Live On Real Estate’s 100th Episode!
It was a big week here at Hall Financial. Our in-house podcast, “Live On Real Estate” recorded the 100th episode on Wednesday! Hosts Patrick Ali and Chris Puzzuoli sat down with David Hall our owner, CEO, cheerleader, mentor and occasional host from time to time.
Top 3 Quotes from DHALL himself:
- Life is short… and I want to WIN!
- “If you aren’t embarrassed by your first launch, you launched too late”
- Being impatient for results… makes for a great CEO
Here at Hall Financial, we came from humble beginnings. David worked hard in his career. He came to a point where he wanted to take everything, he liked about the companies he has worked for and created a platform (company) for those who wanted to learn and grow in a fast-paced environment. He didn’t want to do what others were doing.
This year one of our major goals is to reach 1000 5-Star reviews by the end of 2019, and eventually reach 10,000! Why? Because we breathe MORE PERSONAL ATTENTION. It is our mission to make sure our clients are well educated and feel comfortable with huge financial transactions. Currently, we are at just over 700 5-star reviews, which puts us well on our way to this year’s goal!
You are in for a treat with this episode, you will hear David be more candid and transparent than you ever have before! Click the radio below to listen to the 100th episode!
Market Update: The Federal Reserve Holds Rates
Image Source: Investopedia
No news is good news for the mortgage industry right now. The Federal Reserve announced; rates are holding steady! This recent announcement comes just 2 months after the initial Fed meeting that resulted in the decision to drop rates and is anticipated to keep them low for the remainder of 2019. Weaker inflation and labor economic data has also aided in keeping rates low. With the excitement of rates remaining steady and purchase season in full swing, now would be an optimal time to purchase a new home. The Federal Reserve holding mortgage rates provides optimism surrounding refinancing to lower mortgage payments, removing or lowering mortgage insurance and pulling cash out for Spring home projects.
Stand Up to You. [DH Sweet 16 #16]
It’s sad we often define a goal as “too big”, leading us to settle for what’s easy because it’s safe. Goals that are considered “too big to achieve” are lies coming from our own worst enemy: our mind.
Have you ever stopped and thought, “What if I decided to think bigger?”
Too often people don’t realize their potential. It’s one of the many faults we have as humans. We stop ourselves short of greatness by settling for what’s easy and not looking outside of our comfort zone.
How many times have you stopped yourself from pursuing a life-long dream because it feels unattainable? How many times have you settled for mediocrity because you feel it’s easiest? That small-minded thinking will never get you farther than where you are right now. You want to be a doctor? Aim to be the chief of staff at a hospital. You want to be a writer? Aim to be an international bestseller. Want to be a good golfer? Aim to win the state championship by age 45. Want to be an amazing dad? Aim to be the Dad all the kids look up to and want to have around.
We set goals to drive our success, a source for our ambition. Make them great.
It’s like when you run 5 miles and you push like hell through the last leg, thinking that cramp in your side is too much to bear and the dehydration is almost overwhelming, but then you do it. You finish. What was the motivating factor? What pushed you to run through the agony? The answer: you thought bigger. You decided for a moment that your goal was bigger than your pain. In these tough moments where you think you can’t go on but you decide to push yourself beyond your limits, that is where the growth happens. These are the moments—when you think big—anything can happen.
It takes strength to think and push yourself to be bigger than what you’re likely capable of but nobody ever went anywhere without having grand thoughts and taking big leaps. That’s the key to success.
You have to think anyway, why not think big? Our brains are not static, we have thoughts that take up space all day. Manipulate those thoughts.
And that’s the epitome of David’s last Sweet 16: Think
Big. “There is always room in your life for thinking bigger, pushing limits, and imagining the impossible.” But there’s only one thing that will ever stand in your way: you. You have to be the one to choose daily that you are going to think bigger thoughts than you’ve ever thought before. You have to be the one to decide your dreams are bigger than your fears. You.
What are you going to do today to push yourself to think bigger?
Want to be great? Aim to be the individual everyone looks up to and admires. Ready to think bigger and accomplish some even bigger goals? Send us your resume and aim to do more than you’ve ever done.
Baby Boomers: Looking For Dream Retirement Homes
A lot of baby Boomers are retiring and looking to buy their retirement homes. According to the National Association of Home Builders, builder confidence has reached 76 for the 55 and older market. With the recent decline in mortgage rates, this has been particularly favorable for the demand on 55 and older housing. There could be slight challenges with the new demand of retirement homes being built for Baby Boomers. Rising construction costs and a lack of skilled labor, will present problems for builders, which could rev up cost.
For the last several weeks Mortgage Applications have been on the decline but that’s all changing. Within this past week, applications are on the rise and purchase season is picking back up. According to the Mortgage Bankers Associations, there has been a 2.7% increase compared with the previous week. Majority of new applications were from purchases. The average loan size for purchases has elevated slightly from $332,000 to $335.600.
Don’t forget before purchasing a home to take all cost into consideration, especially property tax. While property taxes range in price, they are calculated on the area you live in. According to ATTOM data solutions, property taxes have gone up on average. One of many reasons why property taxes are rising, is due to changes in the cost of government and the level funded by State taxes. Another factor in the rise of property taxes is that State and local governments are receiving less from the federal government and need to pay for all services provided by residents.
Down payments can feel like a looming cost and be the greatest financial barrier to home ownership according to research. However, there is a common misconception about the amount of money new homeowners need to put down. According to The Mortgage Report, new homeowners do not have to put much down at all. Most buyers put down only 10% in comparison to the 20% that many people think they need.
Take Care of Yourself
I want to say this loud, and clear: self-care is not selfish.
Do not let anyone tell you that it is. Even at the most basic level, taking care of ourselves lets us be able to take care of others.
Think about the directions they give you on an airplane “In case of an emergency, please put your mask on before assisting others”.
If you have nothing left to give, how can you give your best effort? You can’t. You cannot pour from an empty cup, so you must fill your cup again. How? By taking care of yourself.
So many times we burn ourselves out because we don’t know how to say no. In our culture everything moves 100 miles per minute.
And that’s okay. It’s okay to go fast. But every so often you must stop, and take time to truly evaluate your needs.
Taking care of yourself doesn’t have to mean a day at the spa, or a vacation. Sometimes it simply means saying no to that after work get together so you can fit in some extra sleep. It can mean making sure what you put in your body gives you proper nutrition and energy. It can mean taking time to spend with your family, unattached to your cell phone. The list is endless, but you can only start checking items off if you give yourself the time.
Self-care needs to be a priority, and one you should never feel guilty for focusing on.
Going Digital: Zillow offers 3D home tours
New technology is on the horizon that will make it easier to attend home tours. Zillow has created a new 3D virtual tour, that is available for consumers. Potential buyers will never have to leave their home to attend open houses again. It’s a free resource that real estate professionals can use to help them serve more clients at a lower cost.
Home prices seemed to be higher toward the beginning of the year, which has increased the Housing Price Index according to the Federal Housing Finance Agency. The FHFA monthly HPI is based off the home sale prices from Fannie Mae and Freddie Mac. The HPI excludes cash sales and jumbo loans. Across the nine census divisions, the East South-Central Division saw a 1.4% rise in February. However, the Middle Atlantic Division didn’t experience any growth at all, as there was an appreciation decline of 1.2%.
Homeowners could be tapping into a nice amount of pent-up wealth in their homes. In the last quarter of 2018, US homeowners had a collective amount of attainable equity, close to 5.7 trillion dollars. According to Corelogic, at the end of 2018, homeowners only collected nearly 10,000 in equity. Many Americans are hesitant to do cash-out refinances as rates are said to play a major role. With rates taking a nudge upwards, this has a negative effect on home-owners.
New home sales are on the rise. According to Housing Wire, home sales rise 3% above 2018 levels. The momentum of home sales growth is credited to mortgage rates staying relatively low. The Census Bureau and The Department of Housing and Urban Development analysis shows, new home sales have increased 4.5% in March from February’s revised rate of 662,000.
According to the Urban Institute, the government had made mortgage credits available in the last several months in comparison to the last 10 years. The HCAI rose at the end of 2018, which means lenders are willing to tolerate defaults and take more risks. All of which makes a good environment for loan approval.
The American Dream and the looming recession
Refinances are finally making a comeback after last year’s drought. Black Knight revealed that an estimated 3.27 million homeowners could benefit from refinancing. This is an increase year-over-year by 16% from 2018. This means a jump of candidates around 75%, with rates at a current 10-month low.
Various areas throughout the country give low-income families a chance at the American Dream. Being a homeowner gives people a chance to benefit from their communities, as well as gain wealth from their home equity. With metros becoming more expensive and having a lack of affordable starter homes, low-income residents aren’t typically able to share in the prosperity of home ownership
. To escape the high costs of homes, buyers are looking to relocate to inland markets.
With perks such as no down payment, it’s no surprise that VA loans have become increasingly more popular for first-time home-buyers. Benefits such as no mortgage insurance and strong loan servicing protections accompany this loan as well. Both prime and non-prime home-buyers using VA loans are reporting less early delinquency rates.
With a confident forecast of 2% economic growth for the next year, JP Morgan Chase chief economist Anthony Chan is dismissing concerns over a looming recession. During the Chicago Agent Magazine’s Accelerate Summit at the Chicago Merchandise Mart last Tuesday, he predicted that while it won’t be as exponential as last year, the economy will still see growth.
Purchase season, who has the power?
Realtor.com just provided data that reveals Millennials are finally ready to dominate the market. In January 2017, Gen X finally gave up its spot at the top for the most new mortgages. Millennials have held this position strong as their share of the mortgage market continues to rise. At the end of 2018 they were responsible for 45% of all new mortgages. However, while they are taking on larger mortgage payments, their down payments are significantly lower. The average for Millennials was only 8.8% while Gen X boasted an 11.9%.
Roofstock is a real estate platform for buying and selling single-family rental homes. The company just announced that is it introducing a new program that will allow consumers to invest in a share of a single-family rental home without having to act as the landlord. With this new program investors can reap the reward of property ownership without the risk. Roofstock itself will be responsible for the financing, the insurance, property management, asset management, and the leasing. Profits from investment will be price appreciation, along with tax benefits and potential dividends. Investments can start as low as $5000.
According to LendingTree, 86.5% of mortgages borrowers now have a rate under 5% regarding a 30-year fixed. The most common rate offered was a 4.625%, which accounted for 19.2% of borrowers. This is notably below 2018. In 2018 87.3% of purchase mortgages were given a rate under 5%.
Over the past week purchase applications have rose 2% after four consecutive declines. This is also increased 2.5% from last year. With interest rates remaining low, there is certainly incentive for not only purchasing, but for refinancing as well. The refinance index just moved forward 6% from the previous week, while the purchase index moved forward 7%. This is a solid 3% higher than where the index was in 2018.
Lackluster Home Sales and Baby Boomers
In an analysis of 54 metropolitan areas, RE/MAX National Housing Report has conveyed the largest inventory increase in a decade. Although home sales themselves have scaled back by 11% on an annual basis, the increase in inventory has averaged 6% year-over-year. This greatly improves the market as there was a multi-year scarcity of homes for sale. Compared to just last year, January which is typically a slower month for home sales, had an improvement of .5 overall.
Baby Boomers continue to retire in waves without adequate savings to support themselves and their family during their golden years. It is becoming extraordinarily clear that the country is on the brink of a retirement crisis. As health care costs continue to skyrocket and pensions dwindle, Social Security is simply insufficient for the longevity of this generation. This all sounds doom and gloom, until it’s pointed out that many Americans are literally sitting in a pile of cash; their homes. Capitalizing on the equity of one’s home can solve many later in life money issues.
The Department of Housing and Urban Development announced its plan for awarding $10 million in “sweat equity” grants to nonprofit organizations. The funding is sourced from HUD’s Self-Help Home-ownership Opportunity Program. The actual money in combination with the labor from both volunteers and home-buyers will lower the overall cost of home-ownership. A minimum of 50 hours is required for a single ownership household, and the hours are doubled for a household of two. Community service is another requirement for eligibility. During the initial round of grants awarded more than half of the capital, around $5.3 million is going to Habitat for Humanity.
While inventory is at a decade high, the affordability of homes for sale on the market is at a decade low. With only 56.6% of homes being affordable for the country’s median income, the National Association of Home Builders is calling on policymakers to make some changes. The Chief Economist of the NAHB, Robert Dietz indicates that wage growth is under performing while home appreciation continues to rise.
The U.S. Census Bureau’s most recent American Community Survey reported homeowners are currently spending more money per month than renters in all 50 states. This data was compiled tracking the median housing costs from 2013-2017. Costs such as mortgage payments, home insurance, property taxes and maintenance are making it far more expensive to own a home. However, experts say while renting saves money month to month it will not pay off in the end. Investing in a home can increase the home’s equity and look to put cash back in your pocket. A mortgage is a major expense, but once it is dropped off the monthly spending homeowners can expect a significant increase in their savings.