10% killer inflation seen two years ago." ("Instant Reaction: Inflation, November 13, 2024", NAR).Dan Coatsworth, ...
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    19 mins
  • Rising Affordability Issues in the Housing Market

    Rising Affordability Issues in the Housing Market
    Nov 11 2024
    In this episode of the WiRE podcast, the hosts discuss various trending issues impacting the real estate industry including housing affordability, mortgage rates, and changing buyer demographics. The discussion throws light on how the median age of buyers is increasing, leading to a shift in buyer preferences and demands. The recurrent theme through the discussion is the need for industry agents to be proactive and informed to succeed in the constantly evolving marketplace.Housing Market TrendsHome price growth is slowing but remains widespread: While home prices are still rising in 87% of metro areas, the pace of growth is decelerating. (Source: "Home prices are rising in 87% of metro areas, but growth is slowing").Inventory remains tight: The inventory of homes for sale dropped noticeably during election week, falling from 735,718 to 721,576. Inventory growth struggles to keep pace with demand. (Source: "Housing inventory drops noticeably on election week").Aging in place further constricts supply: More Americans opting to stay in their homes longer exacerbates existing inventory challenges. (Source: "Housing supply will be impacted as more Americans age in place").Rentership growth outpaces homeownership: Rising home prices relative to renting costs are driving continued growth in the renter pool. Multifamily construction, while currently slowing, has helped address demand in certain regions. (Source: "Surging home prices lead more Americans to stay in the renter pool").Mortgage Market DynamicsMortgage rates remain volatile: Despite the Fed cutting rates again, mortgage rates continue to fluctuate, recently reaching a multi-month high. The average 30-year fixed-rate mortgage is now at 6.79%, impacting affordability. (Source: "Fed action not enough to keep mortgage rates from surging").Mortgage demand declines: Higher mortgage rates have resulted in a sixth consecutive week of declining mortgage applications. Purchase activity has fallen to its lowest level since mid-August, and refinance activity is at its lowest point since May. (Source: "Mortgage demand has fallen 41% since Fed's 50 bps cut").Delinquency rates decrease slightly but remain elevated year-over-year: The seasonally adjusted delinquency rate dropped slightly in the third quarter, but remains higher compared to the same period last year. (Source: "Mortgage delinquencies decrease from second-quarter 2024: MBA").Competition intensifies in the mortgage space: Lenders like Rocket Mortgage and UWM are rolling out pricing incentives and new products to attract brokers and borrowers in a challenging market. (Source: "In a sluggish market, Rocket Mortgage courts brokers with pricing incentive", "UWM delivers highest volume in three years amid mini refi boom").Industry Insights and ChallengesLeadership deficit in the mortgage industry: Concerns arise about promoting top producers into management roles without adequate leadership training, leading to potential leadership gaps. (Source: "Ginger Bell and Fobby Naghmi on leadership deficits in mortgage").NAR highlights record low first-time homebuyer share: The share of first-time homebuyers hit a historic low, underscoring the affordability challenges they face. (Source: "NAR Finds First-Time Homebuyers at Historic Low — RISMedia").Focus on leveraging micro-market shifts: Real estate professionals are advised to capitalize on localized market changes and educate clients on the potential impact of future interest rate drops to drive urgency and capitalize on opportunities. (Source: "How Realtors can leverage micro-market shifts to drive urgency and capitalize on opportunities in a challenging market").Importance of mentorship for new loan officers: High failure rates among new LOs emphasize the crucial role of mentorship and self-education for success in the industry. (Source: "New LO survival 101").Growing interest in reverse mortgages: Guild Mortgage reports increased interest in reverse mortgages, highlighting their potential to serve an aging population and tap into home equity. (Source: "Terry Schmidt says Guild is seeing more interest in reverse mortgages").Potential Policy ImpactsTrump's trade policies create uncertainty for homebuilders: The return of tariffs could result in price increases for building materials, adding pressure to the already strained housing market. (Source: "Trump tariffs would result in homebuilder price increases").Potential impact of GOP-controlled government on retirement and housing policies: The shift in political landscape raises questions about potential policy changes affecting retirement plans and housing affordability. (Source: "How will a GOP-controlled government impact retirement policy?", "Will Trump, Project 2025 gut HUD?").Predictions and OutlookNAR forecasts a rebound in existing-home sales in 2025: The National Association of Realtors predicts an improved outlook for home buyers in 2025, with sales projected to reach 4.71 million. (Source: "NAR ...
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    20 mins
  • Unraveling the Complexities of Real Estate Commissions

    Unraveling the Complexities of Real Estate Commissions
    Nov 4 2024
    In a discussion about the National Association of Realtor's recent commission settlement, law professor Tanya Monastier criticizes the implementation for creating confusion not clarity. More paperwork and legal fees, she argues, do not justify the results for consumers. Despite the changes, the hosts highlight how agents are adapting with new fee structures and focusing efforts towards niches or specific listings.Holmes.com is shaking up the real estate industry, leading a head-to-head battle with Zillow and realtor.com, as they aim to increase transparency and regain agent control over their listings and leads. By centering the listing agent and dropping third-party lead generation and referral fees, Holmes.com is betting on a more direct approach, catering for buyers and sellers who selectively prefer to work directly with the listing agent.Despite rising mortgage rates, home prices remain steady, with Zillow and the S & P Case Shiller index revealing similar trends. Job market improvements such as wage growth due to low unemployment are suggested as a contributing factor, as buyers have more purchase power. The discussion also covers the topic of modular homes, regarded as a possible solution to the affordability crisis, with the pros and cons of this new housing model explored.Source 1: Excerpts from "10,000 REALTORS® Set to “Bring on Business” at NAR NXT in Boston Next Week — RISMedia"Industry Acquisitions & Technology: Highlights notable acquisitions by Howard Hanna Real Estate Services and the selection of eight tech companies for the 2025 REACH Canada program by Second Century Ventures.Mortgage & Financial Landscape: Covers a lawsuit filed by the Department of Justice against Rocket Mortgage and reports on Q3 earnings from government-sponsored enterprises.Agent Performance & Market Trends: Examines RE/MAX’s domestic agent count and revenue fluctuations, emphasizing productivity. It also promotes the November issue of Real Estate Magazine, focusing on navigating “bad internet.”Source 2: Excerpts from "A year after Sitzer/Burnett, are the biggest impacts yet to come?"The Sitzer/Burnett Verdict and its Ripple Effects: Recaps the landmark Sitzer/Burnett case, its rapid impact on the real estate industry, and the ensuing wave of copycat lawsuits and settlements exceeding $1 billion.The Evolving Role of the MLS: Analyzes the removal of commissions from the MLS, its impact on the MLS's value, and potential future scenarios like private acquisitions of MLS organizations.Industry Adaptation and Future Outlook: Explores the industry's response to the verdict, highlighting the need for adaptation and a consumer-centric approach. It also predicts future litigation and the eventual emergence of a "new normal" in real estate.Source 3: Excerpts from "August 2024 S&P Case-Shiller Price Index: Home Price Growth Continues to Stall - Zillow Research"Analysis of the S&P CoreLogic Case-Shiller Index: Details the slowing annual home price appreciation in August 2024 and the stabilizing monthly appreciation attributed to a break in mortgage rates.Implications for Buyers and Sellers: Discusses the potential impact of affordability concerns on buyers and the continued expectation of record-high home equity for sellers, particularly in certain regions.Source 4: Excerpts from "Buyer Representation: What’s Changed, and What Hasn’t — RISMedia"Enduring Principles of Buyer Representation: Emphasizes the continued importance of buyer representation, understanding buyer needs, local market expertise, agent relationships, and building long-term client relationships.Promoting the ABR® Designation: Encourages agents to enhance their buyer representative skills by pursuing the Accredited Buyer’s Representative (ABR®) designation and staying current on industry developments.Source 5: Excerpts from "Can modular homes help solve the affordability problem?"The Growth of Modular Construction: Details the rise of the modular building industry, citing its increased value and growing acceptance.Modular Housing and the Affordability Crisis: Examines the potential of modular homes to address the housing affordability challenge, highlighting the industry's growth, its relatively small market share, and government incentives aimed at boosting production.Source 6: Excerpts from "CoStar scores a win, but Move has another play"Legal Battle Between CoStar and Move, Inc.: Reports on a federal judge's decision to dismiss two claims by Move, Inc. in their trade secrets lawsuit against CoStar, while allowing Move to amend its complaint.The Allegations of Trade Secrets Theft: Outlines the dispute centered on allegations that a former Realtor.com executive, now employed by CoStar, accessed sensitive files after leaving Move.Source 7: Excerpts from "Harvard Study Indicates Immigration Not Driving Housing Crisis — RISMedia"Debunking the Immigration Myth: Refutes the claim that immigration is a primary driver of rising home prices...
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    17 mins