September is upon us, and Labor Day is behind us; the only thing to do this week and that is to CALL ALL YOUR ACCOUNTANTS! Remember when I shared with you that you were supposed to be collecting accountants from everyone you spoke with when you did your 9’s and 10’s questions? We also talked about connecting with accountants and tax preparers when we reviewed tax returns that our customers supplied to us. Well, now is one of the two times each year we MUST put those efforts to good use!
The first full week of September for most accountants usually is the signal for them to reach out to all their clients they filed tax extensions for. Since those filings are due in October, now is when they begin the process of collecting documents and preparing those returns! Why is this so important to us? Well, it’s time to reach out and remind those accountants that when they have those conversations it is critically important to ask the question: “Are you planning on buying or selling a house in the next two years?”
Think about it, these people tend to be either self employed or have multiple streams of income. With complicated lives and income streams, people can often overlook possible opportunities. What opportunities? Simply put, since they are filing in October for tax year 2022, they can also file again in February for 2023. This means that in less than six months, they will have TWO YEARS of documented income! Income that will either help or hurt that client’s ability to borrow mortgage money for that possible transaction!
This may not be important to many of those people, but for those people it does matter too, it matters a lot! Just putting yourself in position to make these calls and have these conversations with these accountants and potentially those clients, really can set you apart from your competition!
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About half of Gen Zers and millennials who don’t plan to buy a home in the near future say it’s because homes are too expensive
Nearly one of every five (18%) millennials and 12% of Gen Zers who replied to a recent housing survey believe they will never own a home, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Lack of affordability is the number-one barrier to homeownership for young Americans. Roughly half of Gen Z and millennial renters who believe they’re unlikely to purchase a home in the near future say the high price of homes on the market is blocking them from buying. That’s the most commonly cited barrier, and it’s followed by several other affordability-related reasons.
Nearly half (46%) of millennials and one-third (33%) of Gen Zers say their lack of ability to save for a down payment is a barrier, and more than one-third of both Gen Zers and millennials say mortgage rates are too high. Roughly one-third also say they’re unable to afford monthly mortgage payments. About one in five (21%) Gen Zers and 16% of millennials say they need to pay off their student loan debt before they’re able to buy a home.
That’s according to a Redfin-commissioned survey conducted by Qualtrics in May and June 2023. The survey was fielded to 5,079 U.S. residents who either moved in the last year, plan to move in the next year, or rent their home. This report focuses on the 1,340 Gen Z (aged 18 to 26) and 1,973 millennial (aged 27 to 42) respondents.
“The worsening housing affordability crisis has an outsized impact on Gen Zers and millennials because they’re much less likely to own a home than older generations,” said Redfin Chief Economist Daryl Fairweather. “That means many young Americans don’t benefit from rising home prices by gaining equity. Instead, these would-be first-time homebuyers bear the burden of high prices, high down payments and high monthly mortgage payments, without profits from a previous home to offset the cost. Many young people don’t have a choice between renting and buying. They’re renting their home because even though rent payments have increased, too, it’s still more affordable than buying in much of the country–and renters don’t need a down payment.”
It has become much harder to afford a home since the pandemic began, especially for first-time homebuyers. Median home-sale prices are at record highs, up 40% since 2019. Wages have risen, too, but not as much: Average hourly earnings rose roughly 20% over the same period. Record-low mortgage rates and the increasing prevalence of remote work during 2020 and 2021 fueled intense homebuying demand, which drove prices up. Now, rising mortgage rates have exacerbated the expense of owning a home. Mortgage rates have more than doubled from their low, hitting their highest level in more than 20 years in August, while home prices remain high.
Roughly one-quarter (26%) of Gen Z adults and half (52%) of millennials own their home, compared to 71% of Gen Xers and 79% of baby boomers.
Roughly 40% of Gen Zers and millennials are working second jobs to save for their down payment, and about one-quarter plan to use a cash gift from family
Of the young Americans who are planning to buy a home in the next year, many are turning to side hustles for their down payment. About two of every five Gen Zers (41%) and millennials (36%) say they’ll work a second job to help fund their down payment, the most commonly cited method aside from saving directly from paychecks.
Roughly one-quarter of Gen Z (28%) and millennial (23%) homebuyers expect to receive a cash gift from family for their down payment, while 20% of Gen Zers and 15% of millennials plan to use an inheritance.
Young Americans also cite investments as a way they’ll fund down payments. Just over 20% of both Gen Zers and millennials plan to sell stock, and roughly 15% of both generations plan to sell cryptocurrency.
To view the full report, including charts and more details on the survey, please visit:
https://www.redfin.com/news/gen-z-millennial-affordability-barrier-to-homeownership
Thursday we got the new jobless claims and continuing claims numbers, and Friday we got the BLS Jobs Report for the month of August. The initial jobless claims and continuing claims number are always important, but they will serve to lay the foundation of the BLS Jobs Report that can really move the markets.
For the past several FED meetings, the governors have pointed to the steady decline in initial claims and the growth of jobs in the market to show that the economy is still too robust to stop raising interest rates. Despite the fact that the BLS just released an important report stating that from April of 2022 to March of 2023, they have overstated the number of jobs by more than 300,000 jobs! That’s not a small number. In fact, when put into real terms, that is a miss of more than 9% on a monthly basis. When you add into the numbers that ADP numbers have been wildly out of touch with reality to the point that people are now almost completely ignoring them, it makes you wonder that with all the actual technology we have at our disposal, how are these “season adjustments” “phone surveys” and the “birth/death model” need to be looked into and either improved or replaced. NOBODY but the FED really believes the numbers!
Please watch the reports today and on Friday. They both can move the markets, but if the BLS numbers show a weaking in the job market and softer wage pressure, we could see big improvements in the bond market. Strong numbers and we could see rates go higher quickly as it will give the FED ammunition for yet more rate hikes!
On the brighter side, purchase activity is strong despite 7% rates as many are understanding its about the Monthly VALUE of the payment, and not the rate! We also need to focus on our accountant list so we cam make our calls next week and start connecting with those filing those tax returns for the clients who have extensions! It will be a busy few days before an opportunity packed Labor Day weekend!
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Redfin reports that investor market share is down to 16% after hitting an all-time high of 20% in the first quarter of 2022
Investor home purchases fell 45% from a year earlier in the second quarter, outpacing the 31% drop in overall home sales, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s the biggest decline since 2008 with the exception of the quarter before, when they dropped 48%. The decline comes as this year’s relatively cool housing and rental markets makes investing in homes less attractive than it was during the pandemic-driven homebuying frenzy of 2021 and early 2022.
The drop in purchases has brought the total number of homes bought by investors below pre-pandemic levels. Real estate investors bought roughly 50,000 homes in the second quarter, the fewest of any second quarter in seven years, with the exception of the start of the pandemic. The data in this report is from 39 of the most populous U.S. metro areas.
This marks a retreat from a boom in investor activity during the pandemic, which was driven by record-low mortgage rates and huge homebuying and rental demand, creating opportunities for investors to make a lot of money.
“Offers from hedge funds have dried up; I haven’t received an offer from one in a long time, except unrealistically low offers,” said Las Vegas Redfin Premier agent Shay Stein. “From mid-2020 until early 2022 when interest rates started going up, hedge funds bought up a ton of properties and immediately turned them into rentals, pricing out local buyers. Now a big portion of our homes are owned by investors, but they’re not adding to their portfolios.”
Investor purchases declined 65% year over year in Las Vegas, Jacksonville, FL and Phoenix, the biggest drops of the metros in this analysis. Investors are pulling back quickly from the Sun Belt and Florida largely because those places had an even bigger boom in homebuying demand than the rest of the country in 2021 and early 2022, and now they’re cooling fast.
In dollar terms, the drop in investor purchases is almost as big. Investors bought a total of $36.4 billion worth of homes in the second quarter, down 42% from a year earlier. That’s still above pre-pandemic levels, but dropping closer to it: Investors bought a total of $34 billion in the second quarter of 2018, and a total of $31.9 billion in the second quarter of 2019.
In terms of market share, investors bought 15.6% of homes that were sold in the U.S. during the second quarter, down from 19.7% a year earlier and a record high of 20.4% in the beginning of 2022.
Limited inventory, limited demand deter investors even more than individual buyers
The outsized drop in purchases by investors helps explain why their market share is coming down: Investors backed off from the housing market faster than individual homebuyers in the second quarter.
Stubbornly high home prices and mortgage rates, limited inventory and widespread economic uncertainty have dampened housing demand and suppressed overall home sales. Those factors are an even bigger deterrent for investors, because they’re in it purely for the potential to make money by flipping homes or renting them out. When housing demand is down, investors are less motivated.
Additionally, investors themselves were deterred by high home prices and high interest rates. Roughly 7 of every 10 (71%) investor purchases were made in cash in the second quarter–down from 75% a year earlier—but they’re still impacted by high interest rates because they often use other types of loans to cover expenses.
“Moving forward, the investors who do come back may be more focused on scooping up rental properties than flipping homes,” said Redfin Senior Economist Sheharyar Bokhari. “All signs point to the rental market remaining relatively strong. Home prices and mortgage rates are high enough to motivate would-be first-time homebuyers to continue renting. The typical U.S. asking rent remains quite high, just $16 shy of its all-time high, so investors who are landlords stand to earn money. Investor purchases of rental properties could be limited by some of them building new properties to rent out, though.”
“Home flippers may be slower to come back,” Bokhari continued. “That’s mainly because mortgage rates are unlikely to decline significantly in the short term, which will keep homebuying demand relatively low and discourage flippers. Plus, investors have lower-risk places to park their money right now than real estate, with high yields in the bond market.”
Even if investors’ market share does pick back up, their purchase volume is likely to remain low. Like other buyers, they’re limited by a severe lack of listings, with homeowners locked in by relatively low mortgage rates.
Investors’ share of new listings is falling–but those who are selling are seeing big gains
Homes owned by investors are making up a smaller share of new listings on the market. Investors owned 8% of new listings in March, down slightly from 9% a year earlier and down from a peak of 13% at the end of 2021. Investors listed 36% fewer homes than a year earlier, compared with a 24% drop in overall new listings. March is the most recent month for which this data is available.
Most investors who are still flipping homes are making money. The typical home flipper who sold a home in June sold for 61% ($188,448) more than their initial purchase price. Though that’s a substantial gain, it’s down from a 69% ($199,946) premium a year earlier. “Flipper” refers to an investor who sold a home within nine months of buying it.
Just 3% of homes sold by flippers sold at a loss in June, down from a peak of 29% in September 2022 and roughly on par with 4% a year earlier.
Investors most commonly buy low-priced homes
Investors bought 23% of low-priced homes that sold in the second quarter, down from 25% a year earlier but still much higher than investors’ market share for more expensive homes. They bought 11% of mid-priced homes, down from 19% a year earlier, and 14% of high-priced homes, down from 16% a year earlier.
Investors are attracted to low-priced homes for the same reason as other homebuyers: They cost less, which is especially attractive when home prices and interest and mortgage rates remain elevated. Investors who are buying homes to flip and re-sell are doing so in hopes that they can buy low and sell higher. Small homes—those with 1,400 square feet or less—made up 39.2% of investor purchases in the second quarter, the highest share of any second quarter on record and down just slightly from the record high of 40.6% in the first quarter of 2023.
In that same vein, low-priced homes make up a substantial piece of investors’ homebuying pie. Low-priced homes made up 46% of investor purchases in the second quarter, up from 39% a year earlier. High-priced homes made up 31% of investor purchases, up from 29% a year earlier.
Single-family homes represent nearly 7 in 10 investor purchases
Single-family homes made up 68% of investor purchases in the second quarter. That’s down from 73% a year earlier, but still the lion’s share of purchases by real estate investors. The decline is partly due to a lack of single-family homes for sale.
Next come condos, which made up 20% of investor purchases, up from 16% a year earlier and the highest share since 2018. Townhouses made up 7% of purchases, followed by multi-family properties, which accounted for 5%.
But in terms of market share, investors have the highest when it comes to multi-family properties. Real estate investors purchased 31% of multi-family properties that sold in the second quarter, just shy of 32% a year earlier. Investors make up a relatively high share of multi-family purchases because those buildings are typically expensive and used as rental properties.
Investors purchased 15% of single-family homes, down from 20% a year earlier. Investors bought roughly one out of every six condos and townhouses that sold, on par with last year.
To view the full report, including charts, methodology and metro-level data, please visit: https://www.redfin.com/news/investor-home-purchases-drop-Q2-2023
Pending home sales increased 0.9% in July – rising for the second consecutive month – according to the National Association of Realtors®. The Northeast and Midwest posted monthly losses, while sales in the South and West grew. All four U.S. regions saw year-over-year declines in transactions.
The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – rose 0.9% to 77.6 in July. Year over year, pending transactions fell by 14.0%. An index of 100 is equal to the level of contract activity in 2001.
“The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers,” said NAR Chief Economist Lawrence Yun. “Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.”
Pending Home Sales Regional Breakdown
The Northeast PHSI shrank 5.8% from last month to 63.2, a decrease of 20.2% from July 2022. The Midwest index fell 0.4% to 77.5 in July, down 16.0% from one year ago.
The South PHSI lifted 2.0% to 95.3 in July, declining 10.9% from the prior year. The West index improved 6.2% in July to 61.3, dropping 12.8% from July 2022.
“Interestingly, the West region experienced a meaningful price decline in the past year and buyers are quickly returning as a result,” Yun added.
More than one-quarter (25.8%) of homebuyers are looking to move to a different part of the country, a record-high share and up from 23.7% a year ago. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. The portion of homebuyers looking to relocate has steadily risen since the pandemic began; the share stood at roughly 18% in 2018 and 2019.
While a record share of homebuyers are looking to relocate, the number is lower than it was a year ago as the frequency of homes changing hands drops to its lowest level in at least a decade amid the cool housing market. There are 7% fewer Redfin.com users looking to move away from their home metro than a year ago. That’s compared with a 17% decline for Redfin.com homebuyers staying in their hometown.
Myrtle Beach, SC has made it onto the list of most popular migration destinations for the first time on record. The South Carolina beach town is the 9th-most popular destination for relocating homebuyers, with people most commonly moving in from Washington, D.C. and New York.
Homebuyers are moving to Myrtle Beach for its relatively affordable homes and outdoorsy lifestyle, as is the case for most of the most popular migration destinations. People moving from pricey East Coast job hubs to Myrtle Beach can get much more house for their money. The typical home in the Myrtle Beach metro sells for about $360,000, compared with over $600,000 in Washington, D.C. and about $800,000 in New York.
“This area attracts a lot of retirees, particularly from the Northeast and the West Coast, because of its relatively inexpensive cost of living, low property taxes, golf courses and sunny weather,” said Myrtle Beach Redfin agent Monica Roman. “Since the start of the pandemic, I’ve also seen quite a few remote workers move in, drawn by our reasonably priced housing and year-round vacation lifestyle.”
Metros in the Sun Belt and Florida are the most popular migration destinations despite increasing risk of flooding, heat and hurricanes
Las Vegas tops the list of most popular destinations for Redfin.com users moving to a different metro area for the second month in a row. It’s followed by Sacramento and three Florida metros: Tampa, North Port-Sarasota and Cape Coral. Popularity is determined by net inflow, a measure of how many more Redfin.com users looked to move into an area than leave.
Relatively affordable metros with warm weather are typically the most popular destinations. Metro areas in the Sun Belt and Florida are perennially in the top 10 metros for relocating Redfin.com users. Housing affordability is an especially big draw as today’s elevated mortgage rates combine with stubbornly high home prices to push monthly mortgage payments near record highs.
Metros in the southern half of the U.S. are popular despite many of them facing increasing risk from climate change. For instance, Las Vegas faces severe heat risk, Tampa faces extreme flood risk and Myrtle Beach faces extreme risk of hurricanes and other severe wind events. People keep moving to those areas, though, largely because they’re typically relatively affordable. The median home price in Las Vegas is $415,000, compared to nearly $1 million in Los Angeles, the most common origin for homebuyers moving in. And the typical home costs $430,000 in Tampa, roughly half the cost of one in New York, where homebuyers most commonly come from.
It’s worth noting that there are fewer homebuyers moving into 8 of the 10 most popular destinations than there were a year ago as high mortgage rates cool the housing market.
|
Top 10 Metros Homebuyers Are Moving Into, by Net Inflow Net inflow = Number of Redfin.com home searchers looking to move into a metro area, minus the number of searchers looking to leave |
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|
Rank |
Metro* |
Net Inflow, July 2023 |
Net Inflow, July 2022 |
Top Origin |
Top Out-of-State Origin |
|
1 |
5,400 |
6,500 |
Los Angeles, CA |
Los Angeles, CA |
|
|
2 |
5,100 |
9,000 |
San Francisco, CA |
Chicago, IL |
|
|
3 |
4,600 |
1,300 |
New York, NY |
New York, NY |
|
|
4 (tie) |
4,400 |
7,800 |
New York, NY |
New York, NY |
|
|
4 (tie) |
4,400 |
5,500 |
New York, NY |
New York, NY |
|
|
6 |
3,800 |
5,600 |
Chicago, IL |
Chicago, IL |
|
|
7 (tie) |
3,700 |
5,500 |
Los Angeles, CA |
Los Angeles, CA |
|
|
7 (tie) |
3,700 |
6,600 |
Seattle, WA |
Seattle, WA |
|
|
9 |
3,600 |
3,000 |
Washington, D.C. |
Washington, D.C. |
|
|
10 |
3,400 |
3,700 |
New York, NY |
New York, NY |
|
|
*Combined statistical areas with at least 500 users searching to and from the region in May 2023-July 2023 |
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Homebuyers are leaving expensive coastal cities for more affordable places
Homebuyers are leaving San Francisco, New York and Los Angeles more than any other metro in the country. That’s based on net outflow, a measure of how many more Redfin.com users are looking to leave a metro than move in.
Pricey coastal job centers are typically among the metros homebuyers most commonly leave. That’s largely because buyers are often looking to relocate to places with more affordable housing, something that has become more feasible with the prevalence of remote work. It has also become more feasible to move to beachy vacation towns: Homebuyers leaving Washington, D.C. are most commonly moving to the Salisbury, MD metro and those leaving Boston are most commonly moving to the Portland, ME metro.
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Top 10 Metros Homebuyers Are Leaving, by Net Outflow Net outflow = Number of Redfin.com home searchers looking to leave a metro area, minus the number of searchers looking to move in |
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|
Rank |
Metro* |
Net Outflow, July 2023 |
Net Outflow, July 2022 |
Portion of Local Users Searching Elsewhere |
Top Destination |
Top Out-of-State Destination |
|
1 |
27,100 |
38,700 |
24% |
Sacramento, CA |
Seattle, WA |
|
|
2 |
24,500 |
25,200 |
29% |
Miami, FL |
Miami, FL |
|
|
3 |
20,800 |
32,700 |
19% |
Las Vegas, NV |
Las Vegas, NV |
|
|
4 |
15,100 |
18,600 |
19% |
Salisbury, MD |
Salisbury, MD |
|
|
5 |
5,200 |
2,300 |
17% |
Milwaukee, WI |
Milwaukee, WI |
|
|
6 |
4,600 |
9,900 |
21% |
Portland, ME |
Portland, ME |
|
|
7 |
3,400 |
600 |
79% |
Boston, MA |
Boston, MA |
|
|
8 |
3,100 |
12,500 |
19% |
Spokane, WA |
Phoenix, AZ |
|
|
9 (tie) |
2,100 |
4,500 |
35% |
Chicago, IL |
Chicago, IL |
|
|
9 (tie) |
2,100 |
5,000 |
26% |
Grand Rapids, MI |
Cape Coral, FL |
|
|
*Combined statistical areas with at least 500 users searching to and from the region in May 2023-July 2023 |
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To view the full report, including charts and methodology, please visit:
https://www.redfin.com/news/housing-migration-trends-july-2023
Have you ever observed a professional colleague, a friend, or a leader whom you admire, confidently facing uncertainty without any apparent fear? The phrase “fearless leader” must have emerged in our vocabulary for a good reason, don’t you think? Truth be told, those individuals aren’t fearless — no one is. What they have done is mastered the feeling of fear, which has unlocked their innate ability to see disruption and change as an opportunity more quickly.
As I have noted over the years of working with many clients around the world, one common thread that ties humans together in this world of rampant disruption and change is that we all find it unpleasant in many ways. Above all else, from executives down to entry-level employees, everyone finds disruption and change frightening in some fashion.
What fear can often do to us is cloud how empowering and full of opportunity disruption and change actually is, and while I teach many individuals about utilizing Hard Trend future certainties to pre-solve problems and make low-risk moves, there are just as many stuck on the feeling of fear.
Today, I want to show you how you can utilize that same Hard Trend Methodology implemented to anticipate disruption and change prior to it occurring, but also to overcome the feeling of fear by recognizing it as a fully predictable cycle!
This really puts the power in your hands — this knowledge that everyone within your industry and outside of it will experience this same disruption and change, with you seeing it coming and forming an Anticipatory action plan around it.
The Origins of Our Fear of Disruption and Change
What is the real reason behind us as a human race fearing disruption and change? The answer lies deep within the subconscious mind. Back when human beings were still hunters and gatherers, the fight-or-flight response was necessary to basic survival. From finding food, warding off predators, and finding shelter, everything was about survival.
While humans have certainly come a long way since these primitive times, the fight-or-flight response and our roots in survival are still solidly ingrained in our subconscious mind. This explains, in simple terms, why our first thought in relation to disruption and change is fear. A change in our professional or personal status quo represents to us, now in a more contemporary way, that our daily survival tactics may be threatened.
For instance, AI disrupting your career may trigger a fear that you will lose your job to said technology, resulting in loss of income and potentially the loss of your home, transportation, and so forth.
But with disruption and change comes the ability for us to create disruption and change in an offensive strategy. Adaptation and change are inherent strengths of humans, setting us apart from digital applications and other material forces. These abilities empower us in unique ways.
Worrying that AI will replace you in the workforce is akin to the concerns of people in the past who feared the impact of desktop computers and laptops. However, as history has shown, we have successfully adapted to those digital disruptions. Today, these technologies are indispensable in both our personal and professional lives, yet we remain resilient and continue to thrive even in their presence.
A Mastery of Cycles Helps Us Adapt
The reality of fearing disruption and change is that we can fully anticipate exactly how disruption and change feels to us as individuals. In lieu of this introspection, we can more quickly go through the common stages of fear and center ourselves so well, we will eventually be able to skip our fear entirely!
This is made possible by realizing that the stages of fear are a cycle, much like a biological cycle, product cycle, and even cycles in nature, such as the future certainty that the seasons will change every year. We have all experienced fear and anxiety, and the following four stages are exactly how that feeling works through our psyche in the face of disruption and change:
- Initial Shock
- Frustration
- Acceptance
- Mastery
Let’s look at them from a more pragmatic standpoint, where we start to see that the cycle of fear itself is a Hard Trend future certainty that we can anticipate and overcome. This removes fear as a roadblock and essentially clears the way for us to focus instead on leveraging the disruption and change in front of us.
Initial Shock is the first stage. This is where the fight-or-flight response comes into play and people fear where their business or work position is headed.
Then comes Frustration, the second stage of fear. Prior to any disruption, people are comfortable in their status quo. After disruption and change occur, those disrupted must learn new skills, which can be frustrating.
The third stage in the cycle of fear is Acceptance. At this stage, people know the disruption has arrived or they have begun to leverage it to their advantage, witnessing positive results.
Mastery of the disruption or change is the final stage in the cycle. At this point, everyone has fully accepted what has changed, learned all about it, and is likely starting to use it in their daily lives.
By acknowledging and understanding that these four stages of fear occur every time we face disruption or change, we can Anticipate the feeling of fear that comes with it and move past it to find the opportunity within the disruption.
Use the Excitement of Learning to Turn Disruption into an Opportunity
We as humans have a thirst for knowledge. Similar to fight or flight, our craving to always know more is a biological response. We develop biologically all throughout our lives, and as such, we crave new information. We want to know more. We want to know everything.
Overcoming fear and learning to process that sensation more quickly allows for more room in our emotional existence to soak up all the great opportunity that comes from an ever-evolving world instead of avoiding it or trying to ignore it.
Leverage this excitement for knowledge to learn more about disruption and change so you too can help it blossom into opportunity and advantage, both personally and professionally. In turn, you become the fearless leader that others look to emulate. Train yourself to embrace disruption and change as something positive, and before long, you will be the positive disruptor of your industry!
Discover the future of AI and its transformative potential! Visit www.aiStrategyReport.com now to download the comprehensive AI Strategy Report and stay ahead in this fast-evolving landscape. Empower yourself with valuable insights and make informed decisions to unlock new opportunities. Don’t miss out on this essential resource – take action today and embrace the AI revolution!
Borrowing from an epic line, the new revisions to the BLS Jobs numbers from April 2022 to March 2023 show an overstatement of jobs by more than 300,000 jobs! Reminds me of another classic line, “You had just ONE job to do…” Well, the year-old numbers they shared are already almost six months old. So now you know why the markets continue to be frustrated by the government agencies, The Federal Reserve Board Members, Treasury Secretary Janet Yellen, and even the President, when they continue to spout “facts” about the economy and jobs that clearly are either old, out of date, or just plain fabrications!
Remember just two short years ago when inflation was transitory? Remember when we were told that spending more than a TRILLION dollars on something called “the inflation reduction act” wasn’t going to add to inflation? Remember another two TRILLION dollars on something called “Build Back Better” that wasn’t going to cause inflation and create MILLIONS of new high paying jobs for those people in the coal and oil industries to help switch everyone over to green new energy? Remember…well, I can go on and on, but you get the picture.
Why is it people don’t think we can’t handle the truth? I was puzzled by what there could possibly be to gain by saying over and over things that were flat out lies? But it became clear to me, it isn’t us; it’s THEM! THEY CAN’T HANDLE THE TRUTH! Well, the market responded yesterday on this news and the 30yr MBS 5.5% coupon was better by 63bps! The 10-year treasury was down by 13bps. The second of these numbers is the real number to watch, because if it falls much further, we could see a dramatic fall in the yield as those who have recently shorted the 10 year, will be forced to cover their short positions and that could lead to a HUGE drop in yields! With more than 20% of that market being shorted, a short squeeze could be significant.
Much will depend on what Fed Chairman Jerome Powell says on Friday at Jackson Hole. If he signals a change in position and to stop raising rates; yesterday’s 63 bps could be just the tip of the iceberg! However, if he maintains his tightening bias, we may give it all back, at least for now! So, stay connected, it is important to follow!
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The typical home purchased in high-opportunity U.S. neighborhoods went for $470,000 last year—$130,000 more than the typical home in low-opportunity areas
The typical home that sold in a high-opportunity U.S. neighborhood in 2022 went for $470,000, 38.2% more than the typical home that sold in a low-opportunity neighborhood, which went for $340,000. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
The report is based on an analysis of home sales in 100 of the most populous U.S. metropolitan areas. Redfin sorted each neighborhood into one of three tiers—low opportunity, intermediate opportunity and high opportunity. A high-opportunity neighborhood is defined as one where children who grew up in low-earning households went on to become higher earning adults than the typical person who grew up in their metro at the same time.
People in high-opportunity neighborhoods are more likely than those in low-opportunity neighborhoods to live among highly rated schools, professional networking opportunities, large numbers of college graduates and low rates of poverty and crime. High-opportunity neighborhoods also have larger concentrations of two-parent households, along with high levels of income inequality and segregation—meaning they tend to skew wealthy and white. The methodology Redfin used to measure opportunity was developed by Harvard University researcher Raj Chetty.
“It’s prohibitively expensive for many families—particularly those of color—to access the neighborhoods that offer children the best shot at financial success,” said Redfin Deputy Chief Economist Taylor Marr. “Where you grow up lays the groundwork for your future. Kids raised in low-opportunity neighborhoods have a lower chance of getting a good education and well-paying job, growing a robust professional network, building wealth through home equity and staying out of harm’s way. That can perpetuate a cycle of segregation and wealth inequality that can last for generations, with their children and grandchildren often grappling with the same disadvantages.”
The price premium of high-opportunity neighborhoods has shrunk over time, but that’s not because these areas have become more affordable. It’s because many low-opportunity neighborhoods have gentrified and become less affordable.
High-Opportunity Neighborhoods Have More Homes for Sale, But Those Homes Are Less Affordable—Especially for Families of Color
The good news is the lion’s share (39.5%) of U.S. homes for sale are in high-opportunity neighborhoods. The bad news is high-opportunity neighborhoods are rarely affordable. Just 13% of homes for sale in high-opportunity neighborhoods last year were affordable on their metro area’s median income, compared with 31.7% in low-opportunity neighborhoods. Affordability has fallen across the board due to surging home prices; the median sale price in high-opportunity neighborhoods has grown 100% since 2012, while the median sale price in low-opportunity neighborhoods has jumped 174%.
White families have an easier time gaining access to these areas than many families of color. Just 4.2% of homes for sale in high-opportunity neighborhoods were affordable for the typical Black household in 2022. The share was nearly five times higher (19.1%) for the typical white household.
On average, just over one-third (35.2%) of residents in the high-opportunity neighborhoods Redfin analyzed are nonwhite, compared with nearly two-thirds (61.4%) in low-opportunity neighborhoods.
The Price Premium for Opportunity Is Highest in Segregated Midwestern and Southern Metros
In Detroit, the median home sale price in high-opportunity neighborhoods was $240,000 in 2022. That’s 269% higher than the $65,00 median sale price in Detroit’s low-opportunity neighborhoods—the largest premium of the metros Redfin analyzed. Next came Memphis, TN, where high-opportunity neighborhoods held a 187% premium. Rounding out the top five are Akron, OH (169%), Milwaukee (149%) and Birmingham, AL (143%).
Many of the metros where high-opportunity neighborhoods carry hefty home-price premiums grapple with relatively high levels of segregation. Milwaukee and Detroit both rank among the five most segregated metros based on 2020 Census data; Memphis and Birmingham are also near the top of the list.
New York was the only metro where it was less expensive (by 6.7%) to live in a high-opportunity neighborhood. The median sale price of high-opportunity neighborhoods in New York was $695,000, compared with $745,000 in low-opportunity neighborhoods.
In Detroit, High-Opportunity Neighborhoods Are Nearly Four Times More Expensive and Predominantly White
Detroit’s high-opportunity neighborhoods overlap with the metro’s predominantly white, suburban areas, while low-opportunity neighborhoods overlap with predominantly nonwhite parts of the urban core.
Plymouth, a city of about 10,000 located a short drive west of Detroit, is one example of a high-opportunity neighborhood in the Detroit metro area.
“Plymouth screams suburbia. It has a quaint little downtown, cute restaurants and coffee shops, highly-rated high schools and an ice-sculpture festival every winter,” said Kate McNeill, Redfin’s market manager in Detroit. “It stands in contrast to some neighborhoods closer to downtown, where there has been less development despite increasing home prices in recent years.”
McNeill continued: “Take Highland Park, a majority Black area that has seen its population decline by 24% in the past decade or so. Much of that is due to disinvestment and a lack of city services. When you walk around Highland Park, many homes have been boarded up and abandoned.”
Opportunities for Change: Provide Home-Search Assistance, Subsidize Affordable Housing and Reform Zoning Laws
While low-income families are often concentrated in low-opportunity neighborhoods, research has shown this is rarely a function of choice. Oftentimes, they end up in low-opportunity areas because there are barriers in the home-search process that prevent them from moving to a high-opportunity neighborhood. A 2020 study of housing-voucher recipients in Washington State found just that:
“Many families reported that they had limited time and resources to search for housing, as they were facing challenges such as domestic violence, mental health conditions, or holding multiple jobs while caring for children as single parents,” wrote the researchers, led by Columbia University’s Peter Bergman and Raj Chetty. “Redesigning affordable housing policies to provide customized assistance in housing search could reduce residential segregation and increase upward mobility substantially.”
In the study, low-income housing-voucher recipients in Washington’s King County (which includes Seattle) were offered services including customized rental search assistance, landlord engagement and short-term financial assistance. They could choose to use their housing voucher in any neighborhood within the housing authority’s jurisdiction. Of the families who received the aforementioned services, 53% chose to lease units in high-opportunity neighborhoods, compared with just 15% of families who did not receive the services.
These strategies used to help renters in Seattle could also be employed to help first-time buyers everywhere navigate the home-search process, Redfin’s Marr said.
”Local leaders should seek to remove barriers that prevent low-income families from moving into high-opportunity neighborhoods, while also investing in low-opportunity neighborhoods,” Marr said. “In addition to offering assistance during the home-search process, governments can invest more in public schools in low-opportunity neighborhoods, offer affordable housing subsidies and reform zoning laws to allow for more housing in high-opportunity neighborhoods.”
To view the full report, including charts, tables with metro-level data and methodology, please visit: https://www.redfin.com/news/home-price-premium-high-opportunity-neighborhoods
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Existing-home sales receded in July, according to the National Association of Realtors®. Among the four major U.S. regions, sales grew in the West but faded in the Northeast, Midwest and South. All four regions registered year-over-year sales declines.
Total existing-home sales[1] – completed transactions that include single-family homes, townhomes, condominiums and co-ops – waned 2.2% from June to a seasonally adjusted annual rate of 4.07 million in July. Year-over-year, sales slumped 16.6% (down from 4.88 million in July 2022).
“Two factors are driving current sales activity – inventory availability and mortgage rates,” said NAR Chief Economist Lawrence Yun. “Unfortunately, both have been unfavorable to buyers.”
Total housing inventory[2] registered at the end of July was 1.11 million units, up 3.7% from June but down 14.6% from one year ago (1.3 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in June and 3.2 months in July 2022.
The median existing-home price[3] for all housing types in July was $406,700, an increase of 1.9% from July 2022 ($399,000). Prices rose in the Northeast, Midwest and South but were unchanged in the West.
“Most homeowners continue to enjoy large wealth gains from recent years with little concern about home price declines,” Yun said. “However, many renters are concerned as they’re facing growing affordability challenges because of high interest rates.”
REALTORS® Confidence Index
According to the REALTORS® Confidence Index, properties typically remained on the market for 20 days in July, up from 18 days in June and 14 days in July 2022. Seventy-four percent of homes sold in July were on the market for less than a month.
First-time buyers were responsible for 30% of sales in July, up from 27% in June and 29% in July 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022[4] – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 26% of transactions in July, identical to June but up from 24% in July 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in July, down from 18% in June but up from 14% one year ago.
Distressed sales[5] – foreclosures and short sales – represented 1% of sales in July, virtually unchanged from last month and the previous year.
Mortgage Rates
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.09% as of August 17. That’s up from 6.96% the prior week and 5.13% one year ago.
“Retreating mortgage rates will bring more buyers and sellers to the market and get Americans moving again,” Yun said.
Single-family and Condo/Co-op Sales
Single-family home sales slid to a seasonally adjusted annual rate of 3.65 million in July, down 1.9% from 3.72 million in June and 16.3% from the previous year. The median existing single-family home price was $412,300 in July, up 1.6% from July 2022.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 420,000 units in July, down 4.5% from June and 19.2% from one year ago. The median existing condo price was $357,600 in July, up 4.5% from the previous year ($342,200).
Regional Breakdown
Existing-home sales in the Northeast descended 5.9% from June to an annual rate of 480,000 in July, down 23.8% from July 2022. The median price in the Northeast was $467,500, up 5.5% from one year ago.
In the Midwest, existing-home sales decreased by 3.0% from the prior month to an annual rate of 960,000 in July, dropping 20.0% from the previous year. The median price in the Midwest was $304,600, up 3.9% from July 2022.
Existing-home sales in the South retracted 2.6% from June to an annual rate of 1.86 million in July, a decrease of 14.3% from one year ago. The median price in the South was $366,200, up 1.7% from July 2022.
In the West, existing-home sales increased 2.7% from the previous month to an annual rate of 770,000 in July, down 12.5% from the prior year. The median price in the West was $610,500, unchanged from July 2022.
Redfin reports homebuyers are turning to newly built single-family homes as overall inventory sits at an all-time low
Newly built homes made up nearly one-third (31.4%) of single-family homes on the market nationwide in the second quarter, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s the highest share of any second quarter on record, with new construction keeping the housing market afloat amid the severe shortage of existing homes for sale.
The portion of new homes of all inventory is up from 30.3% a year earlier and nearly double the pre-pandemic share of about 17% in the second quarter of 2019.
The second quarter’s share is down from a near-record-high of 33.6% the previous quarter, but that’s a normal seasonal pattern, as the share of new homes tends to peak in the winter months.
New homes make up a near-record share of housing inventory for a few reasons:
- The pandemic-fueled homebuilding boom. Builders rushed to capitalize on the pandemic homebuying frenzy in 2021 and early 2022, driven by record-low mortgage rates and remote work.
- Lack of existing homes on the market. Builders aren’t constructing as many new single-family homes as they were at the height of the pandemic–but so few homeowners are putting their homes on the market that new homes still make up a huge share of available inventory. Total inventory dropped 15% year over year to an all-time low in June.
- Leftover inventory. Because elevated mortgage rates have slowed homebuying demand, builders haven’t yet offloaded all the new homes they completed over the last few years. Although buyers have made a dent in the glut of new-construction homes on the market over the last several months, there are still plenty of new homes on the market. The number of newly built single-family homes for sale was up 4.5% year over year in June, compared with an 18% drop for existing homes.
Homebuilders are benefiting from the scarcity of existing homes on the market
With inventory at a record low, many buyers are turning to new construction. But because overall demand is still relatively low, with high rates continuing to sideline many would-be homebuyers, some builders are lowering prices and offering perks to offload excess inventory.
For many homebuyers, new construction is a welcome option in today’s market–especially in the southern part of the country, where new homes tend to be more prevalent. That’s partly because new homes are often easier to find and partly because builders are more likely than individual homeowners to offer concessions; builders typically don’t have the option of pulling a home off the market if they’re unable to get the price they want.
“Builders are still building but homeowners aren’t selling, so new construction is the only option for many buyers,” said Shauna Pendleton, a Redfin Premier agent in Boise, ID, where new homes made up nearly 40% of single-family inventory in the second quarter. “A lot of buyers want to secure a home now because they’re worried prices are going to go back up, and new construction is more plentiful with perks that are hard to pass up. One builder is doing a promotion where buyers get anywhere from $15,000 to $25,000 worth of concessions. It was supposed to end in June, but they extended it through July, and now they’re extending it through August. That money can cover all of a buyer’s appliances with money left over for a mortgage-rate buydown.”
Metro-level highlights: Q2 2023
- Metros where new construction is most prevalent: Newly built homes made up more than half (52%) of single-family homes for sale in El Paso, TX, the biggest share of the metros in this analysis. It’s followed by Omaha, NE (46%), Raleigh, NC (42.1%), Oklahoma City (39%) and Boise (38%). New construction is typically prevalent in parts of the country with sprawling land and loose building codes.
- Metros where new construction is least prevalent: Newly built homes made up just 2.8% of single-family homes for sale in Honolulu, the smallest share of the metros in this analysis. Next come San Diego (3.3%), Pittsburgh, PA (3.3%), Oxnard, CA (3.7%), and Detroit (3.8%). New construction tends to be relatively uncommon in California because of limited land and strict regulations.
- Metros with the biggest upticks in newly built homes: New homes made up 33% of single-family inventory in Tulsa, OK, up from 20% a year earlier. That’s the biggest jump of the metros in this analysis. It’s followed by Richmond, VA (35%, up from 23%), Albany, NY (24%, up from 13%), Phoenix (26%, up from 15%) and Elgin, IL (25%, up from 15%).
- Metros with the biggest declines in newly built homes: Boise saw the biggest year-over-year decline by far, with new homes making up 38.3% of inventory, down from 49% a year earlier. It’s followed by Austin, TX (30.4%, down from 34.5%), Honolulu (2.8%, down from 6.4%), Allentown, PA (14.9%, down from 18.5%) and Houston (35.3%, down from 38.5%).
To view the full report, including charts and additional metro-level data, please visit: https://www.redfin.com/news/new-construction-homes-one-third-of-inventory
![94% Say Owning a Home Is Part of the American Dream, 51% Fear They Never Will [New LendingTree Study]](/media/k2/items/cache/a475219072facfc135e5222a8d58d51d_XS.jpg)
Owning a home has long been considered the quintessential American dream, but the path to those white picket fences is far from smooth. Although 84% of Americans say they’d like to own a home one day, 51% who don’t own today worry they’ll never get there.
We asked 2,000 U.S. consumers about their homeownership dreams, fears and challenges — here’s what we found.
- An overwhelming 94% of consumers say owning a home is part of the American dream — even if only 84% say it’s part of their dream.
- 51% of respondents who don’t own a home say they’re worried they never will. Among those who want to own one day, 49% say they can’t afford a down payment and 40% say home prices are too high in their area. Student loan debt weighs heaviest on millennials, with 19% citing it as a roadblock to homeownership.
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- Of the 84% who’d rather own a home than rent, nearly 3 in 5 (59%) say they like the flexibility to do whatever they want with the space — 58% say they value not having to worry about renewing a lease.
- Among the 16% who say they prefer to rent, 42% like not being responsible for maintenance or repair costs — 37% say it’s simply more affordable to rent.
- Home maintenance and repair costs are the top reasons homeowners dislike owning, at 36%; property taxes (35%) are a close second. Among renters, 30% say the worst part about their current situation is the unexpected rent increases, followed by having to deal with a landlord (22%).
You can check out our full report here: https://www.lendingtree.com/home/mortgage/homeownership-dreams-survey/
LendingTree's Senior Economist, Jacob Channel, had this to say:
"There’s no getting around how tough buying a home can be in today’s high-interest rates and high-price housing market. As tough as it may seem, those who want to buy but can’t afford to right now should try to keep hope. The more time you give yourself to do things like save for a down payment and work on your credit score, the more likely you’ll be able to buy one day.”
Redfin reports Texas and Florida survey respondents are twice as likely to cite affordability as a factor in choosing where to live than alignment on social issues
Roughly two of every five respondents to a recent Redfin survey who live in Texas or Florida would prefer to live in a place where abortion is legal, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s double the share who would prefer not to live in a place where abortion is legal.
The results from Texas and Florida are similar to results from the country as a whole. Texas has an abortion ban, and Florida's abortion ban is in legal limbo. Like Florida and Texas residents, about two of every five respondents from the U.S. overall would prefer to live in a place where abortion is legal, roughly double the share who would prefer not to.
This is according to a Redfin-commissioned survey conducted by Qualtrics in May and June 2023. The survey was fielded to 5,079 U.S. residents who either moved in the last year, plan to move in the next year, or rent their home. This report focuses on the 396 respondents who indicated they live in Florida, and the 414 who indicated they live in Texas.
Florida and Texas respondents are more likely to cite affordability than social views as a factor in choosing where to live
The contradiction between the type of place Florida and Texas respondents say they would prefer to live and where they actually live suggests that for many people, other factors outweigh social preferences in choosing where to reside.
Just over 1 in 10 Florida (13%) and Texas (12%) respondents who recently relocated said living in an area better aligned with their views on social issues factored into their move. Affordability was a more common reason, with more than 20% of Florida and Texas respondents citing a lower cost of living. Other reasons more commonly cited than alignment on social issues include a desire for more space and being closer to family. The results are similar for the U.S. as a whole.
“Deciding where to live is a compromise, and the housing affordability crisis in many parts of the country means many homebuyers must compromise certain preferences for affordability,” said Redfin Chief Economist Daryl Fairweather. “Even though many parts of Florida and Texas have attracted an influx of migrants who have pushed up prices over the last few years, homes there are far less expensive than a coastal city. A person who identifies with the local policies of a place like Seattle or San Francisco may live in a place like Dallas simply because it’s what they can afford.”
“Still, people often self-sort into areas where their neighbors have similar social and political views,” Fairweather continued. “Liberal people who live in Texas or Florida may choose a home in a neighborhood where they see flags that speak to their beliefs, for example.”
Homebuyers who are moving from one part of the country to another tend to flock from expensive coastal cities to relatively affordable metro areas, a trend that has been going strong for years but intensified during the pandemic because of record-low mortgage rates and remote work. Five of the 10 most popular destinations for Redfin.com users who are moving from one metro to another are in Florida, and two are in Texas. Overall, Florida and Texas gained more new residents than any other states in 2022.
Homes in Florida and Texas tend to be much less expensive than the common origins of people moving in. The typical home in Miami, for instance, sells for $515,000, compared with $705,000 in New York, the most common origin of movers to Miami. In Dallas, the typical home sells for $443,000, roughly half the price of Los Angeles, the most common origin for homebuyers moving to Dallas.
Even before the pandemic, Florida and Texas were popular destinations; they gained more new residents than any other state in both 2018 and 2019. For the many Americans who moved to those states before the Supreme Court overturned Roe v. Wade in mid-2022, abortion policies have since changed.
“For some people who moved to a place like Tampa or Dallas in 2019 or 2020 to get a more affordable home, a part of them may now wish they lived somewhere that aligns better with their views on abortion, since its legality is now in the hands of each individual state,” Fairweather said. “But it’s not that simple. They probably still appreciate the relatively low cost of living, and may not be able to afford to move to a different state. Beyond finances, many are entrenched in their jobs, their kids’ school and their communities, and those things make it hard to leave.
Florida and Texas respondents more likely to prefer living somewhere with protections for LGBTQ children than without them
Roughly one-third of Florida (37%) and Texas (33%) respondents would prefer to live in a place where gender-affirming care for children is legal, according to the same Redfin survey. That’s significantly higher than the 21% of Florida respondents and 25% of Texas respondents who would prefer not to live in such a place. Gender-affirming care includes transition surgeries and hormone therapies, among other treatments.
The reality of the legal landscape differs from the preference of many Florida and Texas respondents. Gender-affirming care for transgender youth is illegal in Texas and Florida as of this year, though the latter’s rule is in limbo as it experiences legal challenges to its enforcement.
A similar share of Florida (36%) and Texas (35%) respondents would prefer to live in a place that has laws allowing discussion of LGBTQ topics in schools. That’s higher than the 25% and 28%, respectively, who would prefer not to live in such a place.
Discussion of sexual orientation and gender identity in school is banned via a so-called “Don’t Say Gay” bill in Florida, and a similar bill is making its way through Texas’ state government.
The results from Florida and Texas are comparable to the nation overall.
To view the full report, including charts and more details on the survey, please visit:
https://www.redfin.com/news/housing-survey-florida-texas-legal-abortion
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