The Real Estate Show

Radio Show Notes 02/02/24 Friday:

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“The Epic Conclusion to Your Week-Long Dive into Why You Should Stop Paying Rent and BUY Real Estate!"

By Eric Willner, Host of The Real Estate Show, America’s longest running daily radio show about real estate.

Welcome to The Real Estate Show – Where Your Success Begins!  This week has been all about empowering you with the knowledge and tools to step into real estate success. I'm Eric Willner, the Voice of Real Estate, and your guide to the financial freedom you deserve. Let's dive into the Friday Weekly Wrap-Up and recap why NOW is the time to buy real estate.

 Did you know? Real estate is not just a property; it's a pathway to financial freedom. This week, we emphasized the statement: 'You should stop paying rent and BUY Real Estate.' It's not just a catchphrase; it's a blueprint for your journey to wealth.

here are 5 statistics outlining some potential financial advantages of homeownership:

1. Equity Building:

• Median Sale Price Increase: According to the National Association of Realtors (NAR), the median existing-home sale price in the US increased by 10.5% from Q3 2022 to Q3 2023. While future appreciation isn't guaranteed, historically, property values have tended to increase over time, allowing homeowners to build equity with each mortgage payment.

2. Tax Benefits:

• Mortgage Interest Deduction: Homeowners in the US can deduct a portion of their mortgage interest paid from their taxable income, potentially reducing their federal tax liability. According to the Urban Institute, the average mortgage interest deduction claimed in 2022 was $5,900.

3. Potential Rent Increases:

• Average Yearly Rent Growth: According to Apartment List, the average US rent price increased by 15% year-over-year in November 2023. While market variations exist, over time, rent increases can outpace inflation, meaning fixed mortgage payments may offer long-term cost stability compared to rising rent.

4. Inflation Hedge:

• Long-term Real Estate Appreciation: Real estate historically maintains value better than cash over time, potentially acting as a hedge against inflation. According to the International Monetary Fund (IMF), global inflation is projected to decline from 8.8% in 2023 to 6.5% in 2024. While not immune to economic downturns, real estate may maintain value better than some other investments during inflationary periods.

5. Potential Rental Income (for investment properties):

• Average Rental Yield: According to Roofstock, the average rental yield for single-family homes in the US in Q3 2023 was 4.13%. This means that for an investment property, rental income could potentially contribute to covering mortgage payments and generating additional income.

Before we delve into the highlights of this week, mark your calendars for next week's FREE Workshops on Tuesday and Wednesday. Get ready to unlock the secrets of homeownership and financial mastery – simply text EDGE to 561-861-2366.

Now, let's revisit the powerful insights shared each day this week:

Monday: 'Monday On A Mission' set the stage for a transformative week.

Tuesday: 'Tuesday Tools, Tips, and Techniques' equipped you with essential tools for success. We covered the must-know factors and offered practical tips to make your real estate journey a triumph.

• Growing Trend of Retirees Renting:

• Highlighted a shift in the trend of retirees choosing to rent instead of owning homes. Cited a 2022 Freddie Mac report showing an increase from 13% to 18% of Americans aged 65 and older renting their homes since 2000.

• Diverse Motivations for Renting:

• Discussed varied reasons for retirees choosing to rent, including prioritizing flexibility, reduced maintenance responsibilities, and challenges in affording a home. Emphasized that renting may seem initially affordable but lacks wealth-building compared to homeownership.

• Financial Considerations for Retirees:

• Underlined the financial challenges of renting in retirement, especially with rising healthcare costs. Stressed that homeownership contributes to long-term wealth accumulation, providing financial security.

• Geographic Differences in Retiree Renting:

• Pointed out geographic variations in the prevalence of retired renters, with higher percentages in high-cost areas like California and Florida. Emphasized the importance of understanding market dynamics based on location.

• Potential Policy Impact and Resources:

• Raised questions about future housing policies as the number of retired renters grows. Encouraged listeners to be aware of available resources for renters, such as government programs, non-profit organizations, and online tools.

Wednesday: In the 'Wednesday Midweek Mortgage & Market Report' Edition of The Real Estate Show, the focus was on the pulse of the real estate market, highlighting why NOW is the opportune time to buy real estate, aligning with the week's theme: 'You should stop paying rent and BUY Real Estate.' Here's a detailed summary of the show:

Market Insights and Themes:

• The episode started by emphasizing the recent surge in demand for affordable housing, reflecting a growing recognition of the value of homeownership among Americans.
• The week's theme, urging individuals to transition from paying rent to owning real estate, was reiterated as a fundamental aspect of achieving Real Estate Success.

Mortgage Rates and Market Dynamics:

• The show delved into recent statistics on national 30-year mortgage interest rate trends. As of January 31, 2024, the average interest rate for a 30-year fixed mortgage was 6.96%, showing a decline of 7 basis points over the last week.
• Mortgage demand dynamics were discussed, indicating an 11% drop in applications for a mortgage to purchase a home, while applications to refinance increased by 2%.
• The Mortgage Bankers Association’s index revealed a 7.2% drop in total mortgage application volume, reflecting increased competition for a limited supply of homes.
• The average loan size for purchase applications rose to $444,100, the largest since May 2022, suggesting increased buyer competition.

Economic Scenario and Investment Opportunities:

• The show discussed an article from CNBC, exploring the current economic scenario and its implications for real estate investment. The 'Goldilocks' scenario, with strong GDP growth and easing inflation, was highlighted.
• The potential for a 'no-landing' scenario, where the economy continues to grow with high inflation, was presented as a favorable condition for real estate investment. The article discussed the Federal Reserve's role in potentially achieving a 'soft landing.'
• The contrast between a 'soft landing' and the risks associated with a 'hard landing' and recession were discussed, emphasizing the importance of favorable economic conditions for real estate investment.

Thursday: 'ATM – About The Money' delved into financial aspects. In today's 'ATM – About The Money' Edition of The Real Estate Show, we're wrapping up a fantastic week delving into the theme: "You should stop paying rent and BUY Real Estate." Here's a concise summary of today's key points:

1.    Low Inventory Pressures Rent Prices: With a national MSI of 3.3 months, a seller's market is evident, driving rent prices higher due to limited housing supply.

2.    Rising Rent Costs: National median rent for a one-bedroom surged by 15% YoY to $1,955 in November 2023, surpassing wage growth and potentially making renting less affordable.

3.    Stable Home Prices: Despite rising interest rates, the NAR predicts a 2.7% increase in home prices in 2024, offering potential long-term value compared to escalating rent payments.

4.    Interest Rates & Equity Building: While mortgage rates have risen, they remain historically low. The Federal Reserve's plan for slowed rate increases suggests potential stabilizations or reductions, impacting monthly mortgage payments. Homeownership allows equity building, while rent payments provide no such benefit.

5.    Decision-Making Considerations: Deciding between renting and buying requires evaluating factors like your financial situation, lifestyle, local market trends, and long-term plans.

The show then highlighted the widening financial divide and the importance of positioning oneself on the winning side by understanding the "Money Game." Being part of the privileged group involves financial literacy and surrounding yourself with the right team.

As we wrap up the week, TGIF means more than just 'Thank God It's Friday.' It's 'Thank God I'm Financially prepared!' Embrace the opportunities Florida's real estate market offers, and remember, every episode of The Real Estate Show is a seminar in itself.

Have a fantastic weekend! Don't just listen – use our show to start your real estate journey. Tune in every weekday to The Real Estate Show for guidance, insights, and the roadmap to your success. See you LIVE on the Monday on a Mission edition – because your success is our mission!