What's Up Real Estate - September
🎉 Breaking News: The Fed's "Chill Vibes" Shake Up the Real Estate Game! 🏠 Guess what, folks? The Federal Reserve decided to kick back and do...well, nothing. Rates are staying the same for now. But don't be fooled—this 'do-nothing' move has everyone talking! 📈 The Good News:The Fed sees stronger economic growth on the horizon. That means businesses booming and more money in your pocket. 🎢 The Plot Twist:While the Fed lounges, mortgage rates are inching back to recent highs. House hunting getting a bit too hot for your liking? You're not alone—fewer people are sealing deals on homes. [industry intel - NAR] 💰 What's Up with Home Prices?Despite fewer transactions, home prices aren't getting the memo—they're still on the up and up. [Zillow HVI] [ZHVI Fred] 🔨 Builder Blues: Confidence Takes a Dive 📉 Hold on to your hard hats! Builder confidence just slid for the second month in a row. According to the National Association of Homebuilders, their Housing Market Index dipped below 50. That's bearish territory, folks, and it's the first time we've seen this since December 2022. [Builder Confidence Data] 💸 HVI's Crystal Ball: $20K in Home Appreciation! 🏡 The property portal's got some news for you. They're predicting a 4.9% boost in their Home Value Index (HVI) over the next year. Got a $400K house? That's almost a $20K increase in value! Sure, home prices and mortgage rates are soaring, but so is the "cost of waiting" when home prices are this hot. [BiggerPockets] 📉 LEI's Long Slump: 17-Month Losing Streak 📊 Heads up, economic junkies. The Conference Board's Leading Economic Indicators (LEI) Index fell 0.4% in August. We're talking 17 months of decline here. If we dodge a recession after all this, we might just quit paying attention to the LEI altogether. [The Conference Board] 🤔 Why Haven't You Bought Yet? Here's What People Say: 🗣️ Budget Woes - 34% can't find homes in their price range. Rate Watchers - 18% are waiting for those mortgage rates to dip. Price Drop Hopefuls - 9% think home prices will drop. Current Home Jitters - 7% worry about selling their existing home. Bid War Blues - 5% don't want to duke it out with multiple offers. Credit Crunched - 4% are stumbling on loan approval due to credit. Down Payment Dilemma - 3% just can't save up enough. Let's face it, 1/4 of you are waiting for that magic combo: lower home prices and mortgage rates. But here's the kicker: home prices are mainly going up. Time's ticking! ⏰ 💰 Down Payment Roadblocks: What's Holding You Back? 🚧 No Issue - 47% say they're good to go. Rent or Mortgage - 23% say current housing costs are the obstacle. Credit Card Debt - 17% point to their plastic. Student Loans - 12% blame education debt. Car Loan - 11% are strapped by their wheels. Almost 30% of you are held back by credit card or car loan debt. If you're in this club, chat with a lender about debt consolidation. Even at a 7.5% mortgage rate, you could save big on interest. [NAR Barriers of Home Buyers Survey] 👀 Confidence Dips but Competition Doesn't Chill 🥊 Future Traffic: Only 11% of Realtors expect more buyers soon, and a mere 10% see more sellers entering the fray. But don't let that fool you! Homes are still flying off the shelves like hotcakes, and the competition is, well, let's call it "fierce." 🏡 August 2023 Real Estate Fast Facts 📊 Speedy Sales: Homes spent just 20 days on the market, on average. Quick Turnover: 72% of homes sold were listed for less than a month (down slightly from 74% in July). First-Timers: They made up 29% of sales (steady as she goes!). Cash is King: 27% of sales were all-cash deals (also holding steady). Above Asking: 31% of homes sold for more than the list price. Bidding Wars: Each home sold had an average of 3.2 offers. [NAR Confidence Index] My Notes 📰 Press Release Rewind: The Fed's Adjective Shuffle 🎶 Read closely and you might notice: not much has changed since the Fed's last pow-wow. But let's break down some subtle wordplay: Economy: We went from "moderate" to "solid." So we're getting steadier, folks! Jobs: "Robust" is out, and "strong" is in. Rate Hikes: Eyes are still glued to the data. Inflation: Yep, it's still a concern. 2% target remains. Rate Forecast for 2023: Steady at 5.6%, implying a +25 basis point hike before year-end. Rate Forecast for 2024: Now at 5.1%, down from 4.6%. Expect fewer cuts, arriving later. 📈 What Does It All Mean? 🤔 The Fed's not rushing to slash rates. Good news: the economy and job market are holding up. Not-so-good news: homebuyers and us real estate folks might not see relief in mortgage rates anytime soon. [Fed Press Conference] 📅 That Wraps Up September! Up Next: Buyer's Season 🏠 To all my prospective buyers: the next few months are your time to shine. With folks stepping back for holiday festivities, you'll face less competition. Translation? Stronger negotiating power on price and interest rate credits. 📊 Worried About Rates? I've Got You Covered 👌 My real estate assistant doubles as a loan officer, and we can help you snag up to a 3% buy-down on your loan. Thanks again for being awesome readers, and until next time!
Oil Prices Increase - Inflation
Higher oil prices raised headline CPI, while core CPI eased. The Fed focuses more on core for interest rates. Despite 30-yr mortgage rates over 7%, home prices still rise monthly. Inflation Oil prices recently surged, pushing the headline Consumer Price Index (CPI) up from 3.3% YoY in July to 3.7% YoY in August. However, Core CPI, which excludes food and energy, fell from 4.7% to 4.4% YoY. The Fed focuses on Core CPI, as it can't control food or energy costs. This decrease is good news, but it's still well above the Fed's 2% target. [Schroders] Please Note that Headline inflation looks at how prices for everything we buy are going up—like rent, pet food, gas, and even a doctor's visit. Core inflation looks at the same stuff but doesn't include the costs of food and energy, like gas or electricity. Retail sales went up 0.6% in August, but most of that is because of more expensive gas. If you take out gas sales, the increase is just 0.2%. Remember, these numbers don't show whether people bought more stuff, just that they spent more—so higher gas prices mean higher sales, even if people bought the same amount of gas. [Census.gov] Housing Survey In September 2023, a report showed fewer people were buying homes and sales were slower than in August. This usually happens as seasons change, but high mortgage rates over 7% and not many homes available are also making things slower. [MBS Highway] My Notes The next meeting for the Fed, who control interest rates, is on September 20. Most people—93%—think they won't raise rates, so no surprises there. But what happens next? Unlike Europe's Central Bank, our Fed probably isn't done making changes. [Federal Reserve Calendar] Recently, info on inflation and jobs has been all over the place, giving both worrywarts and optimists something to talk about. What's concerning is that some people think we'll smoothly adjust to these changes. But history shows that when the Fed raises rates, it often leads to tough economic times. The blue line represents the Fed's interest rate, while the grey bars indicate periods of recession. It usually takes 6 months or more for the economy to feel the impact of increased borrowing costs.
Making your old home feel new again
As homeowners, we all have that feeling of wanting to change things up a bit in our homes. It's not always feasible to buy a brand new home or move to a new neighborhood, but that doesn't mean you can't make your old home feel new again. Here are some tips on how to make your home feel fresh and new without breaking the bank. Lifestyle The first step in making your old home feel new again is to assess your lifestyle. Think about the way you use your home and what areas are in need of an update. Do you entertain often? Does your family spend a lot of time in the living room? Once you have identified the areas that need attention, you can start to plan your updates accordingly. Neighborhood If you're feeling bored with your home, it might be time to explore your neighborhood. Take a walk or bike ride around your area and see what new businesses have opened up. Maybe there's a new restaurant or coffee shop that you haven't tried yet. Get to know your neighbors by attending community events or starting a neighborhood potluck. By exploring your neighborhood and connecting with those around you, you can bring new energy into your home. Sellers When it comes to making your home feel new again, it's important to think like a seller. Imagine that you're putting your home on the market tomorrow. What updates would you make to make your home more appealing to potential buyers? Even if you're not planning on selling your home anytime soon, thinking like a seller can help you prioritize your updates and make your home feel new again. Low-Cost DIY Things There are plenty of low-cost DIY projects that can freshen up your home. Here are a few ideas to get you started: 1. Paint a room or an accent wall. 2. Replace old hardware on cabinets and drawers. 3. Add new throw pillows and blankets to your living room. 4. Hang new curtains or blinds in your bedroom. 5. Swap out old light fixtures for updated ones. By taking on these simple DIY projects, you can give your home a fresh, new look without spending a lot of money. In conclusion, making your old home feel new again is all about taking a fresh perspective on your home and making updates that reflect your lifestyle and personality. By exploring your neighborhood, thinking like a seller, and taking on low-cost DIY projects, you can create a home that feels brand new and exciting. So go ahead, get started, and enjoy the process of transforming your home!
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