More than forty years being associated inside the mortgage and real estate communities has taught me a great deal. Working with some of the best professionals in these areas across the country can also remind me that the more things change, the more they stay the same. I have preached here before the value of situational awareness and that the true value of any professional is providing options for their clients and sharing multiple ways of getting things done. A recent conversation with one of my clients brought back the exact same scenario I had with a client more than 30 years ago and helped me understand very deeply about how much value we can bring to the table if we just look at all the details and provide objective options!
Quite simply, the story goes like this; a couple want to sell a house and buy another one that suits their needs much better for the next stage of their lives. Having a current home that has amassed a huge amount of equity, the couple goes to an agent who starts to show them houses that fit their new objectives. They see a number of homes and locations that would work well, and then go home and start searching the internet for solutions. UGH!!!
They discover that even with putting all of their equity down on the new house, the new payments would be far too high for them and assume that their dream is dead. When their agent calls to follow up, the clients share the story, and the agent suggests that they speak to my client to discuss their options. Still holding the desire to make their move, they reach out to my client for a conversation. After looking at ALL THE NUMBERS, it became obvious that their equity would be best used to eliminate outstanding debt, thus reducing their total monthly payments. This meant that they could get the house and location they dreamed about, but also REDUCE their total monthly financial obligations by a large amount! They listed and sold their current home, paid off their debt, bought the house they loved, and reduced their total monthly obligations!
These people would never have known what they were capable of doing if not for skilled professionals providing all their options. You must establish that value if you are going to compete against the internet and social media! Differentiation matters! Questions or comments: This email address is being protected from spambots. You need JavaScript enabled to view it.
![Existing-Home Sales Rose 3.1% in January [NAR]](/media/k2/items/cache/d2af3a14b3e10d7ed9eb1f44e27b82d5_L.jpg)
– Existing-home sales grew in January, according to the National Association of Realtors®. Among the four major U.S. regions, sales accelerated in the Midwest, South and West, and remained steady in the Northeast. Year-over-year, sales improved in the West, and decreased in the Northeast, Midwest and South.
Total existing-home sales[i] – completed transactions that include single-family homes, townhomes, condominiums and co-ops – elevated 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January. Year-over-year, sales slipped 1.7% (down from 4.07 million in January 2023).
“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said NAR Chief Economist Lawrence Yun. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”
Total housing inventory[ii] registered at the end of January was 1.01 million units, up 2.0% from December and 3.1% from one year ago (980,000). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from 3.1 months in December but up from 2.9 months in January 2023.
The median existing-home price[iii] for all housing types in January was $379,100, an increase of 5.1% from one year ago ($360,800). All four U.S. regions posted price increases.
“The median home price reached an all-time high for the month of January,” Yun added. “Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth.”
REALTORS® Confidence Index
According to the monthly REALTORS® Confidence Index, properties typically remained on the market for 36 days in January, up from 29 days in December and 33 days in January 2023.
First-time buyers were responsible for 28% of sales in January, down from 29% in December and 31% in January 2023. NAR’s 2023 Profile of Home Buyers and Sellers – released in November 2023[iv] – found that the annual share of first-time buyers was 32%.
All-cash sales accounted for 32% of transactions in January, up from 29% in both December and one year ago.
Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in January, up from 16% in December and January 2023.
Distressed sales[v] – foreclosures and short sales – represented 2% of sales in January, virtually unchanged from last month and the previous year.
Mortgage Rates
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.77% as of February 15. That’s up from 6.64% the previous week and 6.32% one year ago.
Single-family and Condo/Co-op Sales
Single-family home sales moved higher to a seasonally adjusted annual rate of 3.6 million in January, up 3.4% from 3.48 million in December but down 1.4% from the prior year. The median existing single-family home price was $383,500 in January, up 5.0% from January 2023.
At a seasonally adjusted annual rate of 400,000 units in January, existing condominium and co-op sales were unchanged from last month and down 4.8% from one year ago (420,000 units). The median existing condo price was $339,400 in January, up 5.7% from the previous year ($321,100).
Regional Breakdown
At 480,000 units, existing-home sales in the Northeast were unchanged from December but down 5.9% from January 2023. The median price in the Northeast was $434,300, up 10.1% from the prior year.
In the Midwest, existing-home sales increased 2.2% from one month ago to an annual rate of 950,000 in January, down 3.1% from last year. The median price in the Midwest was $271,700, up 7.6% from January 2023.
Existing-home sales in the South rose 4.0% from December to an annual rate of 1.84 million in January, a decline of 1.6% from the previous year. The median price in the South was $345,100, up 4.1% from one year ago.
In the West, existing-home sales elevated 4.3% from a month ago to an annual rate of 730,000 in January and grew 2.8% from one year earlier. The median price in the West was $572,100, up 6.3% from January 2023.
“More listings will help Americans move,” said NAR President Kevin Sears, broker-partner of Sears Real Estate in Springfield, Massachusetts. “That’s why NAR has pushed for the passage of H.R. 1321 – The More Homes on the Market Act – which would lower the tax hit on home sales and bring additional inventory to the market.”
[i] Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.
The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.
[ii] Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).
[iii] The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.
The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.
[iv] Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s REALTORS® Confidence Index, which include all types of buyers. The annual study only represents primary residence purchases, and does not include investor and vacation home buyers. Results include both new and existing homes.
[v] Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s REALTORS® Confidence Index, posted at nar.realtor.
![65% of Mortgage Offers Went to First-Time Homebuyers in 2023 [New LendingTree Report]](/media/k2/items/cache/e7b59c06e5b33284e627d8fa9aea1d29_M.jpg)
With mortgage rates and home prices as high as they’ve been, many would-be buyers stayed out of the housing market in 2023. But the latest LendingTree data shows that of those who remained active in the market, first-timers were much more common than those who already owned a home.
Through a nationwide analysis of mortgage offers given to users of the LendingTree platform in 2023, we found that nearly 2 out of 3 went to first-time buyers. Here's what else we found.
- Nationwide, 65.25% of mortgage offers made on the LendingTree platform in 2023 went to those who identified as first-time homebuyers.
- The states where the highest shares of mortgage offers are given to first-time buyers are New York, California and New Jersey. 77.30% of offers in New York went to first-time buyers. The shares were 73.15% and 72.22% in California and New Jersey.
- The states where the lowest shares of mortgage offers are given to first-time buyers are South Dakota, Alaska and Arkansas. In South Dakota, 54.29% of mortgage offers went to first-timers. That figure was only slightly higher in Alaska, at 54.38%. It was 56.19% in Arkansas.
- On average, loan amounts for first-time buyers across the 50 states are $49,021 smaller than those of repeat buyers. Credit scores are about 32 points lower while down payments are an average of $42,218 lower.
You can check out our full report here: https://www.lendingtree.com/home/mortgage/first-time-homebuyers-study/
LendingTree's Senior Economist and report author, Jacob Channel, had this to say:
"Even in the face of relatively high rates and steep home prices, first-timers on LendingTree’s platform still received a relatively large share of offers in 2023. While this goes to show that first-timers are still buying, it’s important to note that it doesn’t mean that the housing market was totally overrun by newbies. On the contrary, 2023’s housing market wasn’t very active compared to previous years. This means that first-time buyers weren’t necessarily flooding the market, so much as they just happened to make up a bigger portion of a smaller overall pool of would-be mortgage borrowers."
Redfin reports new listings dropped for the first time since June and pending sales growth slowed; stagnating mortgage rates and the biggest home-price jump in over a year caused the market to lose momentum
New listings dropped 1.2% month over month on a seasonally adjusted basis, the first decline since June, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. They were up 2.7% from a year earlier, but that marks a deceleration from December’s 4.2% gain.
Active listings (the total number of homes for sale) fell 0.3% from a month earlier on a seasonally adjusted basis—the first decline in six months—and were down 4.4% year over year.
Pending home sales also lost momentum in January, rising 1.1% from a month earlier on a seasonally adjusted basis—a marked slowdown from December’s 5.1% jump. Still, pending sales were at the highest level since September 2022 and rose 8.8% from a year earlier.
Stagnant mortgage rates are the main culprit that took the gas off the housing market pedal last month. They started and ended January at 6.6%—unexciting news after buyers and sellers at the end of last year watched rates drop the most since 2008. Homeowners are hesitant to sell because a majority of them still have mortgage rates below current levels, and selling often means taking on a higher rate.
“A lot of my customers are paying close attention to what the Federal Reserve says. Buyers and sellers came off the sidelines in December when the Fed signaled it would lower interest rates three times in the next year, but now some are getting cold feet because the Fed indicated that rate cuts may come later than expected,” said Hal Bennett, a Redfin Premier real estate agent in Bellevue, WA. “Inflation and geopolitical conflicts are also scaring some buyers. April, at the absolutely earliest, is when I think things could take off.”
Brutally cold temperatures across the country last month, along with rising housing costs, also likely contributed to the slight cooldown in market activity.
Home Prices Posted the Biggest Increase in 16 Months
The median U.S. home sale price climbed 5.2% year over year to $402,343 in January, the biggest jump since September 2022. Prices were little changed from a month earlier (-0.01%). Please note that home price data is not seasonally adjusted, which is why Redfin focuses on year-over-year changes for this metric.
America's enduring shortage of homes for sale is the primary driver of price growth; both new listings and active listings remained far below pre-pandemic levels in January.
|
January 2024 Highlights: United States |
|||
|
January 2024 |
Month-Over-Month |
Year-Over-Year |
|
|
Median sale price |
$402,343 |
0.0% |
5.2% |
|
Pending sales, seasonally adjusted |
430,809 |
1.1% |
8.8% |
|
Homes sold, seasonally adjusted |
392,446 |
-0.2% |
-1.0% |
|
New listings, seasonally adjusted |
510,057 |
-1.2% |
2.7% |
|
All homes for sale, seasonally adjusted (active listings) |
1,554,413 |
-0.3% |
-4.4% |
|
Months of supply |
3.1 |
0.5 |
-0.3 |
|
Median days on market |
49 |
6 |
-3 |
|
Share of for-sale homes with a price drop |
16.9% |
2.9 ppts |
0.2 ppts |
|
Share of homes sold above final list price |
23.9% |
-1.7 ppts |
2.7 ppts |
|
Average sale-to-final-list-price ratio |
98.4% |
-0.2 ppts |
0.5 ppts |
|
Pending sales that fell out of contract, as % of overall pending sales |
14.2% |
-1.5 ppts |
0.9 ppts |
|
6.64% |
-0.18 ppts |
0.37 ppts |
|
Metro-Level Highlights: January 2024
- Pending sales: In Las Vegas, pending sales rose 43.4% year over year, more than any other metro Redfin analyzed. Next came Stockton, CA (40.9%) and Raleigh, NC (38.5%). Pending sales fell most in Cincinnati (-19.7%), Grand Rapids, MI (-16.2%) and Tulsa, OK (-11.9%).
- Closed sales: Closed sales rose most in Stockton (27.9%), San Jose, CA (19.9%) and Salt Lake City (18.1%). They fell most in Camden, NJ (-16.5%), Jacksonville, FL (-13.7%) and Buffalo, NY (-11.2%).
- Prices: Median sale prices rose most from a year earlier in Camden (14.3%), Miami (13.8%) and Knoxville, TN (13.6%). They fell in five metros, with the biggest declines in San Antonio (-4.9%), Austin, TX (-4.4%) and Memphis (-3.9%).
- New listings: New listings rose most from a year earlier in North Port, FL (31.9%), McAllen, TX (29.6%) and Fort Lauderdale, FL (27.1%). They fell most in Grand Rapids (-21.9%), Lake County, IL (-19.9%) and Kansas City, MO (-16.3%).
- Overall supply: Active listings increased fastest in Cape Coral, FL (57.9%), North Port (44.9%) and McAllen (24.2%). They decreased fastest in Raleigh (-28.5%), Las Vegas (-24.8%) and New Brunswick, NJ (-24.1%).
- Competition: In Rochester, NY, 66.2% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Newark, NJ (59.7%) and Buffalo (58.1%). The shares were lowest in West Palm Beach, FL (6.8%), North Port (6.8%) and Cape Coral (7.7%).
- Speed: In Rochester, 70.5% of homes that went under contract did so within two weeks—the highest share among the metros Redfin analyzed. Next came Seattle (65.7%) and San Jose (62%). The lowest shares were in Chicago (14.7%), Knoxville (16.9%) and Tucson, AZ (17.4%).
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-tracker-january-2024
Home prices posted their biggest annual increase in 15 months and mortgage rates rose above 7% this week.
The median U.S. home-sale price rose 6.1% year over year during the four weeks ending February 11, the biggest increase since October 2022. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Mortgage rates are rising, too, exacerbating high prices to drive costs up: Daily average rates are sitting above 7%, up from 6.6% at the beginning of the month.
High costs are one factor keeping would-be homebuyers on the sidelines. Pending home sales are down 7.3% year over year, one of the biggest declines in over four months, and Redfin’s Homebuyer Demand Index–a seasonally adjusted measure of requests for tours and other homebuying services from Redfin agents–is down 18%. In addition to high housing costs, several seasonal factors kept some house hunters at home this past week: extreme storms in Southern California, the Lunar New Year and the Super Bowl (none of which are accounted for in the demand index’s seasonal adjustment). Sellers are a bit more active than buyers, with new listings up 8% year over year as some homeowners hope to take advantage of rising prices.
“The Super Bowl is like Groundhog Day for real estate economists; we usually have a read on how the market is shaping up by the beginning of February, and the read this year is that it’s looking sluggish so far, mostly because of stubbornly high mortgage rates,” said Redfin Economic Research Lead Chen Zhao. “This week’s hotter-than-expected inflation report confirms that the Fed is unlikely to cut interest rates next month, which means mortgage rates will stay near 7% for now. Activity should pick up a bit in the spring, partly because it’ll be selling season and partly because people are getting more and more accustomed to elevated rates. We expect mortgage rates to start declining later in the spring as inflation eases and the Fed finally starts cutting interest rates.”
Christine Kooiker, a Redfin Premier agent in Grand Rapids, MI, said she’s encouraging homeowners who are thinking about selling to list soon.
“A lot of sellers want to wait until spring, but I’m telling people to consider listing in the next few weeks because even though demand is fairly slow, there’s hardly anything else on the market,” Kooiker said. “Buyers may want to act sooner rather than later, too, because prices will continue to go up. I have a few clients who waited to make an offer, or made an offer that was too low, and now they regret it because a house they love got snatched up.”
Leading indicators
|
Indicators of homebuying demand and activity |
||||
|
Value (if applicable) |
Recent change |
Year-over-year change |
Source |
|
|
Daily average 30-year fixed mortgage rate |
7.09% (Feb. 14) |
Up from 6.75% a week earlier |
Up from 6.54% |
|
|
Weekly average 30-year fixed mortgage rate |
6.64% (week ending Feb. 8) |
Near lowest level since May |
Up from 6.12% |
|
|
Mortgage-purchase applications (seasonally adjusted) |
Down 3% from a week earlier; up 1% from a month earlier (as of week ending Feb. 9) |
Down 12% |
||
|
Redfin Homebuyer Demand Index (seasonally adjusted) |
Down about 6% from a week earlier (as of week ending Feb. 11) |
Down 18% |
Redfin Homebuyer Demand Index, a measure of requests for tours and other homebuying services from Redfin agents |
|
|
Google searches for “home for sale” |
Essentially unchanged from a month earlier (as of Feb. 10) |
Down 11% |
||
|
Touring activity |
Up 14% from the start of the year (as of Feb. 12) |
At this time last year, it was up 10% from the start of 2023 |
ShowingTime, a home touring technology company |
|
Key housing-market data
|
U.S. highlights: Four weeks ending February 11, 2024 Redfin’s national metrics include data from 400+ U.S. metro areas, and is based on homes listed and/or sold during the period. Weekly housing-market data goes back through 2015. Subject to revision. |
|||
|
Four weeks ending February 11, 2024 |
Year-over-year change |
Notes |
|
|
Median sale price |
$362,725 |
6.1% |
Biggest increase since Oct. 2022 |
|
Median asking price |
$395,850 |
6.3% |
|
|
Median monthly mortgage payment |
$2,608 at a 6.64% mortgage rate |
9.1% |
Down roughly $110 from all-time high set in October 2023, but up roughly $250 from the four weeks ending Dec. 31 |
|
Pending sales |
72,221 |
-7.3% |
Biggest decline since October 2023 (with the exception of the prior 4-week period, when there was a 7.4% decline) |
|
New listings |
73,214 |
8% |
|
|
Active listings |
751,411 |
-2.5% |
|
|
Months of supply |
4.2 months |
+0.1 pt. |
4 to 5 months of supply is considered balanced, with a lower number indicating seller’s market conditions. |
|
Share of homes off market in two weeks |
35.3% |
Up from 34% |
|
|
Median days on market |
50 |
-2 days |
|
|
Share of homes sold above list price |
22.5% |
Up from 20% |
|
|
Share of homes with a price drop |
5.6% |
+1.1 pts. |
|
|
Average sale-to-list price ratio |
98.2% |
+0.5 pts. |
|
|
Metro-level highlights: Four weeks ending February 11, 2024 Redfin’s metro-level data includes the 50 most populous U.S. metros. Select metros may be excluded from time to time to ensure data accuracy. |
|||
|
Metros with biggest year-over-year increases |
Metros with biggest year-over-year decreases |
Notes |
|
|
Median sale price |
Newark, NJ (14%) New Brunswick, NJ (13.8%) Miami (13.2%) Anaheim, CA (12.8%) Warren, MI (12%) |
San Antonio, TX (-5.2%) Austin, TX (-1.4%) Fort Worth, TX (-0.7%) |
Declined in 3 metros |
|
Pending sales |
San Jose, CA (9%) Cleveland, OH (2%) San Francisco (1.9%) |
Portland, OR (-31.3%) San Antonio, TX (-28.4%) Warren, MI (-24.2%) Nashville, TN (-21.8%) New Brunswick, TN (-20.1%) |
Increased in 3 metros |
|
New listings |
Dallas, TX (28.6%) Jacksonville, FL (28.4%) Fort Lauderdale, FL (26.7%) Miami (25.6%) Tampa, FL (19.6%) |
Milwaukee, WI (-13.5%) Atlanta (-13.3%) Chicago (-11.9%) Portland, OR (- 11.7%) Nashville, TN (-7.4%) |
Declined in 12 metros |
To view the full report, including charts, please visit:
https://www.redfin.com/news/housing-market-update-prices-mortgage-rates-rise
MCLEAN, Va., Feb. 15, 2024 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.77 percent.
"On the heels of consumer prices rising more than expected, mortgage rates increased this week,” said Sam Khater, Freddie Mac’s Chief Economist. “The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season. According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier.”
News Facts
- The 30-year FRM averaged 6.77 percent as of February 15, 2024, up from last week when it averaged 6.64 percent. A year ago at this time, the 30-year FRM averaged 6.32 percent.
- The 15-year FRM averaged 6.12 percent, up from last week when it averaged 5.90 percent. A year ago at this time, the 15-year FRM averaged 5.51 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. For more information, view our Frequently Asked Questions.
Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More: Website
Overall, investor home purchases dropped 11% from a year earlier, the smallest decline since they began falling in 2022
Real estate investors bought 26.1% of low-priced U.S. homes that sold in the fourth quarter, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s the highest share on record and is up from 24% a year earlier. By comparison, investors purchased 13.6% of mid-priced homes that sold (vs 14.3% a year earlier) and 15.9% of high-priced homes that sold (vs 15.4% a year earlier).
Investors are drawn to affordable homes for the same reason as other homebuyers: They cost less, which is especially attractive when home prices and borrowing costs remain elevated. And when housing affordability is this strained, there could be more potential for value increases in the lower price tier, meaning more potential for building equity.
For its analysis, Redfin determined the three price tiers by dividing home purchases into three buckets: low-priced, mid-priced and high-priced. Low-priced homes are those that fall into the bottom tercile of local sale prices, while mid-priced are those in the middle tercile and high-priced are those in the top tercile.
Low-priced homes made up 46.5% of all investor purchases in the fourth quarter (vs 47.2% a year earlier), while mid-priced homes made up 24.6% (vs 26.4% a year earlier) and high-priced homes represented 28.8% (vs 26.5% a year earlier).
“I get tons of emails every day from investors looking for properties, but of course, they only want homes that are under market value, which are hard to come by. When they find those properties, they pile in,” said Carrie Caruthers, a Redfin Premier real estate agent in Riverside County, CA. “I’ve recently seen an uptick in foreclosures, which investors are interested in because they often sell at a discount. I just sold one foreclosed house to an investor for $400,000. It probably would’ve sold for around $500,000 if it hadn’t been a foreclosure, but the investor got a deal because foreclosure purchases come with risks.”
Overall Investor Home Purchases Dropped 11% in the Fourth Quarter
Investor purchases of U.S. homes fell 10.5% year over year in the fourth quarter to 46,419—the lowest fourth-quarter level since 2016. Overall U.S. home purchases posted a slightly larger decline, falling 12.2% to 251,462—the lowest fourth-quarter level since 2012.
Investor home purchases have fallen in part because high interest rates, elevated home prices and a sluggish rental market have made investing less lucrative. Some investors have shifted their money into other investments that offer good returns and lower risk, such as Treasury bonds. But Redfin agents in both California and Florida said many investors are still hungry for homes.
“There are a lot of investors out there fighting for properties,” said Juan Castro, a Redfin Premier real estate agent in Orlando, FL, which posted the third largest drop in investor purchases in the country last quarter. “There just aren’t enough properties to go around, which is putting a cap on how many homes investors can buy.”
The total supply of homes for sale in the U.S. fell 5.1% year over year in December and remained far below pre-pandemic levels as most homeowners stayed put to avoid losing the rock-bottom mortgage rate they scored during the pandemic.
The typical home purchased by investors in the fourth quarter cost $453,271, up slightly from $426,573 a year earlier, as U.S. home prices ticked up. Overall, investors bought $32.3 billion worth of U.S. homes, down just slightly from $33.6 billion a year earlier.
Investors Purchases Didn’t Fall Nearly as Fast as They Did Last Year
The 10.5% drop in investor home purchases in the fourth quarter marks the sixth straight year-over-year decline. But that pales in comparison to the 44.1% drop of a year earlier and represents the smallest decrease since investor purchases started falling in the third quarter of 2022.
The decline in investor purchases has eased as the shock of elevated mortgage rates has subsided and the U.S. economy has proven to be more resilient than many expected.
“It’s too early to say that investor purchases have hit a bottom, but they’re unlikely to shoot up like they did during the pandemic anytime soon,” said Redfin Senior Economist Sheharyar Bokhari. “That’s because borrowing costs and home prices remain high, the number of homes available to buy remains low and rents remain lackluster. If the Fed cuts interest rates later this year as expected, we may see more investors wade into the housing market.”
Investors Bought Nearly 1 of Every 5 Homes That Sold in the Fourth Quarter
Investors bought 18.5% of U.S. homes that sold in the fourth quarter, up from 18.1% a year earlier. Their market share likely rose slightly because they didn’t retreat as quickly as individual buyers.
Single-Family Homes Represented Over Two-Thirds of Investor Purchases
Single-family homes represented 68.6% of investor purchases in the fourth quarter (vs 68.8% a year earlier). Condos/co-ops made up the second largest share (19.2% vs 17.9% a year earlier), followed by townhouses (7.1% vs 8% a year earlier) and multifamily properties (5.1% vs 5.3% a year earlier).
Metro-Level Highlights: Q4 2023 Investor Activity
Where investor purchases increased/decreased most from a year earlier:
- Biggest increases: Riverside, CA (+25%), Chicago (+20.9%), San Jose, CA (+18%)
- Biggest decreases: Cincinnati (-28.8%), Providence, RI (-27.7%), Orlando, FL (-26.5%)
Where investors bought the highest/lowest share of homes that sold:
- Highest share: In Miami, investors bought 31.5% of homes that sold. Next came Jacksonville, FL (25.6%) and Anaheim, CA (25.5%).
- Lowest share: Providence, RI (9.9%), Warren, MI (10.1%), Montgomery County, PA (10.2%).
Where the share of homes bought by investors increased/decreased most from a year earlier:
- Biggest increases: In Sacramento, CA, investors bought 21.5% of homes that sold, up 4.6 percentage points from a year earlier. Next came San Diego (+4.6 ppts) and Riverside (+4.3 ppts).
- Biggest decreases: Atlanta (-3 ppts), Orlando (-2.7 ppts), Miami (-2.5 ppts).
To view the full report, including charts and additional metro-level data, please visit: https://www.redfin.com/news/investor-home-purchases-q4-2023
I spoke a little bit last week about conversions and how tracking your conversion rates can really help you dial in your business. Far too often people are focused solely on lead generation, which is important, but they fail to track those leads through their system and use that data to improve their total conversion rates. So, this week I wanted to explore this just a little bit and give you some information to think about including in your business. Here are the main items you want to track to help you improve your conversions, as well as understanding the net result of your leads from all referral sources.
- Referral source
- Initial contact
- Credit Pull/Preliminary document collection
- Preapproval
- Contract
- Closed
In general, you want to track all of your leads and come to a total number for your overall conversions. However, you also want to be sure you use referral sources as individual categories so you can track specific results. These results may surprise you! You may get dozens of leads from a referral source that you spend time and money on, but close very few deals. On the other hand, you may have a referral source that sends you just a few leads, but you close a significantly higher percentage of them. More isn’t always better! In fact, more could be costing you in the long run!
You also need to look at the relationship between each stage of the process to see where people are falling off. Sometimes a good look at this and some minor adjustments to how and when you follow up can greatly improve your conversions rates! Remember, leads aren’t what puts money in your pocket; closed units are what pays the bills!
If you would like some help working through your conversion rates and how to better track your business, please feel free to reach out and set up a call, This email address is being protected from spambots. You need JavaScript enabled to view it.
Rents haven’t fluctuated much over the past year, rising 1% in January–a far cry from double-digit growth during the pandemic.
The median U.S. asking rent rose 1.1% year over year to $1,964 in January, the largest annual increase since March 2023, and was unchanged from a month earlier, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. While rents ticked up from a year earlier, the bigger picture is that rent growth is leveling off after surging during the pandemic and then rapidly slowing from mid-2022 to mid-2023.
Year-over-year rent growth has hovered between -2.1% and +2.4% for the past year, a much narrower range than the prior year, when rent growth was as low as 4.8% and as high as 17.7%.
Asking rents have flattened because the pandemic moving frenzy is over and landlords are grappling with vacancies due to a jump in apartment supply. The rental vacancy rate was 6.6% in the fourth quarter, tied with the prior quarter for the highest level since early 2021. Vacancies have climbed due to a building boom in recent years. The number of recently completed apartments is near its highest level in more than 30 years, and the number under construction is just shy of its record high. Redfin Chief Economist Daryl Fairweather expects apartment completions to peak in 2024.
While rents have cooled, they haven’t yet posted significant declines. That’s likely because high mortgage rates continue to fuel rental demand, and because some landlords are offering one-time concessions like a free month’s rent or reduced parking costs to attract renters without having to lower asking rents on paper.
Home prices are rising much faster than rents, which is also fueling rental demand and motivating renters to stay put instead of entering the housing market.
“There’s not a huge incentive for renters to buy right now. Asking rents are stable, and while mortgage rates have dipped in recent months, they haven’t fallen enough to make the financial equation of homebuying feasible for many people,” Fairweather said. “If you’re a renter who’s interested in buying but isn’t in a rush, there’s not much downside to waiting for mortgage rates to fall and your savings to grow.”
Buying may make sense for people who can afford a large down payment and plan to stay put for at least five years, Fairweather said. Putting 20% down helps offset the cost of elevated mortgage rates and removes the cost of private mortgage insurance, and some may prefer to buy now before competition inevitably heats up when mortgage rates fall further. Of course, many Americans can’t afford a 20% down payment, though some do qualify for down payment assistance.
Rents Climb Fastest in the Midwest and Northeast
The median asking rent in the Midwest increased 4.6% year over year to a record $1,437 in January. Rents also rose in the Northeast (2.3% to $2,427) and the West (0.6% to $2,358). In the South, rents were unchanged at $1,637. The Midwest was the only region where rents hit a record high.
“Rent prices in Chicago are still out of control,” said local Redfin Premier real estate agent Dan Close. “A lot of the buyers I’m working with are people who have been pressured out of renting–if you’re paying an arm and a leg for rent, why not try to buy and build some equity? We’ll likely see this trend intensify in the spring and summer, when the vast majority of leases end.”
Rents are likely holding up best in the Midwest and Northeast because those regions haven’t been building as much as the South and West, meaning landlords aren’t under as much pressure to fill openings.
To view the full report, including charts and methodology, please visit:
https://www.redfin.com/news/redfin-rental-report-january-2024
FHLBank San Francisco Member Financial Institutions Can Now Originate More Loans for Underserved Borrowers to Close the Racial Homeownership Gap
The Federal Home Loan Bank of San Francisco (FHLBank San Francisco) and VantageScore announced today that FHLBank San Francisco will now accept mortgage collateral originated by lenders using VantageScore 4.0 credit scores, which considers rental payments and other data points into its scoring algorithms that are not included in traditional scoring models, ushering in an innovative solution aimed at closing the racial homeownership gap. By expanding the kind of mortgage collateral eligible to be pledged by member financial institutions borrowing from FHLBank San Francisco, lenders will be able to increase the amount of creditworthy mortgage applicants and include many underserved borrowers left out by conventional models. VantageScore estimates that using the VantageScore 4.0 credit model will result in approximately 33 million more consumers nationwide having access to a credit score that may aid them in obtaining a mortgage; including an estimated 5.5 million consumers within the FHLBank’s regional footprint of Arizona, California, and Nevada.
“We know there are millions of creditworthy borrowers aspiring to be homeowners who are falling through the cracks,” said Teresa Bryce Bazemore, President and CEO of the Bank of San Francisco. “Expanding the pool of creditworthy applicants through the use of more inclusive and innovative predictive models, such as VantageScore 4.0, effectively helps us deliver the American Dream of homeownership to more applicants and further narrow the racial wealth gap. Over the last few years, we have dedicated significant resources and commitment to investing in expanding Black homeownership and we are excited to be the first mover among our peers and bring the program to life.”
In October 2022, the Federal Housing Finance Agency announced its approval of VantageScore 4.0 for Fannie Mae and Freddie Mac, enabling widespread industry adoption of the new credit scoring method and opening the door to millions more qualified applicants by incorporating rental payments and other data points into scoring algorithms not included in traditional scoring models, all without lowering credit risk standards.
Notably, FHLBank San Francisco is the first in the Federal Home Loan Bank System to accept collateral that uses VantageScore’s predictive and inclusive credit scoring model. This decision is the latest step that FHLBank San Francisco has taken over the last four years to advance racial equity in homeownership and wealth building:
- In June 2020, FHLBank San Francisco announced it would redouble its commitment to making homeownership possible for more Black households.
- In October 2021, FHLBank San Francisco launched the Racial Equity Accelerator, a two-year research and product advancement initiative with the Urban Institute to identify ways to close the racial homeownership gap.
- As part of that initiative, in October 2022, the Urban Institute issued an analysis, “Reducing the Black-White Homeownership Gap through Underwriting Innovations,” that detailed ways to use alternative data to expand the pool of eligible homebuyers and recognized the impact of VantageScore 4.0.
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- In October 2023, FHLBank San Francisco published “Closing The Racial Equity Gap: A Call To Action,” which includes a package of recommendations for updating the housing ecosystem to close the racial homeownership and wealth gaps. In that report, FHLBank San Francisco highlighted the VantageScore 4.0 model as being more inclusive and particularly effective in communities currently excluded from the mortgage marketplace.
- Following the report, FHLBank San Francisco began a validation process that was completed at the end of 2023, validating the VantageScore 4.0 model as acceptable for residential mortgage loans pledged to secure credit from FHLBank San Francisco.
“The decision by the Federal Home Loan Bank of San Francisco to accept mortgage collateral backed by VantageScore will have a significant impact on boosting homeownership rates among creditworthy but traditionally underserved communities, while increasing safety and soundness,” said Anthony Hutchinson, SVP of Government and Industry Relations, VantageScore. “Addressing the persistent disparities that exist in mortgage lending is an important precursor to reducing the homeownership gap in communities of color, which is a priority that both VantageScore and Federal Home Loan Bank of San Francisco share.”
“We believe in driving financial inclusion and creating more equitable access to credit in the communities we serve,” said Richard Wada, Chief Lending Officer at Patelco Credit Union, headquartered in Dublin, California. “We've been using VantageScore 4.0 for our auto loans and credit cards and that's provided us with a new pathway to provide fair and accurate credit scores to a broader population, creating opportunities for us to lend credit safely and soundly to consumers historically left behind. We look forward to leveraging VantageScore 4.0 for mortgage lending in the future.”
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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing the 30-year fixed-rate mortgage (FRM) averaged 6.64 percent.
“Mortgage rates remain stagnant, hovering in the mid-six percent range over the past several weeks,” said Sam Khater, Freddie Mac’s Chief Economist. “The economy and labor market remain strong with wage growth outpacing inflation, which is keeping consumer spending robust. Meanwhile, affordability in the housing market is an ongoing issue due to continued high home prices, elevated mortgage rates and low supply of homes on the market, particularly for first-time and low-income homebuyers.”
News Facts
- The 30-year FRM averaged 6.64 percent as of February 8, 2024, up slightly from last week when it averaged 6.63 percent. A year ago at this time, the 30-year FRM averaged 6.12 percent.
- The 15-year FRM averaged 5.90 percent, down from last week when it averaged 5.94 percent. A year ago at this time, the 15-year FRM averaged 5.25 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. For more information, view our Frequently Asked Questions.
Freddie Mac’s mission is to make home possible for families across the nation. We promote liquidity, stability, affordability and equity in the housing market throughout all economic cycles. Since 1970, we have helped tens of millions of families buy, rent or keep their home. Learn More: Website
In an increasingly environmentally conscious world, improving your home's energy efficiency is not only responsible but also a wise investment. As sustainable living grows in popularity, energy-efficient homes are gaining momentum, often yielding a higher resale value and can help sell your home fast due to their lower environmental impact and reduced energy bills. Inspired by the will to reside in environmentally conscious and energy-efficient homes, let's explore five practical ways you can transform your living space into a sustainable haven.
1. Embrace energy-efficient appliances and lighting
One of the simplest yet most effective steps towards a sustainable home is updating your appliances and lighting. Energy-efficient appliances, identifiable by the Energy Star label, use less energy, reducing both your carbon footprint and utility bills. Similarly, LED light bulbs are a smart swap, consuming up to 80% less energy than traditional incandescent bulbs. This small change not only reduces energy consumption but also cuts down on replacement costs due to their longer lifespan.
2. Water conservation with low-flow fixtures
Water is a precious resource, and conserving it is a cornerstone of sustainable living. Using low-flow showerheads and faucets can help reduce water usage while maintaining daily needs. This simple modification can significantly lower water bills and conserve water a for sustainable living.
3. Insulate and seal your home
A well-insulated home is key to energy efficiency. Proper insulation in walls, attics, and other key areas helps maintain your home's temperature, lessening the reliance on heating and cooling systems. This not only saves energy but also enhances the comfort of your living space.
4. Utilize natural light and heat
Leveraging natural light can dramatically reduce dependence on artificial lighting. Consider adding windows or skylights, and keep curtains and blinds open during the day. Additionally, planting trees or installing shading devices can naturally cool your home, reducing the need for air conditioning. These strategies not only make your home energy-efficient but also create a more pleasant and healthier living environment.
5. Smart home technology for energy management
Adopting smart home technologies, like a programmable thermostat, can significantly improve your home's energy efficiency. These devices allow you to automatically adjust your home's temperature based on your schedule, reducing energy waste. Unplugging chargers when not in use is another small but impactful step in reducing energy consumption.
Conclusion
Creating an energy-efficient home is a journey of thoughtful choices and investments. From upgrading to energy-efficient appliances to insulating your home, each step contributes to a more sustainable lifestyle. Understanding the value and benefits of these changes, whether it's for comfort, health, environmental reasons, or technological advancement, can make a significant difference. Embrace these changes and enjoy not only a more sustainable home but also the peace of mind that comes with knowing you're contributing to a healthier planet.
I have said it before, but it is worth repeating, how you handle that first interaction with a prospect can vastly improve your conversion rates. Why is this important? Because improving your conversion rates amounts to free money! You work so hard to generate an opportunity, why not spend just a little time refining your process and improve your conversion rates? Scary part is, too many originators, managers, and companies don’t track this important information, much less put steps in place to improve it! So, if you aren’t tracking, or know what to track, here is what I suggest you look at. Initial contact, preapproval, contract, and of course, closings. You may have different terms, but you get the idea.
Of all of these, the initial contact can be the biggest and best place to improve your process to increase your overall conversion rates. This contact sets the stage and paints the picture for the client on how you work, what is needed, and the path to be taken that will complete the process for that client that meets or exceeds initial expectations! They say that you never get a second chance to make a first impression; in the mortgage business, if the first impression is bad, you will NEVER get that second chance! Some key factors in that first contact are:
- How did they come to call you?
- Give them five minutes to share with you what they are looking to do.
- Ask them if they are looking for specific or generic information?
- If specific, share with them the documentation needed to do that and schedule a time for them to get that to you.
- Share the benefits of following your plan, and the potential consequences if they don’t.
- Schedule the next point of follow-up and preferred method of communication!
- Call the referral source and thank them for the referral and share when your next follow-up is scheduled.
How you handle that first contact matters. If you would like help with this, please just email me: This email address is being protected from spambots. You need JavaScript enabled to view it. and let’s talk about it!
Have you experienced receiving a phone call from an unfamiliar number? Nowadays, it may seem like a rhetorical question because most of us have encountered such situations. The prevalence of spam calls on our mobile devices has made it a common occurrence.
Personally, I receive these phone calls at least every few days. I often wonder about their origin and how on Earth they got my number.
How about when you scroll through social media or a website, and you come across an ad for something you checked out a few days ago. It’s an item you’re genuinely interested in, but you can’t help but wonder how or why the ad is being served to you.
This instance, along with the strange capability of Google and other software being able to read your mind by showing you ads for things you searched for momentarily weeks prior, are all in the same category. We are all familiar with the reality that organizations that we connect with in some capacity for online shopping, article reading, or more leverage a good portion of our personal information to their advantage and, in essence, to ours.
And while some may find this type of personalized advertising helpful, others find it incredibly invasive. It all goes back to privacy, but now the questions that remain are: What is privacy in today’s digitally connected world, and from a business leader’s perspective, how do we navigate this with integrity?
Our Lives and Data Get More Digital Every Day
Since the dawn of public access to the internet, we have heard that any information shared on the internet is public domain, almost as if you surrendered your autonomy to the World Wide Web. Of course, this is still true today; however, the difference between today and yesterday is that today, customers are demanding their personal data stay private while simultaneously expecting more personalized content that fits their unique preferences. What a dichotomy!
I teach organizations around the world the principles of my Anticipatory Organization® Model, where they can become positive disruptors in a world that is constantly evolving with exponential digital advancements. With the decades of research I have conducted, I continue to encourage my clients and colleagues to pay close attention to the Three Digital Accelerators that propel powerful technology into the future: computing and processing power, bandwidth, and storage.
While my Three Digital Accelerators increase organizational operation efficiency, they affect our personal lives and the information we share online as well. For instance, in today’s digital landscape, those accelerators have made it possible for us to sign up for popular subscription services that make our lives the pinnacle of convenience. These include brand name subscription services like Uber Eats and Amazon Prime and extend to include grocery delivery, music, and even your traditional email subscriptions for travel deals.
Essentially, everything we could possibly want is online at our convenience, but convenience comes with the price of our personal information.
As the Three Digital Accelerators constantly lead us into the next great digital evolution, our lives will continue to become more digitized than ever. Similarly, as we continue to sign up for more and more services, shop online in any capacity, and generally use smart devices to simplify our lives, we will continue to use our name, phone number, email, and other sensitive information while agreeing to terms and conditions without many of us actually reading the fine print.
Thus, our personal data will continue to permeate the digital world and become data that others can access and leverage.
Privacy in Digital Marketing: Is There a Line?
From the perspective of a business leader, do you feel that once an individual customer enters their data online, is it no longer their personal information?
Throughout centuries, the essence of successful business has revolved around comprehending the needs and desires of customers, then offering them the appropriate solutions. Today, the essence of business remains the same, but the vast number of organizations offering similar products and services makes the process more difficult. Enter: Marketing.
We all know, based on the previous discussion of targeted ads and autonomous sales calls, the activity of promoting and selling products or services according to research on customer expectations and needs is just as digital as how individuals buy those products and services. Add in artificially intelligent marketing tools like geofencing, where your mobile device becomes part of a system that suggests products or services near you, suddenly that line between what is personal and what is public domain gets very blurry.
In a highly digitized era where the internet is for sales, marketing, and more, it takes no effort for marketing professionals to have access to customer information, and in many cases, it is completely legal. But as specific ads are tailored to customers by leveraging their data, the responsibility of equitable marketing practice now falls on you, the business leader.
This line is drawn by you.
Agent Resource
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