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2022 is here and the first full week is ending. What a powerful first few days it has been for sure. After a record setting 2021 for mortgage purchase dollar volume of more than $1.6 TRILLION in closed purchased loans, is everyone ready for an even better 2022? It will be better for you the better your balance of purchase to refinance volume is.

I know many of you may not been aware at the record dollar volume for any number of reasons, but if you were a purchase focused originator, your dollar volume should have been the best it’s ever been! If it wasn’t, you really need to take stock and pay attention, you won’t have trillions of dollars in refinances to carry the load. The strategies on the purchase side require some effort and consistency, and it isn’t about calling realtors and setting coffee or lunch appointments. You need a real plan and strategies that work!

First and foremost, you will need to keep yourself informed about the REAL markets you live in and what national news impacts your community and what doesn’t. For example, a higher conforming loan limit means much more in some markets than in others. For other areas a change to the FEMA map can make a huge difference. You need to keep informed and know what information really impacts your community and your business so you can provide real options and opportunities for your clients and referral partners. We will go into this more in the coming weeks.

Today, you need to focus on information that could impact the rate markets. Today we have the jobless claims at 8:30am and tomorrow we have the Jobs Report for December. Following yesterdays FED minutes that really shook the market, there is a chance that one or both could be market movers!

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Yesterday was a bad day for bonds. A poor 7yr note auction pushed the UMBS 30 2.5% coupon down 36bps to a floor of support at 101.80, while the 10yr T rose 8bps to 1.55, which is just 5 bps below the current ceiling of resistance of 1.60.

I always get nervous when the markets move sharply right before a holiday weekend, and with this weekend bringing in the New Year, it bears watching closely. As I have maintained for a while now, if you like it, LOCK IT!

I am interested to see activity in the housing markets this weekend. With buyers still hungry for homes and the excuse of waiting to after the holidays are over now past, it will be very interesting to see the first few weeks of January go, especially if we see mortgage rates ticking up as well.

So be aware of the markets and especially for those who are already in a tight situation. Rising rates as well as higher home prices can change debt ratios very quickly. So be sure all of your preapproved borrowers understand how the payment they are qualified for can no longer support the same house they saw just a few weeks ago. It’s important that people understand how a mortgage payment is calculated and the impact of every item on the list that contributes to the total payment, not just the rate!

Have a safe and happy New Year! 2022 will be a huge opportunity for those purchased focused originators!

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Posted On Monday, 03 January 2022 00:00 Written by

“It is better to look ahead and prepare than to look back and regret.” 
www.inspirational-picture-quotes.com

Are you thinking about buying a home this year but not sure if this is a good time to do it? 

Let’s explore the trail map for real estate and mortgages in 2022.  

Ask yourself these questions to give you confidence and make your journey more enjoyable.

Questions to Answer:

How long do you plan to keep this property? 

  1. 1. (Will the property appreciate enough using conservative predictions to allow you to sell at a profit?) If you need to sell within the next two to three years, could you rent it for more than your house payment and maintenance costs?

    1. 2. Does the house payment fit comfortably enough into your budget to cover the mortgage payment and repairs on the home if you could not sell later and did not want to rent it out to anyone?

    2. 3. Do you have enough accessible savings or investments to make payments on the home for six months if you experienced an unexpected financial setback?

Choose an experienced, reputable realtor to help you determine the long-term appreciation in value on the house—not just over the last 2 years but look back several years to gauge the stability and growth of the neighborhood. Choose an experienced, reputable mortgage loan officer to help you explore the best mortgage options. Finally, consult with your financial advisor. 

Trail Map 

Let’s explore the trail map for real estate and mortgages in 2022.

Home Values

Forecasters predict that home values will continue to push upward around 7% to 8% for the year. If the predictions are correct, when you buy a home worth $300,000 today, a year from now, you may be looking at a gain in the value of around $24,000. That is a possible increase in wealth of about $2,000 per month.  

Home Inventory Levels

Lawrence Yun, the chief economist for the National Association of Realtors, predicted that inventory will increase in 2022 but not significantly in the following year.  

He predicts that the housing market will remain strong in the coming year. 

Builders will continue to struggle with supply lines and labor shortages. 

Mortgage Rates

Mortgage rates are predicted to go up as inflation rises. The Federal Reserve's actions will be key in determining how fast and how much rates rise. Historically mortgage rates go up as inflation rises and drop as inflation lessens.  

The Federal Reserve is currently tapering its aggressive purchases of mortgage bonds and treasuries. They plan to end the new purchases but may continue reinvesting about $70 billion per month from the profits on the bonds they currently have on the balance sheet. If the reinvestment continues, the rates should stay somewhere in the 3’s on the 30-year loan program. If inflation drops later in the year, the price on mortgage rates could fall again. 

The Federal Reserve plans to begin a series of rate increases throughout 2022 and 2023. Mortgage rates are not tied to the Federal Reserve Rates. Mortgage rates are expected to be influenced more by the inflation rate than other factors.

Rent Rates

The rise in rental rates vary from city to city. However, most predictions are that rental rates will continue to increase in 2022 by 5% to 10% for the year. Rising rental rates will continue to compel renters to gravitate toward buying a home.

Historically owning real estate with a fixed-rate mortgage has served as an excellent hedge of protection against the storms of inflation.  Owning your home creates multiple chances to profit when the value goes up, and the mortgage balance is paid down. Your home offers flexibility. You can rent it to tenants for income or borrow against it in an emergency. 

Which path to homeownership will you take?

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You know what I hear from everyone I coach?  Yup…you got it (and I bet you say it, too)!  This same script is in almost every session: 

• I want more time
• I want to get more organized
• I can’t get caught up
• My to-do list keeps growing and I am overwhelmed

Sometimes the overwhelm can be real; holidays, family events, a new influx of business – like Roseanne Roseannadanna used to say: “It’s always somethin’!” 

You can just about guarantee that some random last-minute hiccup will sabotage your perfect plan! I should know; with a name like “Murphy” it can happen a lot… and trust me, Murphy’s Law is always there if you allow it! So, here’s the scoop: 

You will never control time, events, happenings, last minute interruptions, catastrophes, blessings, etc. - You can however, control how you respond to them!

I can almost see you rolling your eyes about now, but take a deep breath and hear me out.  

In most cases, emergencies belong to someone ELSE!  Your family, dog, friend, co-worker, boss, etc.  Some are legitimate: The water heater that sprung a leak during the week you had guests, or the refrigerator that stopped working right in the middle of a family reunion.  

Unexpected glitches like that almost ALWAYS throw you off track, but those events don’t have to keep you off target for long!  Life if full of bumps and bruises, but when you lay a solid foundation of non-negotiables, you can rest assured that you will get back on track with less stress and more productivity.

You may be interested to know that research suggests that in an eight-hour day, the average worker is only productive for two hours and 53 minutes! That's right--you're probably only productive for around three hours a day.* 

The trick is to be PRODUCTIVE every day and to have a plan in place to consistently accomplish the action steps that move you closer to achieving your goals. 

Enter the discipline of a process we use called “My Planned Week”, which is designed to create the unconscious “habit” of activities that are consistent and blocked every day on your calendar.  Before you throw up the objections, think about this.

Every day you wake up and follow the same basic routine- get up, bathroom, coffee, shower, dress, etc. The sequence of showering before or after breakfast, when you brush your teeth, etc. are examples of how your “routine” rolls out, and you follow this pattern almost religiously!

What if that same type of routine was blocked differently for a few minutes each day?

Just like an appointment for your hairdresser, doctor, dentist, etc. – you BLOCK the time – even if it is only 15 minutes at a time – to get that ONE THING DONE. The movement, even ever so tiny, will give results.  For example:

• 15 minutes of quiet time each morning to get yourself ready for the day.  Got kids? Get up a tad earlier and get that quiet time all to yourself!

• Walking the dog? Listen to books on tape, a Ted Talk, or even a funny or informative podcast.

• Need to work out? Walk with  friend so you have an accountability partner.  

• Can’t find the time to send birthday cards or thank you notes but riddled with guilt when you neglect opportunities to express your gratitude?  Hire a retired person with lovely penmanship to send them for you. It doesn’t matter if you physically write them out or not. It’s not important who physically sends the cards, but that the acknowledgement is received!   As my coach says, “Everything works…doing nothing doesn’t.” Stop being disappointed and start feeling productive! When you recognize the value of others, you get love and often reciprocity in return, and it feels GREAT (even if you weren’t the person who addressed and stamped the envelopes)!  Your loving and positive impact goes beyond that one recipient as you change how they “feel” as they reach out to others in their lives.  Express yourself and all parties win!  

If you really only work 3 hours a day, then you spend the majority of your time “reacting” to every little emergency, request, or demand that appears URGENT, but not important!  Begin your day with intention…focusing on what YOU want to get out of this precious, newly unfolded day.  Some days will, of course, be impacted by something outside of yourself, but a well-planned out, established course of action items that have a defined space in your schedule will help to support your wants and needs daily. 

As tough as it might be, sit down and make a list of what you want to accomplish in your day, both personally and professionally.  If you are like many people, you feel you can do it ALL – but here’s where smart delegation comes in. 

Decide what you HAVE to do, WANT to do, and are WILLING to do and prioritize from there. You might get caught up in thinking EVERYTHING is a priority, but when based on your INTENTIONS and focus for how you want your life to look and feel, then it becomes a tad easier. 

Being busy is not the reward; productivity that results in PROFITABILITY is the higher goal.   Look for the opportunities to block your time to fit your personal outcomes.  It makes for less stress, increased productivity, more joy, and will result in more income to fund your life by design.

*According to the Bureau of Labor Statistics, the average American works 8.8 hours every day.

Posted On Wednesday, 29 December 2021 00:00 Written by
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