30YR Fixed 6.17% +0.04% 15YR Fixed 5.48% +0.03%   Best Winning Streak For Rates in 2 Years It was a critical week for financial markets and especially for rates as investors digested the latest inflation data and the Fed's smaller rate hike.  In fact, the latest inflation data could be thought of as the most important and most persistent focus for rates all year long. When it comes to measuring inflation, there are multiple economic reports that matter, but it is the Consumer Price Index (CPI) that has by far and away the biggest impact on the market.  This week's installment was important because the last installment suggested a shift  toward a slower pace of price increases.  In other words, it had the opportunity to confirm that shift or argue against it. Inflation is important for a variety of reasons, but it affects the market most directly due to its influence on the Federal Reserve's policies.  Higher inflation means more rate hikes and more rate hikes reverberate through the economy.  While the Fed Funds Rate doesn't directly dictate mortgage rates, if markets expect the Fed to hike faster than before, interest rates tend to move higher and stocks tend to move lower. In the following chart, the 10yr Treasury yield represents the "rate" side of the equation, and it is a dead giveaway that this week's inflation report was lower than expected (Dec 13th).  The chart shows stocks and rates reacting to the Fed policy implications in the first half of the week.  Then later in the week, additional weakness in stocks helped rates remain a bit lower as investors sold stocks aggressively and sought a safer haven in the bond market.   To show just how important CPI has been to shaping Fed policy expectations, the following charts the market's expectation for the Fed Funds Rate by March of 2023--roughly when the Fed is expected to hit the ceiling for this rate hike cycle.  Each instance of the past 3 CPI reports is highlighted.  The one that came out in October was higher (aka "bad for rates").  That was the report that resulted in the highest mortgage rates in 20 years a short while later.  November's report pushed back in the other direction.  Finally, this week's lower CPI number helped to confirm November's message. If the chart above looks like a big leveling-off process, mortgage rates agree.  After spiking to long term highs in October, the last two inflation reports combined to create the best winning streak since the start of the pandemic.  It was poetic justice that the current streak just narrowly beat out the summertime rate rally as that one was based on false hope from only one hopeful CPI report.   Rates may have had an even better week were it not for the influence of European markets.  For better or worse, the securities that ultimately drive rate momentum are globally interdependent to some extent.  That was a good thing in 2010-2012 when the European credit crisis drove investors into the safest havens and then again in 2014-2015 as the European Central Bank (ECB) announced and then enacted its version of the Fed's bond buying programs.   The ECB released its latest policy announcement on Thursday this week.  It hiked rates as expected, but other parts of the announcement were slightly unexpected.  Officials saw inflation rising faster than previously forecast and they moved to dial back bond holdings sooner than expected.  The result was a sharp move higher in European rates (benchmarked below by Germany's 10yr sovereign yield).  It gave pause to US yields at first, but weaker economic data on Thursday morning helped turn things around less mere minutes after the ECB announcement.  As noted on the chart above, we also had a Fed announcement this week.  It would be easy to lose it in the shuffle based on the market's fairly docile reaction.  The Fed hiked rates 0.50% as expected and made effectively no changes to their official verbiage.  The most notable development was an upgrade to the Fed's rate forecasts, which they submit at every other meeting.  We knew they'd be higher based on recent Fed speeches, but markets weren't expecting them to move up quite as much as they did.  The result was a quick but manageable pop to higher rates that lasted about an hour.  Fed Chair Powell talked rates back down--even if not intentionally--during his press conference by saying that the Fed expected inflation to begin falling more sharply in 2023. It's never possible to know exactly what rates will do in the future.  It always "depends" on a number of variables.  At present, we know that rate momentum will continue to depend on incoming inflation data.  That said, the fact that we now have 2 consecutive inflation reports showing deceleration and a similar deceleration in the pace of Fed rate hikes means we've all but certainly seen the highest rates for this cycle back in October.  That's as close to a certainty as there is in an uncertain endeavor. The upcoming weeks may be "weird" for markets and rates as many of the human beings responsible for turning the gears behind the scenes will be out on holiday or otherwise less engaged than normal.  This can lead to more random movement.  Markets will quickly be getting back to full strength by the time the jobs report comes out on the first Friday in January.  

Planning to Retire? It Could Be Time To Make a Move. If you’re thinking about retirement or have already retired this year, you may be planning your next steps. One of your goals could be selling your house and finding a home that more closely fits your needs. Fortunately, you may be in a better position to make a move than you realize. Here are a few things to think about when making that decision. Consider How Long You’ve Been in Your Home From 1985 to 2008, the average length of time homeowners typically stayed in their homes was only six years. But according to the National Association of Realtors (NAR), that number is rising today, meaning many homeowners are living in their houses even longer (see graph below): When you live in a home for a significant period of time, it’s natural for you to experience a number of changes in your life while you’re in that house. As those life changes and milestones happen, your needs may change. And if your current home no longer meets them, you may have better options waiting for you. Consider the Equity You’ve Gained Additionally, if you’ve been in your home for more than a few years, you’ve likely built up significant equity that can fuel your next move. That’s because the longer you’ve been in your home, the more likely it’s grown in value due to home price appreciation. Data from the Federal Housing Finance Agency (FHFA) illustrates that point (see graph below): While home price growth varies by state and local area, the national average shows the typical homeowner who’s been in their house for five years saw it increase in value by over 50%. And the average homeowner who’s owned their home for 30 years saw it almost triple in value over that time. Consider Your Retirement Goals Whether you’re looking to downsize, relocate to a dream destination, or move so you live closer to loved ones, that equity can help you achieve your homeownership goals. NAR shares that for recent home sellers, the primary reason to move was to be closer to loved ones. Plus, retirement played a large role for those moving greater distances. Whatever your home goals are, a trusted real estate advisor can work with you to find the best option. They’ll help you sell your current house and guide you as you buy the home that’s right for you and your lifestyle today. Bottom Line Retirement can bring about major changes in your life, including what you need from your home. Let’s connect to explore your opportunities in our local market.

Did the frequency and intensity of bidding wars over the past two years make you put your home search on hold? If so, you should know the hyper competitive market has cooled this year as buyer demand has moderated and housing supply has grown. Those two factors combined mean you may see less competition from other buyers. And with less competition comes more opportunity. Here are two trends that may be the news you need to reenter the market. 1. The Return of Contingencies Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or the inspection, in hopes of gaining an advantage in a bidding war.  But now, things are different. The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection or appraisal is down. And a recent article from realtor.com points out more sellers are accepting contingencies: “A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars, waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and 92% of home sellers are accepting some buyer-friendly terms (frequently related to home inspections, financing, or appraisals), . . .” This doesn’t mean we’re in a buyers’ market now, but it does mean you have a bit more leverage when it comes time to negotiate with a seller. The days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close. 2. Sellers Are More Willing To Help with Closing Costs Before the pandemic, it was a common negotiation tactic for sellers to cover some of the buyer’s closing costs to sweeten the deal. This didn’t happen as much during the peak buyer frenzy over the past two years. Today, data suggests this is making a comeback. A realtor.com survey shows 32% of sellers paid some or all of their buyer’s closing costs. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area. Bottom Line Despite the extremely competitive housing market of the past several years, today’s data suggests negotiations are starting to come back to the table. To find out how the market is shifting in our area, let’s connect today.

30YR Fixed 6.34% +0.05% 15YR Fixed 5.78% +0.03%   Rates Dream of Green Christmas With Help From The Fed As far as financial markets are concerned, a green Christmas is better than anything Bing Crosby could have crooned about. Green is the color that flashes when markets are improving or when interest rates are falling. Green, for lack of a better word, is good. For mortgage rates, it's been an especially difficult year.  They've risen at the fastest pace in 40 years to levels not seen for 20 years.  They've gotten their hopes up a few times only to have them crushed more and more convincingly.   Despite being downtrodden, market participants knew that the bad times couldn't last forever.  The higher rates went, the closer they were to the peak--even if that peak ended up being quite a bit higher than most anyone imagined earlier in the year.   To understand why rates went as high as they did and why there's renewed hope for a reversal, we need to remember that inflation has been the driving force.  Every time inflation surprised to the upside, rates ratcheted abruptly higher. Most recently though, inflation surprised to the downside when the most recent Consumer Price Index (CPI) data came out on November 10th.  The result was the single best day for mortgage rates on record (in terms of day-over-day movement).  This isn't the first time for such a surprise, but it's the most compelling.  It sets the stage for the next CPI report to confirm a big picture shift in the inflation narrative.  CPI comes out on December 13th--not quite Christmas, but close enough to ensure lower rates through the end of the year if it shows inflation continues to cool. Of course there's a risk that rates move in the opposite direction if inflation bounces back up.  Either way, the swings in underlying bond markets could be especially large as the Fed releases its next policy announcement on December 14th. We know the Fed will hike rates, but they'll almost certainly be hiking by a smaller amount than last time (unless inflation comes in hot).  How can we be so sure? Many Fed speakers said so last week.  Now this week, the notion was confirmed by Fed Chair Powell on Wednesday.   Rates responded by dropping sharply by Thursday morning, but the underlying bond market was having second thoughts by Friday morning owing to a strong jobs report.  Officially called "The Employment Situation," the government's big jobs report is one of the only economic reports other than CPI that consistently registers a big response in the bond market (many reports move markets, but we're talking about BIG reactions).   Both stocks and bonds reacted on Friday because both stocks and bonds are imagining what the data suggests about the Fed's course of action in 2 weeks.  We know the Fed cares about inflation first and foremost, but they've also pointed to the tight labor market as allowing them to hike rates aggressively with lower risk of adverse economic outcomes.  In other words, if job creation is still so strong, they figure they might as well hike rates even more in order to defeat inflation. We know the market was reacting to the implications for the Fed meeting because we can see correlated movement in the securities that traders actually use to bet on future Fed rate hikes (and cuts).  The following chart shows how those expectations shifted after Powell's speech on Wednesday and then after the jobs report on Friday. Stocks and bonds both gradually recovered throughout the day because markets know that the labor market is only a supporting actor in the Fed's decision.  A strong jobs market ALLOWS the Fed to push rates aggressively higher, but it won't prevent the Fed from slowing the pace of rate hikes if inflation continues to subside.  Additionally, the Fed knows it has a certain amount of tightening "in the pipeline."  That means it has already hiked rates enough that inflation and the economy should increasingly respond, but that the response is far from immediate. After all, rates may have moved sharply lower on 11/30 (this past Wednesday) and 11/10, but they're still much higher than they had been.  The overall altitude of rates still presents a headwind to economic growth.  The Fed knows it.  The market knows the Fed knows it.  And long term rates should continue to fall if the December 13th inflation data brings more evidence of the Fed's restrictive policies having the desired effect.  

If you’re a young adult, you may be thinking about your goals and priorities for the months and years ahead. And if homeownership ranks high on your goal sheet, you’re in good company. Many of your peers are also pursuing their dream of owning a home. The 2022 Millennial & Gen Z Borrower Sentiment Report from Maxwell says: “Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.” Let’s take a look at why homeownership makes the top of so many young buyers’ to-do list and what you need to consider to achieve your goals if you’re one of them. Top Motivators To Buy a Home Before you start the homebuying process, it’s helpful to know why homeownership is so important to you. The survey mentioned above sheds light on some of the top reasons why younger generations are looking to buy a home. It finds: 95% believe the cost of renting is too high 35% think owing a home is an important wealth building tool 16% seek the sense of security owning a home provides 37% plan to use it as an investment property No matter which of these resonates the most with you, know there are many financial and non-financial reasons why you may want to buy a home. While your top motivator may be different than that of your friends, they’re all equally valid and worthwhile. Key Obstacles and How To Overcome Them Whether your homeownership goals come from the heart or are driven by financial aspirations (or both), it can still be hard to know where to start when you’re looking to buy a home. From understanding the homebuying process, to getting pre-approved, and exploring down payment options, it’s a lot to wrap your head around. The same Maxwell survey also reveals key challenges for potential buyers. Thankfully, the knowledge and guidance of a trusted real estate professional can help you overcome both. Here’s a look at two of the hurdles potential homebuyers say they face: 1. The Mortgage Process Can Be Intimidating In the Maxwell study, 33.37% said one of their obstacles was that the mortgage process is confusing or difficult to understand. An article by OwnUp helps explain why the mortgage process is so challenging for buyers: “There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.” While you may be tempted to do a quick search online to find instant answers to your questions, it may not get you the information you need to understand the full picture. Especially when it comes to financial advice, you want to lean on a true expert. Having trusted professionals on your side can help you to learn what it takes to achieve your dream of homeownership. Not to mention, an expert can give you advice specific to your situation, not generic advice like you’ll find online. 2. It’s Hard To Know How Much You Need To Save In the Maxwell study, 45.75% believe they don’t have enough saved to cover their down payment or closing cost expenses. What you may not realize is that, today, there’s a growing number of down payment assistance programs available nationwide to help relieve this pressure. A report from Down Payment Resource says: “Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.” Additionally, as the housing market cools, buyers are regaining some negotiation power and more sellers are willing to work with buyers to help with closing costs.  Understanding what’s out there and the options available may help you achieve your dream of homeownership faster than you thought possible. Bottom Line If you’re serious about becoming a homeowner, know it may be more in reach than you think. Lean on trusted professionals to help you overcome challenges and prioritize your next steps.

  30YR Fixed 6.29% -0.34%   15YR Fixed 5.75% -0.23%   Mortgage Rates Drop Sharply, Hitting Lowest Levels Since Mid-September Mortgage rates had been in a holding pattern for nearly 3 weeks following the November 10th CPI inflation data.  On that single day, the average 30yr fixed rate fell by a record amount (as far as day-over-day record keeping is concerned, and we don't have daily records prior to 2009).  That took rates from the low 7s to the mid 6's in a matter of hours and there they've stayed until this morning. The timing of today's improvement depends on the lender in question to some extent.  Several lenders offered fairly aggressive improvements yesterday.  This was in response to a well-received speech from Fed Chair Powell and stronger than expected bond buying as a part of the month-end trading process (bond buying is good for rates, all other things being equal).  Those friendly events happened late enough in the day that the average lender wasn't able to adjust their rates accordingly until this morning. All that needed to happen was for the bond market to hold relatively steady overnight.  It did.  The result is easily the best day of improvement since November 10th, and one of the better days of 2022.  The average borrower would be seeing rates that are 0.25% lower versus yesterday morning at the average lender (i.e. 6.5% is now 6.25%). Friday brings the important Employment Situation (the official jobs report from the Department of Labor).  The Fed is primarily focused on inflation, but labor market data is a not-too-distant second.  If job creation comes in weaker--especially if wage growth decreases--the Fed will increasingly conclude it has less room to be aggressive in its fight against inflation without doing serious damage to the economy.  All other things being equal, that would make for another good day for rates.  Of course the opposite is also possible (i.e. if job growth surprises to the upside and wages accelerate, rates could bounce back up a bit).  The data will be released at 8:30am, which is before mortgage lenders release their rates for the day.

30YR Fixed 6.29% -0.34% 15YR Fixed 5.75% -0.23%   $726,200 is The New Loan Limit for 2023; High Cost Counties Now Over $1m If you're just here for the conforming loan limit news, $726,200 is the number for 2023.   Does this mean no one can get a mortgage for more than $726,200?  No.  The conforming loan limit is the maximum amount that can be guaranteed by Fannie Mae and Freddie Mac (the government-sponsored enterprises or GSEs).  That guarantee has advantages in terms of the loan approval process and interest rates.  There are plenty of mortgage options for higher amounts or that are not guaranteed by the GSEs, but conforming loans account for a vast majority of new mortgages. $726,200 is the base amount.  Higher cost areas have access to higher limits based on the average home prices in that area.  The county by county limits are listed separately, HERE. The highest tier is $1,089,300 (base loan limit x 1.5).     Where do these numbers come from? The Federal Housing Finance Agency (FHFA) is the regulator of the GSEs.  It publishes various home price data.  Once the data is in for the 3rd quarter (typically by late November), it is compared to the 3rd quarter of the previous year and home prices are adjusted by the corresponding amount.    In situations where home prices fall, the limit does not fall, but it will not rise again until home prices move back above the levels associated with the previous limit.  For instance, let's imagine the loan limit was $700k, but prices fell enough to drop it to $600k.  The limit would remain at $700k year after year (even if prices were rising) until prices got back above $700k. All that having been said, we're clearly not dealing with falling home prices in year-over-year terms right now.  The month's of July and August did show slight declines in monthly terms for the FHFA price index, but September bounced back.  The Case-Shiller price index, which is typically very similar to FHFA when it comes to monthly movement, continued to decline in September. In annual terms, both are still well into positive territory. The blue line in the charts above is from FHFA's monthly home price index.  The conforming loan limit is based on an expanded quarterly index which varies slightly.  Interestingly enough, the monthly data showed a decline of 1.2% during Q3 whereas the quarterly data showed an increase of 0.2%.  NOTE: that's an increase from the end of Q2 to the end of Q3.  If we're looking at Q3 2022 vs Q3 2021, the gain is 12.2% (which is why the new loan limit is 12.2% higher for 2023). Want even more detail?   The final index value for Q3's quarterly data was 369.50 versus last year's Q3 value of 329.3.  The loan limit increase the the percent change between the two of those numbers.   369.5  divided by  329.3  = 1.122077133 2022 loan limit of 647,200  x  1.122077133 = $726,208.32, rounded to the nearest $50 = $726,200. The limit goes into effect for loans acquired by the GSEs in 2023.  That typically means lenders can apply the limits immediately since it takes at least a month for a new loan to be 'delivered' to the GSEs.  Lenders tend to adopt the new limits at slightly different paces.  Frontrunners will likely announce them today.  Laggards may take a few weeks. How about FHA loan limits?  These have yet to be announced.  Last year it happened on the same day as FHFA.  In any event, the calculation is known.  FHA will be 65% of the FHFA Conforming Loan Limit or $472,030.

With the rapid shift that’s happened in the housing market this year, some people are raising concerns that we’re destined for a repeat of the crash we saw in 2008. But in truth, there are many key differences between what’s happening today and the bubble in the early 2000s. One of the reasons this isn’t like the last time is the number of foreclosures in the market is much lower now. Here’s a look at why there won’t be a wave of foreclosures flooding the market. Not as Many Homeowners Are in Trouble This Time After the last housing crash, over nine million households lost their homes due to a foreclosure, short sale, or because they gave it back to the bank. This was, in large part, because of more relaxed lending standards where people could take out mortgages they ultimately couldn’t afford. Those lending practices led to a wave of distressed properties which made their way into the market and caused home values to plummet. But today, revised lending standards have led to more qualified buyers. As a result, there are fewer homeowners who are behind on their mortgages. As Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association (MBA), says: “For the second quarter in a row, the mortgage delinquency rate fell to its lowest level since MBA’s survey began in 1979 – declining to 3.45%. Foreclosure starts and loans in the process of foreclosure also dropped in the third quarter to levels further below their historical averages.” There Have Been Fewer Foreclosures over the Last Two Years While you may have seen recent stories about the number of foreclosures rising today, context is important. During the pandemic, many homeowners were able to pause their mortgage payments using the forbearance program. The program gave homeowners facing difficulties extra time to get their finances in order and, in many cases, work out a plan with their lender. With that program, many were concerned it would result in a wave of foreclosures coming to the market. That fear didn’t materialize. Data from the New York Fed shows there are still fewer foreclosures happening today than before the pandemic (see graph below): That means, while there are more foreclosures now compared to last year (when foreclosures were paused), the number is still well below what the housing market has seen in a more typical year, like 2017-2019. And most importantly, the number we’re seeing now is still far below the number we saw during the market crash (shown in the red bars in the graph). The big takeaway? Don’t let a headline in the news mislead you. While foreclosures are up year-over-year, historical context is essential to understanding the full picture. Most Homeowners Have More Than Enough Equity To Sell Their Homes Many homeowners today have enough equity to sell their homes instead of facing foreclosure. Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home. And if they’ve stayed in their homes even longer, they may have even more equity than they realize. As Ksenia Potapov, Economist at First American, says: “Homeowners have very high levels of tappable home equity today, providing a cushion to withstand potential price declines, but also preventing housing distress from turning into a foreclosure. . . the result will likely be more of a foreclosure ‘trickle’ than a ‘tsunami.’” A recent report from ATTOM Data explains it by going even deeper into the numbers: “Only about 214,800 homeowners were facing possible foreclosure in the second quarter of 2022, or just four-tenths of one percent of the 58.2 million outstanding mortgages in the U.S. Of those facing foreclosure, about 195,400, or 91 percent, had at least some equity built up in their homes.” Bottom Line If you see headlines about the increasing number of foreclosures today, remember context is important. While it’s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years. If you have questions, let’s connect.

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If you’re a homeowner, odds are your equity has grown significantly over the last few years as home prices skyrocketed and you made your monthly mortgage payments. Home equity builds over time and can help you achieve certain goals. According to the latest Equity Insights Report from CoreLogic, the average borrower with a home loan has almost $300,000 in equity right now. As you weigh your options, especially in the face of inflation and talk of a recession, it’s important to understand your assets and how you can leverage them. A real estate professional is the best resource to help you understand how much home equity you have and advise you on some of the ways you can use it.  Here are a few examples. 1. Buy a Home That Fits Your Needs If you no longer have the space you need, it might be time to move into a larger home. Or it’s possible you have too much space and need something smaller. No matter the situation, consider using your equity to power a move into a home that fits your changing lifestyle.  If you want to upgrade your house, you can put your equity toward a down payment on the home of your dreams. And if you’re planning to downsize, you may be surprised that your equity may cover some, if not all, of the cost of your next home. A real estate advisor can help you figure out how much equity you have and how you can use it toward the purchase of your next home. 2. Reinvest in Your Current House According to a recent survey from Point, 39% of homeowners would invest in home improvement projects if they chose to access their equity. This is a great option if you want to change some things about your living space but you aren’t ready to make a move just yet. Home improvement projects allow you to customize your home to suit your needs and sense of style. Just remember to think ahead with any updates you make, as some renovations add more value to your home and are more likely to appeal to future buyers than others. For example, a report from the National Association of Realtors (NAR) shows refinishing or replacing wood flooring has a high cost recovery. Lean on a local professional for the best advice on which projects to invest in to get the greatest return on your investment when you sell. 3. Pursue Your Personal Goals In addition to making a move or updating your house, home equity can also help you achieve the life goals you’ve dreamed of. That could mean investing in a new business venture, retiring or downsizing, or funding an education. While you shouldn’t use your equity for unnecessary spending, leveraging it to start a business or putting it toward education costs can help you achieve other lifelong goals. Bottom Line Your equity can be a game changer. If you’re unsure how much equity you have in your home, let’s connect so you can start planning your next move.

Each year, homeowners planning to make a move are faced with a decision: sell their house during the holidays or wait. And others who have already listed their homes may think about removing their listings and waiting until the new year to go back on the market. The truth is many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. Here are five great reasons you shouldn’t wait to sell your house. 1. While the supply of homes for sale has increased this year, there still aren’t enough homes on the market to keep up with buyer demand. As Nadia Evangelou, Senior Economist & Director of Forecasting at the National Association of Realtors (NAR), explains: “There’s still this gap between demand and supply because we were underbuilding for many years. . . . So now we see demand is slowing, but it still outpaces supply.” 2. Serious homebuyers are out looking right now. Millennials are driving homebuying demand today, and many are eager to make a purchase. Mark Fleming, Chief Economist at First American, explains: "While not the frenzy of 2021, the largest living generation, the Millennials, will continue to age into their prime home-buying years, creating a demographic tailwind for the housing market.” 3. The desire to own a home doesn’t stop during the holidays. In fact, homes decorated for the holidays appeal to many buyers. Plus, purchasers who look for homes during the holidays are ready to buy. 4. You can restrict the showings in your house to days and times that are most convenient for you. That can help you minimize disruptions, which is especially important this time of year. 5. Rents have skyrocketed in recent years. And, many buyers are looking to escape rising rents and avoid falling into the rental trap for another year. As an article from Zillow says: “Over the next 12 months, rents are expected to grow more than inflation, the stock market and home values." Your home could be their ticket to leaving renting behind for good. Bottom Line There are still many reasons it makes sense to list your house during the holiday season. Let’s connect to determine if selling now is your best move.

⇒ If you’re thinking about buying a home, you’re likely trying to juggle your needs, current mortgage rates, home prices, your schedule, and more to try to decide if you want to jump into the market. If this sounds like you, here’s one key factor that could help you with your decision: there are more homes for sale today than there were at this time last year. According to Calculated Risk, for the week ending in November 18th, there were 47.7% more homes available for sale than there were at the same time in 2021. And having more options for your home search may be exactly what you need to feel confident about making a move. Here’s a look at where the increased housing supply is coming from so you can get a better sense of what’s happening in the market today and what it means for you. What Caused the Growth in Housing Inventory This Year? The increase we’ve seen in housing supply this year isn’t from the source you think it is. Rather than an influx of recent homeowners listing their houses for sale (known as new listings), the primary reason the supply has grown is because homes are staying on the market a bit longer (known as active listings). That’s happening because higher mortgage rates and home prices have helped moderate the peak frenzy of buyer demand, which has slowed down the pace of sales. And, as the pace of sales has eased, inventory has grown as a result. The graph below uses data from realtor.com to show that it’s active listings, not new listings, that have driven the growth we’ve seen over the past few months: And while overall inventory gains may slow down this winter due to typical housing market seasonality, you still have a chance to capitalize on the current supply. What This Means for Your Home Search Regardless of the source, the increase in available housing supply is good for buyers. More homes available for sale means you have more options to choose from as you search for your next home, and you may even have more time to consider them. So, if you tried to buy a home last year and lost out in a bidding war or just couldn’t find something you liked, this may be the news you’ve been waiting for. If you start your search today, those additional options should make it less difficult to find a home you love, especially as some other buyers pause their search this holiday season. Just remember, housing supply is still low overall, so it won’t suddenly be easy – it’ll just be less challenging than it was at this time last year. As a recent article from realtor.com says: “Despite this improvement in the number of homes actively for sale, active listings still lag their pre-pandemic levels.” The increase in housing supply helps put you in a great position to kick off the new year in your dream home. And who better to help you find it than a trusted, local real estate professional? Bottom Line If you’re ready to jump into the housing market and see what’s available in our local area, let’s connect.

If you’re thinking about selling your house, you’re likely hearing about the cooling housing market and wondering what that means for you. While it's not the peak intensity we saw during the pandemic, we’re still in a sellers’ market. That means you haven’t missed your window. Realtor.com explains: “. . . while prospective home sellers may lament that they missed their prime window, in reality, this is still a terrific time to sell. In fact, according to a recent Realtor.com® home seller survey, 95% of sellers who sold their home in the past year got more than they paid for it. Nonetheless, some of the more prominent pandemic trends have changed, so sellers might wish to adjust accordingly to get the best deal possible.” The key to success today is being realistic and working with a trusted real estate advisor who can help you set your expectations based on where the market is now, not where it was over the past few years. Here are a few things experts say today’s sellers need to consider. Be Willing To Negotiate At the peak of the pandemic frenzy, sellers held all the leverage because inventory was at record lows and buyers were willing to enter bidding wars over homes that were available. This year, the supply of homes for sale has increased as the market cooled. Even though inventory is still low overall, buyers today have more options, and with that comes more negotiation power. As a seller, that means you may see more buyers getting an inspection, requesting repairs, or asking for help with closing costs today. You need to be prepared to have those conversations. As Ali Wolf, Chief Economist at Zonda, says: “Today’s market is different than it was just six months ago. . . Sellers that want the contract to move forward should be willing to work with the buyer. . . Consider helping with the closing costs or addressing many of the items on the home inspection list.” Price Your Home at Market Value It’s not just that the number of homes for sale has grown this year. Buyer demand has also pulled back in light of higher mortgage rates. As a result, pricing your house appropriately so you can catch the eyes of serious buyers is important. Greg McBride, Chief Financial Analyst at Bankrate, explains: “Price your home realistically. This isn’t the housing market of April or May, so buyer traffic will be substantially slower, but appropriately priced homes are still selling quickly.” You don’t want to overreach with your price and deter buyers. At the same time, you don’t want to undervalue your home and leave money on the table. This is another area where an agent’s expertise comes in handy. Think About Your First Impression on Buyers Buyers have more options and are more particular about their investment since it costs more to buy a home given today’s mortgage rates. As a result, you need to make sure your house shows well. As an article from realtor.com says: “To stand out in the market, sellers should make their home attractive to buyers, which usually means some selective updates.” This could include everything from staging the home, to making small cosmetic updates, tackling repairs, or undergoing renovations. A trusted real estate professional will help you assess what may be worthwhile to do compared to other recently sold homes in your area. Bottom Line To sum it all up, your house should still sell today and move quickly if you’re realistic about today’s market. As a press release from Zillow puts it: “. . . sellers need to do things right to attract the attention of these buyers — pricing their home competitively and making their listing attractive to online home shoppers.” For expert advice on how to quickly sell your house in a shifting market, let’s connect.

This past year, rising mortgage rates have slowed the red-hot housing market. Over the past nine months, we’ve seen fewer homes sold than the previous month as home price growth has slowed. All of this is due to the fact that the average 30-year fixed mortgage rate has doubled this year, severely limiting homebuying power for consumers. And, this month, the average rate for financing a home briefly rose over 7% before coming back down into the high 6% range. But we’re starting to see a hint of what mortgage interest rates could look like next year. Inflation Is the Enemy of Long-Term Interest Rates As long as inflation is high, we’ll see higher mortgage rates. Over the past couple of weeks, we’ve seen indications that inflation may be cooling, giving us a glimpse into what may happen in the future. The mortgage market is eagerly awaiting positive news on inflation. As Ali Wolf, Chief Economist at Zonda, says: “The housing market is expected to face continued uncertainty heading into 2023 as consumers, financial markets, and policymakers work through their respective challenges in today’s economy. . . . we are watching for any additional stability in the MBS market, signs of cooling inflation, and/or less aggressive Federal Reserve action to give us confidence that mortgage rates are past their peak.” What Does This Mean for the Future of Mortgage Rates? As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow. We’ve seen nods of this over the past couple of weeks. As the Federal Reserve works to bring inflation down, mortgage rates will come down as well. Bill McBride from Calculated Risk says: “My current view is inflation will ease quicker than the Fed currently expects.” As we look toward next year, we certainly hope he’s right. Bottom Line Mortgage rates will come down – it’s just a matter of time. The hope is we continue to see more positive news on inflation, and that’ll bring mortgage rates down. This will give prospective homebuyers more buying power and lead to more homeowners throughout the country.

Ryan Skove has shared this article with you.     View  |  Download     30YR Fixed 6.63% -0.02% 15YR Fixed 6.05% -0.05%   Fed Says: Don't Get Too Excited About Rates Just Yet There's no question that last week was an exciting one for rates. On Wednesday, the average 30yr fixed was fairly close to the highest levels since 2002. The following afternoon, it had fallen more than half a percent to the lowest level in nearly 2 months--the biggest single day drop on record.   While rates are still very high relative to anything but the past 8 weeks, it was a promising step in the right direction.  It raised hopes for a bigger picture shift after the fastest rate spike in 40 years.   As the new week got underway, rates managed to hold onto their newfound gains relatively well and with minimal volatility on average.  Things may have been better were it not for a concerted effort on the part of the Fed to remind the market not to get too excited about additional declines. Why is the Fed trying to rain on our parade? First, let's examine what was said by various Fed speakers.  Here are a few examples (paraphrased): Waller: Thursday's CPI report was just one data point.  Markets are "way out in front." Harker: Inflation will take time to come down.  I don't like to base policy on a couple of headline numbers George: It would make sense to slow the pace of rate hikes next year Daly: Inflation data is good news, but "pausing" is not being discussed Waller: Inflation data makes a case for a 0.5% increase instead of 0.75% Collins: Fed has more work to do, needs to hike rates more Bullard: Fed needs to hike to at least 5%, even if inflation data remains friendly Kashkari: Some evidence of inflation plateau, but can't be persuaded by 1 month of data.  Hikes will continue into 2023 If you're thinking that's a lot of Fed members saying/thinking the same thing, you're right.  They are extremely unified in saying that more rate hikes are coming and that it will take more than 1 month of rate-friendly inflation/economic data before they would consider pausing rate hikes.   After that, they're all also tremendously unified in saying that they want to keep rates at the "pause" level for as long as possible to make sure inflation has been truly defeated.  They've also all acknowledged that such a stance involves economic pain and that is a requirement of these sorts of policy actions.  In fact, they will be measuring their success in the form of a moderate amount of economic pain.  In other words, they want to see unemployment move slightly higher and spending move slightly lower.  As perverse as that may sound, they feel the economic pain that would result from unchecked inflation would be significantly worse. That's the attitude the Fed brought to the market this week, and it was probably a good thing.  Despite all of the raining on our parade, rates managed to remain in much lower territory relative to recent highs.  Had the Fed not brought the bucket of cold water (especially Bullard.  See the next chart of Fed rate expectations for June 2023), there was a risk the market could have gotten a bit carried away, reading too much into one month of inflation data. This exuberance will continue to be a risk in an environment where rates have risen as quickly as they have in 2022 and where we know exactly which data matters most in identifying a shift (i.e. inflation data).  That said, any near term risks pale in comparison to December 13th and 14th when we'll get the next installment of the Consumer Price Index (CPI) followed by the Fed announcement. To be clear, CPI was the report that sparked the epic drop in rates last week, and has been the most important input for rates in 2022 when it comes to scheduled economic data.  The outcome of the Dec 13th report will be critical in helping the Fed lock in an amount to hike rates the following day.  Markets currently expect the hike to be 0.50%, but a hot inflation report would easily put 0.75% back on the table.  In addition to the hike itself, December is also one of 4 Fed meetings that brings the release of updated Fed rate hike forecasts--something that the market is always keen to react to. It's unclear what the rate reality will be between now and then.  We have almost a month to sit back and observe.  Much of that time will be occupied by holiday-related idiosyncrasies for financial markets.  This can add to volatility for several reasons.  To be sure though, the incoming economic data will continue to play a role in shaping the market's expectations heading into the December 13th CPI report. Not all data is created equal in this regard.  Several of this week's reports were "interesting," but they didn't necessarily have a big impact.  Existing Home Sales dropped yet again, but the negative implications are somewhat offset by an incredibly tight inventory picture and the persistence of year-over-year price gains (this doesn't mean prices aren't falling, only that they're still higher than the same month last year, which is more than prices could say for themselves in 2007, the last time sales fell at a similar pace). Adjusting for the inventory crunch, we find sales are much higher than the last major downturn, and much closer to the few years leading up to the pandemic.  The big question is whether that blue line will continue dropping until it looks like it did in 2008.  The Mortgage Bankers Association has a useful chart in this week's credit availability index to remind us why one of these things is not like the other.  It shows how free-flowing mortgage credit was prior to the meltdown, and how it is currently about as tight as it ever has been. Point being: lenders aren't out there making the same sort of reckless loans this time around--not even remotely close. Looking ahead, next week will only contain 3.5 business days for the bond market due to the Thanksgiving holiday.  During that time, there are only a handful of economic reports and all of them hit on Wednesday morning.  Traditionally, it can be a volatile week for the bond market (and thus rates), but mortgage lenders also traditionally build a bit of a cushion into rates in the days leading up to the holiday (that includes the current week for many lenders).  Even then, barring an unforeseen shock, rates would be waiting to make their bigger moves until after the Dec 13th CPI data.  Ryan Skove Real Estate Professional, Skove Real Estate Team - eXp Realty P: (732) 284-1116 M: (732) 217-7383 https://NJShoreRealtors.c... NJShoreRealtors.com SkoveRealtyEXP.com 213 NJ-35Red Bank NJ 07701 License: #2186472 This newsletter is a service of MBS Live.© 2022 MBS Live, LLC. | 19701 Bethel Church Rd. | Cornelius, NC 28031 All information provided "as is" for informational purposes only, not intended for trading purposes or financial advice. This email was sent to: [recipientemail]. Please click here to UNSUBSCRIBE. Download PDF View on Web

If you’re thinking of buying a home and living with siblings, parents, or grandparents, then multigenerational living may be for you. The Pew Research Center defines a multigenerational household as a home with two or more adult generations. And the number of individuals choosing multigenerational living has increased over the past 50 years. As you consider this option for your own home search, know it could help you on your homeownership journey and provide you with other incredible benefits along the way. Living with Loved Ones Could Help You Achieve Your Homeownership Goals There are several reasons people choose to live in a multigenerational household, and for many, the arrangement is a personal one. But according to the Pew Research Center, the top reason people choose to live together today is financial. A recent study from Freddie Mac also finds more people are choosing to buy a home together so they can save money in the homebuying process. As the study says: “. . . an increasing percentage of young adult first-time homebuyers are relying on support from older generations, including their parents, to buy a home together.” For these individuals, combining their resources can help them achieve their dream of buying and owning a home. By pooling their incomes together to make that purchase, they may be able to afford a home they couldn’t on their own. Other Key Benefits of Multigenerational Living Not to mention, living in a home with loved ones can have other benefits too, like giving you more quality time to spend together. Darla Mercado, Certified Financial Planner and Markets Editor for CNBC.com, explains how this living arrangement can help on a personal and financial level: “Residing with relatives can offer advantages . . . you can pool multiple streams of income, for instance. And in households with young children, grandparents can pitch in with child care.” If this sounds like a great option for you, it’s important to work with a trusted real estate professional to discuss your needs. They can help you navigate the process to find the right home for you and your loved ones. Bottom Line More people are discovering the benefits of multigenerational living. For the best information and help deciding what’s right for your personal situation, let’s connect and start the conversation today.

There’s no denying the housing market is undergoing a shift this season, and that may leave you with some questions about whether it still makes sense to sell your house. Here are three of the top questions you may be asking – and the data that helps answer them – so you can make a confident decision. 1. Should I Wait To Sell? Even though the supply of homes for sale has increased in 2022, inventory is still low overall. That means it’s still a sellers’ market. The graph below helps put the inventory growth into perspective. Using data from the National Association of Realtors (NAR), it shows just how far off we are from flipping to a buyers’ market: While buyers have regained some negotiation power as inventory has grown, you haven’t missed your window to sell. Your house could still stand out since inventory is low, especially if you list now while other sellers hold off until after the holiday rush and the start of the new year. 2. Are Buyers Still Out There? If you’re thinking of selling your house but are hesitant because you’re worried buyer demand has disappeared in the face of higher mortgage rates, know that isn’t the case for everyone. While demand has eased this year, millennials are still looking for homes. As an article in Forbes explains: “At about 80 million strong, millennials currently make up the largest share of homebuyers (43%) in the U.S., according to a recent National Association of Realtors (NAR) report. Simply due to their numbers and eagerness to become homeowners, this cohort is quite literally shaping the next frontier of the homebuying process. Once known as the ‘rent generation,’ millennials have proven to be savvy buyers who are quite nimble in their quest to own real estate. In fact, I don’t think it’s a stretch to say they are the key to the overall health and stability of the current housing industry.” While the millennial generation has been dubbed the renter generation, that namesake may not be appropriate anymore. Millennials, the largest generation, are actually a significant driving force for buyer demand in the housing market today. If you’re wondering if buyers are still out there, know that there are still people who are searching for a home to buy today. And your house may be exactly what they’re looking for. 3. Can I Afford To Buy My Next Home? If current market conditions have you worried about how you’ll afford your next move, consider this: you may have more equity in your current home than you realize. Homeowners have gained significant equity over the past few years and that equity can make a big difference in the affordability equation, especially with mortgage rates higher now than they were last year. According to Mark Fleming, Chief Economist at First American: “. . . homeowners, in aggregate, have historically high levels of home equity. For some of those equity-rich homeowners, that means moving and taking on a higher mortgage rate isn’t a huge deal—especially if they are moving to a more affordable city.”  Bottom Line If you’re thinking about selling your house this season, let’s connect so you have the expert insights you need to make the best possible move today.

  Ryan Skove has shared this article with you.     View  |  Download     30YR Fixed 6.64% +0.03% 15YR Fixed 6.08% +0.03%   Construction Costs, Buyer Traffic Continue to Sap Builder Confidence The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell another 5 points in November. NAHB said this measure of builder confidence in the new home market is now at 33 after 11 straight months of decline. The current reading is only 3 points higher than in April 2020 when the onset of the pandemic triggered a 42-point plunge. NAHB’s chief economist Robert Dietz said it is “Elevated interest rates, stubbornly high building material costs and declining affordability conditions that are pushing more buyers to the sidelines (and) continue to drag down builder sentiment.” Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI asks builders to describe their perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. All three HMI components posted declines in November. Current sales conditions fell 6 points to 39, sales expectations in the next six months declined 4 points to 31 and traffic of prospective buyers fell 5 points to 20. Looking at the three-month moving averages for regional HMI scores, the Northeast was down 6 points to 41, the Midwest dropped 2 points to 38, the South declined from 49 to 42 and the West posted a 5-point decline to 29. Dietz says buyer demand for new homes has weakened significantly as interest rates have risen. To bring more buyers into the marketplace, 59 percent of builders say they are using incentives, a big increase since September. For example, in the November survey, a quarter of builders reported paying points for buyers compared to 13 percent in September and mortgage rate buy-downs rose from 19 percent to 27 percent. The percentage of builders who have cut prices (an average reduction of 6 percent) has risen from 26 percent to 37 percent. Even as home prices moderate, building costs, labor, and materials — particularly for concrete — have yet to follow. To ease the worsening housing affordability crisis, Dietz says policymakers must seek solutions that create more affordable and attainable housing. “With inflation showing signs of moderating, this includes a reduction in the pace of the Federal Reserve’s rate hikes and reducing regulatory costs associated with land development and home construction.” In spite of the challenges, builder confidence is still more buoyant than during the housing crisis and Great Recession. In January 2009, the composite index stood at 8. Not until July 2012 did it climb back to its November 2022 level. Ryan Skove Real Estate Professional, Skove Real Estate Team - eXp Realty P: (732) 284-1116 M: (732) 217-7383 https://NJShoreRealtors.c... NJShoreRealtors.com SkoveRealtyEXP.com 213 NJ-35Red Bank NJ 07701 License: #2186472 https://NJShoreRealtors.com     This newsletter is a service of MBS Live.© 2022 MBS Live, LLC. | 19701 Bethel Church Rd. | Cornelius, NC 28031 All information provided "as is" for informational purposes only, not intended for trading purposes or financial advice. This email was sent to: [recipientemail]. Please click here to UNSUBSCRIBE. Download PDF View on Web    

Ryan Skove has shared this article with you.     View  |  Download     30YR Fixed 6.61% -0.04% 15YR Fixed 6.05% -0.07%   Mortgage Rates Roughly Unchanged After Last Week's Huge Drop If you're just getting caught up, last Thursday was one for the record books--at least when it comes to the daily records that exist going back to 2009.  No other day has seen as big of a drop in the average 30yr fixed mortgage rate (0.60%). The bonds that dictate mortgage rates lost quite a bit of ground today, but that didn't translate to any meaningful damage.  This speaks to the 'uncertainty premium' that oftentimes prevents lenders from dropping rates as much as the market might suggest at the end of any given week.  It's usually more noticeable before 3-day weekends, but was easily lost in the shuffle given the scope of the movement. In simpler terms, lenders had to hold something back on Thursday, even though it didn't look like it at the time.  That may have translated to even lower rates today, had the bond market made gains.  Instead, it allowed lenders to keep rates relatively unchanged even though bonds suggested a move higher. The bigger picture is more promising than it had been, but still dependent on additional data for confirmation.  The worse the economy is doing, the better rates should be able to do, as long as inflation continues to moderate.   Ryan Skove Real Estate Professional, Skove Real Estate Team - eXp Realty P: (732) 284-1116 M: (732) 217-7383 https://NJShoreRealtors.c... NJShoreRealtors.com SkoveRealtyEXP.com 213 NJ-35Red Bank NJ 07701 License: #2186472 This newsletter is a service of MBS Live.© 2022 MBS Live, LLC. | 19701 Bethel Church Rd. | Cornelius, NC 28031 All information provided "as is" for informational purposes only, not intended for trading purposes or financial advice. This email was sent to: [recipientemail]. Please click here to UNSUBSCRIBE. Download PDF View on Web

If you put a pause on your home search because you weren’t sure where you’d go once you sold your house, it might be a good time to get back into the market. If you’re willing to work with a trusted agent to consider a newly built home, you may have even more options and incentives than you realize. That may be why the National Association of Home Builders (NAHB) says the share of buyers looking for new construction is increasing: “According to the quarterly Housing Trends Report, the popularity of new construction homes is continuing to rebound . . .” Here’s a few reasons more buyers may be drawn to newly built homes. More Options To Choose from and Potential Builder Incentives When looking for a home, you can choose between existing homes (those that are already built and previously owned) and newly constructed ones. While the inventory of existing homes has increased this year, it’s still below more typical years like 2019. Currently, according to the National Association of Realtors (NAR), there is a 3.2-month supply at the current sales pace. For reference, a roughly 6-month supply is considered a balanced market, leaving us in a sellers’ market today. While it’s a smaller segment of the overall inventory of homes for sale, the supply of newly built homes has grown even more. The National Association of Home Builders (NAHB) explains: “New single-family home inventory remained elevated at a 9.2 months’ supply (of varying stages of construction). A measure near a 6 months’ supply is considered balanced.” Here’s why this matters for you. While you have more homes to choose from in either category, there’s one extra benefit of newly built homes. Because the inventory of newly built homes has grown so much, builders are motivated to sell their properties before they build more. Back in the housing crash of 2008, builders were building too many homes, and that oversupply is part of what contributed to the housing bubble bursting. Now, builders don’t want to have a surplus of inventory in their pipeline, and many are offering buyers incentives to help move that inventory along. As Doug Duncan, Chief Economist at Fannie Mae, explains: “. . . a continual increase in the number of completed homes available for sale is now occurring, with the inventories of such homes now at the highest level since July 2020. . . . This suggests to us that builders may be increasingly willing to offer more aggressive incentives and discounts to maintain sales of completed inventory.” While specifics will vary by builder and market, some buyers are seeing builders reduce prices and offer incentives. To find out what’s available in your area, lean on a trusted real estate professional. Lifestyle Benefits of Buying a Newly Built Home In addition to more supply and the potential for builder incentives, newly built homes have various benefits that may suit your lifestyle. For example, you likely won’t have as many little repairs to tackle, like leaky faucets, shutters to paint, and other odd jobs around the house. That can free up time for you to do other things you’re passionate about. Another perk of a new home is that nothing in the house is used. It’s brand new and uniquely yours from day one. You’ll have all new appliances, windows, roofing, and more. These things can help lower your energy costs, which can add up to significant savings over time. You may even have the latest and greatest technology features built into your new home. Builder sums up why some buyers today are turning to newly built homes: “For some, it’s the lure of something new and modern. For others, it’s the move-in ready experience. And now there’s another factor to consider when making this decision: technology.” If any of these benefits appeal to you, it’s time to connect with a trusted real estate advisor to learn more. Bottom Line If you’re considering a newly built home, let’s connect so you have an expert guide on what’s available in our local market. Together we’ll explore your options and the benefits of an all-new home.