admin – Market Updates

Powell Greenlights Lower Rates in September

admin — Mon, 26 Aug 2024 20:15:08 +0000

Fed signaled potential rate cuts in September, and mortgage rates have already dropped by 0.25%. This opens up more buying power for clients, so it’s a great time to reach out to buyers. Let’s help them take advantage of these lower rates and find the best deals!.

What You Need to Know

Data Check: 8/26/24 Applications ↓ 10.1% Sharp Drop after two weeks of increases. MBA Inventory ↑ 0.9% 704,000 Inventory growth is slowing. Altos Price Reductions ↑ 0.5% 39% Likely going over 40% in teh coming weeks Altos Rates ↓ 0.2% 6.4% Downward trend continues. MND We continue to see local markets diverge in terms of supply and demand. For Buyers: Buyers are encouraged by Powell’s recent announcement, suggesting a potential rate drop in September. Lower rates typically boost demand, making now an opportune time to act. For Sellers: Median sales prices are starting to decline, with price reductions expected to surpass 40% in the coming weeks. While buyer demand is likely to increase with lower rates, this shift may take some time. For Investors: In July, 17% of closings were investment properties (NAR). Additionally, New Home Build-to-Rent starts have risen 10% compared to the same time last year (NAHB). The market signals that now might be a good time to invest in real estate. Ask us about our Market Spotlight presentation. Each week, we assemble a series of graphics and charts you can use to help your Buyers, Sellers, and Investors make informed real estate decisions.

Finally, the News We’ve All Been Waiting For

Last Friday, Federal Reserve Chairman Jerome Powell delivered the news we’ve all been anticipating: “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” — Jerome Powell On this news, interest rates have dropped, making it an excellent time for buyers to take advantage of the current market conditions. We have several powerful tools at our disposal to help you negotiate the best deal and capitalize on this opportunity. If you’re considering a move or looking to explore your options, now is the perfect time. Let’s connect to discuss how we can make the most of these favorable conditions.

Finally a Calmer Market

admin — Mon, 26 Aug 2024 20:11:53 +0000

Rates stabilized last week, and the lower rates are driving increased buyer activity. If your clients are waiting for the perfect moment, now’s the time to act before this window closes.

What You Need to Know

Data Check: Applications: UP 16.8% this week. Buyer competition will heat up (MBA) Inventory: 698K homes on the market. Up 0.75% from last week and 40% more than last year. (Altos) Price reductions: Up to 39.4% of active inventory. Up last week. Likely trending to >40% this fall. (Altos) Rates: Up slightly to 6.6%. Complete rates below. (Mortgage News Daily) We continue to see local markets diverge in terms of supply and demand.
For Buyers: Purchase applications have risen for two consecutive weeks, with 20% more buyers in the market compared to last month. As rates drop, competition will intensify. Savvy buyers should act now to maximize their buying power.
For Sellers:
Take a page from builders. With inventory increasing and price reductions on the rise, now is the time for sellers to drive demand. The most powerful tool in this market is the temporary buydown. Explore the Envoy Buydown Calculator here.
For Investors:
According to ParcelLabs, the number of single-family homes converted to rentals within six months of sale has surged 390% since 2020. (Graphic Below) Ask us about our Market Spotlight presentation. Each week, we assemble a series of graphics and charts you can use to help your Buyers, Sellers, and Investors make informed real estate decisions.

Time to Plan for the Fall Housing Market

Now is a great time to be in the market to buy a home. Last week alone, there was a 17% increase in new buyer applications, showing that many are taking advantage of the current conditions.

According to HousingWire, the number of homes for sale continues to rise, now 41% higher than at this time last year. Additionally, over 39% of homes listed have had a price reduction, offering even more opportunities for buyers.

Mortgage News Daily reports that interest rates are more than 0.75% lower than they were last year, giving you greater negotiating power in this favorable market.
Whether you’re looking for your first home, your next home, or your dream home, we’re here to help you make the best possible deal. Let’s connect and explore the opportunities available to you.

Fed Week. Will Rates Drop?

admin — Mon, 26 Aug 2024 20:07:27 +0000

Rates stabilized last week, and the lower rates are driving increased buyer activity. If your clients are waiting for the perfect moment, now’s the time to act before this window closes. Take a look at our: Cost of Waiting Calculator

What You Need to Know

Financial Market Update

Markets Calmed Down In Advance of the Fed Announcement. That was a wild two weeks, but thankfully, things have settled down. The July Consumer Price Index (CPI), a key measure of inflation, came in as expected at 2.9%, down from last month. Since it matched expectations, interest rates remained stable. Interestingly, housing starts hit their lowest point in four years, signaling that builders are cautious about the economy. This means resale inventory is more crucial than ever, and a slowdown in construction could drive resale prices higher.

This week, the Federal Open Market Committee wraps up on Wednesday, and we’ll learn what the Fed decides on interest rates. The market is anticipating a 0.25% to 0.5% decrease, but if your clients are hoping for mortgage rates to drop, that expectation is already priced in. In the coming months, higher unemployment will likely be the key factor driving rates lower.

The last significant dip in rates lasted only two days, so we’re advising clients to lock in gains as soon as possible to avoid volatility.

We’ll now be adding the MORTGAGE NEWS DAILY RATE INDEX in this section so you can keep a close eye on the market Check out todays MND Daily Rate Index

Time to Plan for the Fall Housing Market

Now is a great time to be in the market to buy a home. Last week alone, there was a 17% increase in new buyer applications, showing that many are taking advantage of the current conditions.

Correction Week… Now Inflation Watch

admin — Mon, 12 Aug 2024 15:25:31 +0000

Rates corrected a bit last week but are still around 6.5%. With inventory climbing, now’s a great time to re-engage your buyers. We’re emphasizing the cost of waiting—take a look at our new calculator: Cost of Waiting Calculator

Data Check:
Applications: UP 6.9% this week. As expected with lower rates. We are slightly positive over the last 9 weeks. (MBA) Inventory: 693K homes on the market. Up 1.5% from last week and 40% more than last year. (Altos) Price reductions: Up to 38.5% of active inventory. Slight drop from last week. Likely trending to >40% this fall. (Altos) Rates: Huge rate drop to 6.4%. (Mortgage News Daily) We continue to see local markets diverge in terms of supply and demand.
For Buyers: Inventory is up, and rates are down—this is the current state. But this moment won’t last. Applications were up 6.9% just last week, so now is the time to act.
For Sellers:
We’re approaching the typical seasonal decline in home values, which could be more pronounced this year due to the rise in inventory. Remember, there are 40% more homes on the market now compared to the same time last year.
For Investors:
“60% of single-family landlords say they’re likely to purchase at least one investment property in the next 12 months.” – Resi Club

Financial Market Update

The Inevitable Correction Last week, rates inched back up from Tuesday to Thursday, essentially leveling off after the sharp drop following the weaker-than-expected jobs report. The primary driver was several days of weak bond sales. Despite significant swings, it was a fairly typical bounce after the previous week’s movements. This week, we’re watching the Producer Price Index (PPI) and Consumer Price Index (CPI) closely. The inflation data will be a key indicator of economic health and is likely to impact interest rates again. We anticipate volatility in the market. All eyes are on the Fed in September to see if they follow through with the expected 50 bps rate cut. However, remember that this drop is likely already priced in. If your clients are waiting for “big news,” they might be disappointed. Now could be a good time to lock in rates during this dip.

Major Rate Drop, Market Turned a Corner?

admin — Wed, 07 Aug 2024 05:24:44 +0000

It seems the interest rate market may have finally turned a corner. Rates experienced one of their best weeks in years, which is great news for buyers. We’re reaching out to every buyer we’ve spoken to in the last 90 days because their payments could drop by as much as 10%.

For Buyers: Inventory up and rates down is the story. This moment won’t last. 10% increased buying power, (or lower payments) for every buyer today versus the beginning of May.

For Sellers: Lower rates may bring more buyers to the market. But, economic uncertainty, increasing inventory remain serious headwinds. Serious sellers need to price right and offer the right incentives before winter seasonality kicks in.

For Investors: Interest rates dropped for investors as well. Every pro forma on a single-family rental improved by about 10% since early May. That is a reason to re-engage

Financial Market Update

Last Week Delivered The Fireworks The Fed The jobs report didn’t meet expectations and fell to 114k in July–well short of the 175k projection. The unemployment rate ticked up to 4.3% from 4.1%. Rates saw one of their largest one day drops in many years. What does this mean for the rest of 2024? There is a sentiment that we have waited for two years for the economy to show some weakness and it is finally happening. Inflation is trending down; unemployment is trending up. This is generally good news for rates. The market is now expecting the Fed to lower rates between 0.5 – 1% before the end of the year. The downside of economic weakness is always the lives impacted. However, for qualified buyers that have sat on the fence, now may be the time.

This week we need to tell the rates story and keep our eyes out for volatility. No big market moving news is expected.

This Week Won’t Be Quiet – Two Big Rate Movers

admin — Thu, 01 Aug 2024 17:20:16 +0000

Big week for rates: Fed announcement on Wednesday and employment data on Friday. We’re helping buyers understand the cost of waiting by using our calculator and the recent FNMA forecast. Now may be a great time to buy. Check out our calculator: Cost of Waiting Calculator

What You Need to Know

Data Check: Applications: Down 2.2% this week and the MBA Purchase Index dropped as well. (MBA) Inventory: 677K homes on the market. Largest one week gain of the year. 39% more than last year. (Altos) Price reductions: Up to 39% of active inventory. Up again last week. (Altos) Rates: Rates held steady at 6.9%. (Mortgage News Daily) We continue to see local markets diverge in terms of supply and demand.
For Buyers: Be cautious about waiting. It may feel like a buyer’s market, but FNMA’s forecast projects only a 0.2% drop in rates and a 6.6% appreciation in home values for 2024.
For Sellers:
Now is the time to be an active seller. Home prices have peaked for the year, and price decreases are on the rise. Use financing incentives and seller credits to attract buyers.
For Investors:
John Burns Research reports a new Housing-Cost-to-Income Ratio of 32.9%, while we’re currently over 43%. Housing affordability is a key driver of long-term rental growth, presenting opportunities for investors.

Buckle Up For a Wild Week Rates ended the week about where they started. Personal Consumption Expenditures, the Fed’s favorite measure of inflation, came in higher than expected, raising questions about whether the economy is really softening. Rates didn’t move much because everyone is waiting to see if this week will bring any fireworks. On Wednesday, we’ll have the Fed decision on rates. We don’t expect them to lower rates, but the markets are very interested in their perspective on September. Following the Fed meeting, we will see employment data. The market is expecting 4.1% unemployment, so keep an eye on that report. An interesting data point to share with your clients: FNMA released their July Housing Forecast, expecting rates to drop to 6.7% by the end of the year (currently around 6.9%). Make sure your buyers understand the cost of waiting. The Envoy Cost of Waiting Calculator can help.

A Welcome Quiet Week. Don’t Get Used To It.

admin — Wed, 24 Jul 2024 16:31:35 +0000

Inventory continues to climb. We’re collaborating with teams to help sell their listings using temporary buydowns and educating clients on the cost of waiting. Let me know if I can share our Envoy calculators.

What You Need to Know

Data Check: Applications: Applications up 3.9% this week, reversing a trend. Applications dropped 16% in June. (MBA) Inventory: 651K homes on the market. Down slightly for the week and up 38% from last year. Inventory continues to grow but slowing. (Altos) Price reductions: Up to 38% of active inventory. Flat from last week. (Altos) Rates: Rates dropped to 6.9%. (Mortgage News Daily) We continue to see local markets diverge in terms of supply and demand.
For Buyers: Any softening in home values should be seen as an advantage and not a trend. The lock-in effect, housing shortage, and fewer transactions make any price drops likely temporary. For Sellers:
Act like a builder. As inventory climbs and many markets soften, it’s time to consider seller concessions to drive buyer traffic and get homes sold. For Investors:
CoreLogic reports that while “attached” rents are dropping, their Single Family Rental Index shows 3% year-over-year growth.

Last Week Was Quiet, This Week Is a Test

Last week was relatively flat for rates. There were some weak bond sales, but higher-than-expected jobless claims helped temper the rate increase. The bottom line is that our rally is stalled, and rates are hovering around 7%.

Politics will be the wild card for the next few months. There is an expectation that the Fed may drop rates in September, but we expect that to be priced in over the next month. This week, we will see the Fed’s favorite measure of inflation, Personal Consumption Expenditures. This will certainly help them make their September decision and will help the bond market test resistance. The big fireworks are reserved for the following week when the Fed meets.

“90% of homeowners have rates below 5%. This is the primary reason we believe the softening market presents a great opportunity for buyers. Prices are unlikely to drop significantly due to inventory constraints, and when rates drop, we expect competition to push home values up. Savvy buyers can act now while the market is in transition.”

Lowest Inflation in Three Years

admin — Tue, 16 Jul 2024 16:10:00 +0000

Rates dropped last week following the lowest inflation reading in three years. With these recent rate drops and our lender or seller-paid buydowns, homeowners could see rates as low as 4%. This is a significant incentive for buyers on the fence. Let’s connect and strategize.

What You Need to Know

Data Check:
Inventory continues to grow but slowing. (Altos) Price reductions: Up to 38% of active inventory. Up another 0.3% last week. (Altos) Rates: Rates dropped to 6.8%. May stay below 7% this time. (Mortgage News Daily) We continue to see local markets diverge in terms of supply and demand.
For Buyers: Lower rates and higher inventory make now a compelling time to act. Home values are likely to remain strong throughout this cycle due to the lock-in effect. It’s a great opportunity to make a deal on a home.
For Sellers:
We are at a pivot point for regular seasonal corrections. Many markets are already seeing inventory growth and significant price reductions. Sellers need to act like builders and offer incentives, including seller-paid buydowns.

Financial Market Update

Inflation Shows Signs of Softening The headline inflation number dropped to 3.1%, slightly below expectations and the lowest level in three years. As a result, rates dropped heading into the end of the week. However, the Producers Price Index, a measure of inflation in the manufacturing sector, increased more than expected. While the CPI number is a good sign, we aren’t ready to celebrate the end of inflation just yet.

This week, we will see data on retail sales, housing starts, and initial jobless claims. These are not expected to move the market significantly but may cause short-term volatility.

Where do we go from here? Headlines might suggest this is the start of a downward trend in rates. However, Jamie Dimon, CEO of JP Morgan Chase, reminded us that “inflation and interest rates may stay higher than the market expects.”

We recommend discussing the cost of waiting with your potential buyers and ensuring they understand the risk of delaying their decisions.

Is The Market at a Tipping Point?

admin — Mon, 08 Jul 2024 15:08:35 +0000

The jobs market showed signs of slowing last week, which is good news for rates. This week, we’ll see inflation data. We’re helping buyers negotiate seller-paid buydowns to lower their rates by as much as 3% in the first year.

What You Need to Know

Data Check:
Applications: Applications down 2.6% this week, reversing a 3 week trend higher. (MBA) Inventory: 652K homes on the market. Up 1% last week and 28% from last year. Inventory continues to grow. (Altos) Price reductions: Up to 37.5% of active inventory. Up another 0.6% last week. (Altos) Rates: Rates remain around 7%. (Mortgage News Daily) We continue to see local markets diverge in terms of supply and demand.

For Buyers: We are nearing the seasonal tipping point for inventory and new listings. If rates drop, many markets will get very competitive. Now is a great time to buy.

For Sellers:
New listing growth is slowing, but inventory remains above last year. That’s why we’re seeing price reductions climbing earlier than usual. Rates aren’t dropping fast enough to significantly increase demand.

For Investors:
“52.3 million of the 134 million U.S. families reside in housing they don’t own. Among those renter/non-homeowner households, only 7.9 million, or 15.1%, can afford to buy an average-priced home in their local market given current mortgage rates.” This is good news for Single Family investors. (@LanceLambert Resiclub graphic below) Ask us about our Market Spotlight presentation. Each week, we assemble a series of graphics and charts you can use to help your Buyers, Sellers, and Investors make informed real estate decisions.

Financial Market Update

Economy Shows Signs of Slowing Down The jobs report last week was favorable for rates. Nonfarm payrolls increased by 206,000 more than expected, while the unemployment rate climbed to 4.1%, the highest since October 2021. Rates dropped slightly on the news. More importantly, the last few months were revised down, and the underlying data shows that the labor market is softening, which is potentially great news for interest rates. This week is another big one for rates. We have the Consumer Price Index on Thursday and the Producer Price Index on Friday. This data will give us a better view of inflation, and favorable results could lead to lower rates. The key to the next few months is helping buyers take advantage of small moves down and increased leverage.

We Expect Market Fireworks This Week

admin — Mon, 01 Jul 2024 14:31:21 +0000

Last week was relatively quiet for rates. This week could be volatile with the jobs report. Buyer sentiment is at an all-time low, but with rates dropping and inventory levels climbing, it could be a great time for opportunistic buyers. We are using the temporary buydown to lower rates as much as 3% for the first year.

Data Check:

Applications: Applications up 0.8% this week, three weeks in a row of improvement. (MBA)

Inventory: 634K homes on the market. Up 2.2% last week and 38% from last year. Inventory growth is slowing. (Altos)

Price reductions: Up to 36.9% of active inventory. Up another 0.5% last week. (Altos)

Rates: Rates remain around 7%. (Mortgage News Daily)

We continue to see local markets diverge in terms of supply and demand.

For Buyers:

Inventory grew again, and rates remain steady. If inventory growth stalls, prices may increase. Now could be a strategic time to buy.

For Sellers:
Price reductions are rising, which is unusual for this time of year. To move your home, it’s crucial to price it right.

For Investors:
According to J.P. Morgan’s Alternative Investment report, investing in single-family homes can yield 8-12%. This presents a great opportunity for diversification. (Link to JP Mortgage Report)

Financial Market Update

Bond Trading Fireworks in Store for the Week Last week brought good news on inflation as Personal Consumption Expenditures came in lower than expected. Unfortunately, end-of-month/quarter bond trading pushed rates up slightly on Friday. This week, we expect fireworks. The jobs report comes out on Friday, and labor has become the most important gauge for rates. Jerome Powell is giving a speech on Tuesday, and we have manufacturing data coming out on Monday. As a reminder, the market is closed on Thursday for Independence Day, but the bond market will be very lively. We hope to see some positive data and rates dip a bit to bring demand back to the market.