Since many on this site may be buying or selling a home at any given time, own investment properties, or commercial real estate I'm posting this weekly update to stay current.
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Current Rates -
30 Year Conventional - High 6's
15 Year Conventional - High 5's
30 Year Jumbo - Mid 6's
30 Year FHA - Low 6's
30 Year VA - Low 6's
Increased Listings Holding Down Price Increases -
Momentum in the housing market remains muted. According to Realtor.com data, new listings surged from December to January by 37.54% to 324,016 housing units. The surge in new listings continues to increase total inventory levels, which have risen to 1,141,040 or a 17.1% rise from the previous year.
The surge in homeowners looking to get a jump on the spring homebuying season and eager to part with their home has yet to be met with sufficient demand from potential homebuyers as active listings rose 24.61% year-over-year and the median days on market rose to 73 days or an increase of 6.57% Y/Y.
The mounting disconnect between sellers and buyers has equated 10 consecutive months of year-over-year declines in median price of listings and a 27.54% increase in total listings with price decreases.
Personal Note - None of my recent buyer's have paid over list price as lender I see the contract and can see the list price in MLS - almost all are getting a lower than list offer accepted.
New Homes From Builders Also Support Increased Listings Due to Fewer Sales - See Here
Has The Market Flipped for Buyers -
Nothing last forever including "Seller Markets" in real estate. Like the old saying goes, "the worm always turns", which is applicable to real estate and about everything else except for "Aggie Football", which hasn't turned since 1939. It appears that in the majority of the country with more listings as mentioned in the segment above, that price negotiation is favoring the buyers for a change.
Now there will be anomalies in the market scattered about the country for various reasons. For example, the fires in California have taken inventory out of the market that may take years to return - that could cause prices to rise. Sidebar - I have a client selling a very-nice property in Sedona and is marketing the home in LA - smart move as getting a lot of inquiries.
America's Household Size is Shrinking -
With household size trending to a smaller size as single-person household increase will we start to see a return to smaller homes and fewer "McMansions"? Smaller homes would definitely help with our affordable-housing issue.
Product Talk -
I thought I would add a small section on different mortgage products and/or real estate tips to this weekly thread that you may not be aware of and might help you or someone you care about purchase a home.
Bank Statement Loans -
These loans are a way for self-employed borrower whose tax returns may not be a true representation of their ability to repay their mortgage. For example, most self-employed people take every expense possible to mitigate the amount of income tax they would pay without the deductions. In some cases though these deductions reduce their income to a point that they cannot qualify for a traditional mortgage payment even though their cash-flow does.
In these cases the lender takes the most recent 12 months business-bank statements, then adds up all of the deposits. They then reduce that amount by 50% to account for expenses and divide the remaining amount by 12 to get a monthly qualifying income.
For example, it a business owner's last 12 months deposits added up to $360,000 and you reduced that amount by 50% you would have $180,000 and divided that by 12 you would get a qualifying income of $15,000 a month.
There are other guidelines like how long you have been in business, they require in most cases a larger down-payment of 10-20 percent, etc.
If the spouse works a W-2 job then their W-2 income can be combined with the bank statement income. Also, if you own multiple companies the bank statement income of each business can be combined into one monthly qualifying income.
While not for everyone this portfolio product can be useful for many self-employed borrowers.
Odds and Ends -
Last week we mentioned the "Mortgage Lock-In Effect" or how people are locked into low-rate mortgages and are living in homes longer so not to give up the low rate and payment. Here is a chart of where Americans stand today with mortgage rates on their homes:
Non-Mortgage Debt is also leading to fewer homes being sold because that debt keeps a lot of people from qualifying. Unfortunately three Texas cities lead the way in this area:
First world problems in real estate - Luka, "Hey coach want to come over for dinner I just dropped "15 Large" on a new crib!" Coach, "Maybe we can get together when y'all have road game in Dallas, becasue we just traded you."
Always here to answer question ITT or send me a DM.
Also if there are any topics you would like addressed in an upcoming "Weekly Housing & Real Estate Market Thread" let me know.
If you have a girlfriend, wife, or both don't forget Valentine's Day is just a week away 😘
Hook 'Em!
MH
The data is well researched from multiple sources concerning the real estate & mortgage market.
Thus, it is fact based and only analyzing the data/trends without regard to government policy.
As I stated previously let's keep the thread informational for those that might be in the market and leave policy discussions in "The Corral".
Current Rates -
30 Year Conventional - High 6's
15 Year Conventional - High 5's
30 Year Jumbo - Mid 6's
30 Year FHA - Low 6's
30 Year VA - Low 6's
Increased Listings Holding Down Price Increases -
Momentum in the housing market remains muted. According to Realtor.com data, new listings surged from December to January by 37.54% to 324,016 housing units. The surge in new listings continues to increase total inventory levels, which have risen to 1,141,040 or a 17.1% rise from the previous year.
The surge in homeowners looking to get a jump on the spring homebuying season and eager to part with their home has yet to be met with sufficient demand from potential homebuyers as active listings rose 24.61% year-over-year and the median days on market rose to 73 days or an increase of 6.57% Y/Y.
The mounting disconnect between sellers and buyers has equated 10 consecutive months of year-over-year declines in median price of listings and a 27.54% increase in total listings with price decreases.
Personal Note - None of my recent buyer's have paid over list price as lender I see the contract and can see the list price in MLS - almost all are getting a lower than list offer accepted.
New Homes From Builders Also Support Increased Listings Due to Fewer Sales - See Here
Has The Market Flipped for Buyers -
Nothing last forever including "Seller Markets" in real estate. Like the old saying goes, "the worm always turns", which is applicable to real estate and about everything else except for "Aggie Football", which hasn't turned since 1939. It appears that in the majority of the country with more listings as mentioned in the segment above, that price negotiation is favoring the buyers for a change.
Now there will be anomalies in the market scattered about the country for various reasons. For example, the fires in California have taken inventory out of the market that may take years to return - that could cause prices to rise. Sidebar - I have a client selling a very-nice property in Sedona and is marketing the home in LA - smart move as getting a lot of inquiries.
America's Household Size is Shrinking -
With household size trending to a smaller size as single-person household increase will we start to see a return to smaller homes and fewer "McMansions"? Smaller homes would definitely help with our affordable-housing issue.
Product Talk -
I thought I would add a small section on different mortgage products and/or real estate tips to this weekly thread that you may not be aware of and might help you or someone you care about purchase a home.
Bank Statement Loans -
These loans are a way for self-employed borrower whose tax returns may not be a true representation of their ability to repay their mortgage. For example, most self-employed people take every expense possible to mitigate the amount of income tax they would pay without the deductions. In some cases though these deductions reduce their income to a point that they cannot qualify for a traditional mortgage payment even though their cash-flow does.
In these cases the lender takes the most recent 12 months business-bank statements, then adds up all of the deposits. They then reduce that amount by 50% to account for expenses and divide the remaining amount by 12 to get a monthly qualifying income.
For example, it a business owner's last 12 months deposits added up to $360,000 and you reduced that amount by 50% you would have $180,000 and divided that by 12 you would get a qualifying income of $15,000 a month.
There are other guidelines like how long you have been in business, they require in most cases a larger down-payment of 10-20 percent, etc.
If the spouse works a W-2 job then their W-2 income can be combined with the bank statement income. Also, if you own multiple companies the bank statement income of each business can be combined into one monthly qualifying income.
While not for everyone this portfolio product can be useful for many self-employed borrowers.
Odds and Ends -
Last week we mentioned the "Mortgage Lock-In Effect" or how people are locked into low-rate mortgages and are living in homes longer so not to give up the low rate and payment. Here is a chart of where Americans stand today with mortgage rates on their homes:
Non-Mortgage Debt is also leading to fewer homes being sold because that debt keeps a lot of people from qualifying. Unfortunately three Texas cities lead the way in this area:
First world problems in real estate - Luka, "Hey coach want to come over for dinner I just dropped "15 Large" on a new crib!" Coach, "Maybe we can get together when y'all have road game in Dallas, becasue we just traded you."
Always here to answer question ITT or send me a DM.
Also if there are any topics you would like addressed in an upcoming "Weekly Housing & Real Estate Market Thread" let me know.
If you have a girlfriend, wife, or both don't forget Valentine's Day is just a week away 😘
Hook 'Em!
MH
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