RE Market Memo

Be the smartest person in the room on the real estate market so you can avoid pain and maximize profit.

Welcome to the Fidelis Wealth Builders’ RE Market Memo!

The RE Market Memo is a short summary of key real estate market data available for you to instantly get clarity on the market trend without getting lost in the noise of fake news, YouTube clickbait, or data overwhelm.

You can quickly be the smartest person in a real estate conversation by spending a few minutes on this page each week.

Summary

If you only have 30 sec 

Interest rates  staying around 7%, the pace of house sales remains lower than new listing pace, so the national supply (inventory) of houses is still growing, about the same as last year’s seasonal pace (total inventory still well below pre-pandemic level).  Has not peaked yet, however, the new listings pace is declining seasonally. 

Not sure if new listings will decline faster than sales decline (and thus still have more inventory growth).  Importantly, the percentage of listings with a price cut is 38% now, which is  normal this time of year. It had another bump up from last week.

 FL and Texas are still driving most of the rise in inventory, that is a leading indicator that there is downward price pressure with the growing inventory. Florida and Arizona are seeing prices declining.  However we have not seen price decline across country. It’s 4% higher. The median price of new pending contracts is unchanged from last week.  

Make your purchase and sale decisions based on the fact that it gets slower in most areas this 2nd half of the year.

MUST READ THIS JOBS REPORT ANALYSIS – https://www.zerohedge.com/markets/inside-most-ridiculous-jobs-report-years

If you have 2.5 more minutes then see below:

Key Stats: (from our friends at Altos, Housingwire, Jason Hartman, Joe Manussa, and others)

Last week’s SFH Inventory on Market: 653,000 (altos)
This week’s SFH Inventory on Market: 651,453 (38.5% higher than same wk last yr)

Listing volume – 57,000 new listings is 6% Less than this same wk last year.

Sales volume – 58,000 new contracts is unchanged vs. same wk last yr.

This Week’s price reductions are HIGHER to 38.3% = High, (normal is 30-35%).
(A leading indicator of buyer demand strength, and home price direction)

Last week’s Median Price of Homes in Contracts: $395,000
This Week’s Median Price of Homes in Contracts: $393,000 (3.7% higher than same wk last yr)

Last week’s SFH Median Home Price: $455,000
This Week’s SFH Median Home Price: $450,000 (unchanged vs. same wk last yr)

Last week’s Median Price of New Listings: $425,000
This Week’s Median Price of New Listings: $404,900 (1% less vs. same wk last yr)

Housing Vacancy Rate: 6.6% – very low (quarterly)

National vacancy rates in the first quarter 2024 were 6.6 percent for rental housing and 0.8 percent for homeowner housing. The rental vacancy rate was higher than the rate in the first quarter 2023 (6.4 percent) and virtually the same as the rate in the fourth quarter 2023 (6.6 percent). Source

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If you want to know how to avoid wasting time to reach amazing income in real estate WITHOUT MARKETING OR COLD CALLING that everyone else tells you to do…I will GIVE YOU the playbook we’re having for success in today’s crazy RE market.  Just click below and I’ll tell you in 20min…for free…

If you want to see how you can do it, watch this short training I did here.

It walks through exactly where we go to buy, and there are real-life examples of student deals so you can see just how much you can make when you get the right deals.

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MORTGAGE RATES & APPLICATIONS 

Because the current market relies HEAVILY on the CHANGE in mortgage rates, we’ve added this section. 

Mortgage Rate 6.87 7.00 percent July 2024
Mortgage Applications

3.90

-0.20 percent July 2024
30 Year Mortgage Rate 6.77 6.89 percent July 2024
15 Year Mortgage Rate 6.05 6.17 percent July 2024
Average Mortgage Size 405.00 405.00 Thousand USD April 2024

The average rate for a 30-year fixed mortgage fell sharply by 12 basis points to 6.77% as of July 18th, marking its lowest level since mid-March, according to Freddie Mac. This decline coincided with increasing dovish expectations for the Federal Reserve amidst recent signs of a weakening labor market and easing inflation pressures, alongside a drop in long-dated Treasury yields. A year ago, the average rate for a 30-year mortgage stood at 7.02%……………. source: Trading Economics

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Mortgage applications in the US soared by 3.9% in the third week of July, erasing the drops from the previous two weeks to mark the sharpest increase in one month, according to data compiled by the MBA. The rebound was consistent with a 13bps drop in benchmark average mortgage rates, consistent with the decline in long-dated Treasury yields in the period as lower inflation consolidated hopes of rate cuts by the Federal Reserve…….. source: Trading Economics

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DELINQUENCY RATE (as of May 2024)
We added this section to understand the leading indicator of borrower stress.  
(It will lag behind a few weeks before the data is reported)

ICE First Look: Mortgage Performance Remains Strong as Delinquencies, Foreclosures Continue to Improve in May

– The national delinquency rate fell 6 basis points (bps) year over year to 3.04% in May; still the second lowest point on record, behind 2.92% in March 2023

– A fifth consecutive monthly improvement in serious delinquencies (those loans 90+ days past due, but not yet in active foreclosure) reset what had already been a more than 18-year low


– The number of mortgage-holders who’ve missed a single payment dropped by -19K, while 60-day delinquencies edged up slightly (+4K) from April


– While inflow of borrowers newly 30 days late dropped to a one-year low, those rolling to later stages of delinquency edged higher from April and fewer delinquent loans cured to current status


– Foreclosure starts were down -6.5% from April, keeping active foreclosure inventory at the lowest level since pandemic-era moratoria were lifted in January 2022

– The total number of mortgage-holders currently in active foreclosure remains 32% below (-92K) pre-pandemic levels


– Though up slightly for the month, foreclosure sales (completions) in May were down -7.2% year over year and remain well below pre-pandemic norms


– A seasonal rise in home sales and slightly improved refi volumes pushed prepayments to their highest level since September 2022, even as rate-related headwinds persist

https://www.icemortgagetechnology.com/resources/data-reports/first-look-at-may-2024-mortgage-data

 

Fidelis’ Weekly Take:

— We’re half way through Summer with sales slower than listings, which is same every year.  The unknown is how much longer the recency bias of interest rates at 7% are going to keep buyer demand low. 

But interest rates can’t overcome job uncertainty, which is permeating the market. People want to be confident in the economy to obligate to a home mortgage.  I did notice a huge surge in multifamily starts this past period.  Clearly the big money sees more apartments, vs single family purchases. 

Also why we like heading into room rental for our own exit strategy in single family houses.  The jobs report link in my take at top is a must read, it explains native born Americans are losing hundreds of thousands of non-farm jobs to foreign workers.  These are not jobs “Americans won’t do”.  Every statistical measure of the last 3 years of governing policy have shown staggering movement in the wrong direction for prosperity.  

 

— With that said, we are still millions of houses shy of what we need for the population.  Affordability will continue to be out of reach without more building at the median and below price range.

— Hi int rates are still increasing banking stress, and the US owes 34 Trillion dollars in national debt. It was 10 Trillion in 2008.  We now pay more interest on debt than defense or medicare.  I hope that shocks you.  Are the BRICS nations going to get off the Dollar and go to gold or a digital currency? Those issues would destroy everything regardless of housing supply and demand.   Keep an eye on that, and be prepared for a stoppage in our money system.

— Please say NO to Central Bank Digital Currency (CBDC) in any form.

Passive income from RE is a shield for most of this, whereas “flipping” can stop at any time. (because it’s the same as a job). 

We appreciate you and will succeed together!

We like Altos and Attom for national market data

(but still rely most on HousingAlerts for local metrics).
Altos july 16, 2024 update.

Another great resource for RE data and trends is Joe Manausa Real Estate. Check this short about Why 3 Big Buyer Types Have Quit The Housing Market

More National Data Points To Follow

United States Total Housing Inventory

July 16 , 2024

United States Single Family Home Prices

July 16, 2024

July 16, 2024

US Historical Foreclosure Activity and Rates

US Delinquency Rate

Source: ICE

United States MBA 30-Yr Mortgage Rate

United States MBA Mortgage Applications

Affordability

Buy Where the People are Going

Where Counties are Growing[Source: U.S. Census Bureau]

Top Ten Growing States

Top Ten Declining States

Longer Term Projection

December 27, 2022    
https://www.census.gov/newsroom/press-releases/2022/2022-population-estimates.html

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