Radio Show Notes 03/20/24 Wednesday:

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"Unlocking Real Estate Secrets: Midweek Mortgage & Market Report Reveals Trends"

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 – South Florida’s #1 Real Estate Radio Show and America's longest-running daily radio show about real estate. I'm Eric Willner, known as the Voice of Real Estate and the founder of America's longest-running daily radio show about real estate. Today, we're diving into the Wednesday Midweek Mortgage & Market Report edition of The Real Estate Show, where we continue to explore why NOW is the perfect time to invest in real estate with the theme of "It’s Time to Spring into Action in Real Estate." 

PS - Did you know that investing just $100 per month with a 7%annual return could grow to over $1 million in 40 years? Starting small and letting your money grow over time can be powerful. It takes less than you think> “Small hinges swing big doors”. It does take consistency! But if you want to expedite the process, stay tuned because we've got some valuable insights coming up!

Today's show is all about "It’s Time to Spring into Action in Real Estate" and understanding how crucial it is to have a plan that leads to success in real estate. Before we dive into the details, let me remind you of this week’s special FREE Workshops:

Tuesday at 8 pm, we have the Path To Home Ownership Introduction – Online by Invitation. Just text "Home" to 561-861-2366 to join.

Then, Wednesday night at 8:30 pm, we're hosting Financial Edge University “101 Overview” – Online by Invitation. Text "Edge" to 561-861-2366 to reserve your spot.

And don't forget about Thursday's Financial Edge University Masterclass – Text "Mastery" to 561-861-2366 to learn more.

Here at The Real Estate Show, we believe in a three-pronged approach to financial success: First, everyone should aspire to become a homeowner. It's the foundation of wealth-building. Second, homeowners should have their financial house in order with a written financial/life plan. And third, everyone should aim to own a business that not only pays them but also provides tax benefits – that's where The Financial Edge comes in. We're your financial team, and we're here to guide you every step of the way.

Now, let's talk about why NOW is the time to buy real estate. We've covered this theme in our previous shows from Monday and Tuesday, but today, we're diving deeper into the headlines and news articles that directly impact wealth through affordable housing. Understanding these market dynamics is crucial for gaining independence and peace of mind in your financial journey.

But remember, it's not just about buying any property – it's about making informed decisions based on market trends, mortgage rates, and economic indicators. That's why staying informed and educated is key to achieving success in real estate. And that's what we're here to provide you with – the knowledge and expertise to make smart investment choices. It's about building wealth, securing your financial future, and ultimately achieving the lifestyle you desire. Stay tuned for valuable insights and tips on how to navigate the real estate market with confidence and success.

 

Today's national 30-year mortgage interest rate trends according to Bankrate.com

On Wednesday, March 20, 2024, the current average interest rate for the benchmark 30-year fixed mortgage is 6.90%, unchanged since the same time last week. If you're looking to refinance, the national 30-year fixed refinance interest rate is 6.85%, up 1 basis point from a week ago. Mortgage rates have shifted around but remain elevated. In 2024, experts were predicting the 30-year mortgage to slowly shift down, eventually landing under 6 percent. Mortgage rates change constantly, however, and many factors could play out between now and year-end to change those projections. Check out our mortgage rates forecast for the latest.

 

Weekly mortgage demand drops as interest rates rise again, but Fed announcement will be key for spring market (see CNBC/Real Estate)

Key Points:

·         The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.97% from 6.84%

·         Applications for a mortgage to purchase a home fell 1% for the week and were 14% lower than the same week one year ago.

·         The latest Federal Reserve rate announcement could have a significant impact on the trajectory of mortgage demand this spring.

Mortgage interest rates rose last week for the first time in three weeks. As a result, total mortgage application volume dropped 1.6% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.97% from 6.84%, with points decreasing to 0.64 from 0.65 (including the origination fee) for loans with a 20% down payment. That was the weekly average, but another index from Mortgage News Daily, which looks at daily rates, had the 30-year fixed mortgage moving back over 7% last Thursday.

“Mortgage rates increased last week as incoming data showed inflation was still hotter than expected, which stoked concerns about the timing and extent to which the Fed might be able to reduce the fed funds rates this year,” said Joel Kan, MBA’s vice president and deputy chief economist.

Applications to refinance a home loan, which are most sensitive to weekly rate changes, fell 3% compared with the previous week and were also 3% lower than the same week one year ago.

Applications for a mortgage to purchase a home fell 1% for the week and were 14% lower than the same week one year ago. Purchase demand is not as sensitive to small moves in interest rates. Demand is also coming up against high prices and very limited supply.

“With housing supply low and prices high, the average loan size for purchase applications increased to the highest level since May 2022,” Kan added.

Rates are now in the low 7% range, just shy of the 2024 ceiling hit three weeks ago. That ceiling could either remain in place or be broken Wednesday with the latest Federal Reserve announcement on interest rates and the ensuing press conference with Fed Chair Jerome Powell.

“The market is already expecting a bit of an unfriendly change this time around, but the reality could easily differ from expectations. To whatever extent it does, mortgage rates are likely to make bigger moves, for better or worse,” wrote Matthew Graham, chief operating officer of Mortgage News Daily.

 

Home prices rose 2.4 times faster than inflation since 1960s, study finds. What that means for homebuyers (see CNBC/Real Estate and others)

Key Points:

·         If home prices increased at the same rate as inflation since 1963, the median price of a typical house in the U.S. would be $177,511, according to a new research report by Clever, a real estate data company.

·         In reality, the cost of a typical house in the U.S. is nearly half a million dollars.

·         The median price for a home in the U.S. is $412,778, according to Redfin data.

 

While inflation is 10 times higher now than 60 years ago, home prices are 24 times more expensive, a new study found.

If home prices increased at the same rate as inflation since 1963, the median price of a typical house in the U.S. would be $177,511, according to a new research report by Clever, a real estate data company.

In reality, the cost of a typical house in the U.S. is closer to half a million dollars. The median price for a home in the U.S. is $412,778, according to new Redfin data.

“Today, it’s harder for adults to buy homes than it was for their parents’ generation,” said Matt Brannon, a data writer at Clever and the author of the report.

Why home price growth has outpaced inflation

While mortgage rates have contributed to high costs, supply and demand have also affected the price growth of homes in the U.S., Brannon said.

“When demand for other consumer products comes up, or when it increases, it’s usually not too hard for people to scale up supply,” Brannon said. “Whereas houses take months to build at a time.”

The average time to complete a newly built single-family home is about 9.6 months, according to the 2022 Survey of Construction conducted by the U.S. Census Bureau.

Zoning restrictions, along with prohibitive land costs, can also make it hard to even secure the opportunity to build a new home, Brannon said.

To increase housing supply, local policymakers would need to lower the barriers for builders by easing land-use and zoning regulations, which determine factors such as the maximum height of a building or the minimum size of a lot, C. Kirabo Jackson, an economist and member of the White House Council of Economic Advisers, previously told CNBC.

“Production can’t move as quickly in housing as it does in other industries,” Brannon said. “That often means the price goes up when there isn’t enough supply to meet demand.”

Proposals in play to ease home affordability

The affordability crisis for homes in the U.S. is a primary political issue for many Americans. More than half, 53.2%, of U.S. homeowners and renters say housing affordability is affecting their decision on who they plan to vote for in the upcoming presidential election, according to a Redfin-commissioned survey. Qualtrics conducted the research in February by polling 3,000 U.S. homeowners and renters.

Moreover, current housing affordability makes 64.2% of owners and renters have negative feelings about the economy, Redfin found.

In fact, affordable housing is a pressing topic for both liberal and conservative voters. The topic is ranked as No. 1 for liberals while it’s No. 3 for conservatives, according to a separate survey by the Real Estate Witch.

“It’s just something that doesn’t come up as often in polling … but when you do ask, it really resonates with people that think about how expensive housing is today,” Brannon said.

To address the issue, President Biden announced in early March as part of his budget for fiscal 2025 a plan to cut housing costs, boost supply and expand access to affordable housing.

Biden also called on Congress to pass a mortgage relief credit that would provide a $10,000 tax credit for first-time homebuyers and a similar tax credit of up to $10,000 to families selling their starter home.

“It’s encouraging that the administration is looking at a range of options to expand housing supply,” said Brannon in a statement. “Interventions like these are absolutely required if the U.S. wants to avoid an even worse reality regarding a lack of home affordability.”

In a separate action last month, the White House, the Federal Housing Administration and Ginnie Mae, the government-owned guarantor of federally insured home loans, announced an increase on loan limits and broadened lender requirements for the Title I manufactured housing lending program.

“Manufactured homes in this time of historical lack of affordability are a real option for many households,” said Susan M. Wachter, a professor of real estate and finance at The Wharton School of the University of Pennsylvania. “This change enables access to affordable financing for manufactured homes.”

In today's Wednesday Midweek Mortgage & Market Report edition, we're taking a closer look at the current state of mortgage rates and home prices, shedding light on key factors influencing the real estate market. With the theme of "It’s Time to Spring into Action in Real Estate," let's explore how these insights can empower you to make informed decisions and capitalize on opportunities.

Firstly, let's address the current average interest rates for mortgages. As of March 20, 2024, the benchmark 30-year fixed mortgage rate stands at 6.90%, remaining unchanged from the previous week. Despite experts' predictions of a gradual decline, rates have remained relatively stable, albeit elevated. Understanding these rates and their potential fluctuations is crucial for anyone considering refinancing or purchasing a home. Stay tuned for the latest updates on mortgage rates and their impact on your real estate decisions.

Next, we delve into the weekly mortgage demand trends. Despite a slight uptick in interest rates, mortgage demand experienced a decline last week, primarily driven by a decrease in applications for home purchases. The Federal Reserve's upcoming rate announcement looms large, with potential implications for the spring housing market. It's essential to stay informed about these developments to navigate the market effectively and seize opportunities as they arise.

Moving on, let's examine the staggering rise in home prices compared to inflation over the past six decades. A recent study found that home prices have outpaced inflation by a significant margin, making homeownership increasingly challenging for many Americans. While mortgage rates and supply-demand dynamics play a role in price growth, zoning restrictions and land costs also contribute to the affordability crisis. Understanding these factors is vital for policymakers and individuals alike as we strive to address housing affordability and foster economic stability.

In summary, today's insights underscore the importance of staying informed and proactive in the real estate market. Whether you're monitoring mortgage rates, assessing home prices, or advocating for policy changes, knowledge is power. By leveraging these insights and taking decisive action, you can position yourself for success in real estate and achieve your financial goals.

Remember: It’s a stone-cold fact that Real Estate is THE best investment. Period. So get yours today! Thank you for tuning in, and remember to join us again tomorrow for the "ATM Edition – About The Money." Don't just listen – use our show to embark on your real estate journey and share it with others who should own real estate.

Also, you can listen to the entire 30 minute broadcast of any day’s edition of The Real Estate Show by clicking on the audio link on that days summary post. You can also watch the Facebook Live video at www.facebook.com/TheRealEstateShow.

Want to know more? If you are serious about real estate and paying off debt, then find out more on today and every day’s episodes and learn more about Real Estate Investing and learn HOW TO by listening to The Real Estate Show with Eric Willner , Live every weekday morning at 9 o’clock (EST) on Florida’s Money Talk Radio stations WWNN AM1470, FM 95.3 and FM 96.9. You can also hear us on the free apps: iHeart Radio and TuneIn. Recorded Rebroadcasts are available 24/7 on Facebook. Please share this and our Facebook updates.

Eric Willner is the Host and Founder of The Real Estate Show, an informative show about how to buy, own, and improve real estate the right way, on autopilot. - The Automatic Landlord way. (AutomaticLandlord.com) You can reach Eric Willner at Eric@Ericwillner.com or 888-595-7779.

Also listen to the rebroadcasts on demand on Facebook.com/TheRealEstateShow 

Eric Willner is the Host and Founder of The Real Estate Show, an informative show about how to buy, own, and improve real estate the right way, on autopilot. - The Automatic Landlord way. (AutomaticLandlord.com) You can reach Eric Willner at Eric@Ericwillner.com or 888-595-7779.

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