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 

Read my take at very bottom regarding the federal budget proposal. Sales pace of houses is increasing, but the national supply (inventory) of houses for sale is growing at a steady pace, a little faster than previous seasonal pace (still well below pre-pandemic level), because Mortgage Interest Rates have been high, just now lowering from the highest level this year.   Might not mean price decline, we don’t know yet. Home prices are still only 1% higher than last year.  Median prices of new contracts are steady, and the % of price reductions of listed houses are increasing a bit.   That is a leading indicator that there is downward price pressure with the growing inventory.  Some areas like TX and FL are seeing decline in price because they lead the nation in inventory increase.   

“Imminent crash” is clickbait. (or ignorance)  While anything CAN happen, the odds are MUCH higher that prices continue seasonally upward, especially in starter homes.  (The exception is a total monetary failure of our currency).  

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: 559,744 (altos)
This week’s SFH Inventory on Market: 568,741 (35% higher than same wk last yr) 

Listing volume – 69,000 new listings is 10% Higher than this same wk last year.

Sales volume – 72,000 new contracts is 6% Higher than this same wk last year.

This Week’s price reductions are UP to 33.7% = Low, (normal is 30-35%).
(A leading indicator of buyer demand strength, and home price direction)

Last Week’s Median Price of Homes in Contract: $399,000
This Week’s Median Price of Homes in Contract: $400,000 (4% higher than same wk last yr)

Last Week’s SFH Median Home Price: $450,000
This Week’s SFH Median Home Price: $450,000 (unchanged 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

——————————————————————–

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.

——————————————————

MORTGAGE RATES & APPLICATIONS 

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

Mortgage Rate 7.08 7.18 percent May 2024
Mortgage Applications

0.50

2.60 percent May 2024
30 Year Mortgage Rate 7.02 7.09 percent May 2024
15 Year Mortgage Rate 6.28 6.38 percent May 2024
Average Mortgage Size 405.00 405.00 Thousand USD April 2024

The average rate for a 30-year fixed mortgage dropped by 7 basis points from the previous week to 7.02% as of May 16th, reaching the lowest level in five weeks. “Mortgage rates decreased for the second consecutive week.” said Sam Khater, Freddie Mac’s Chief Economist. “Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates. The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers.” In comparison, the average rate for a 30-year fixed mortgage was 6.39% during the same period last year……… source: Trading Economics

——————————


Mortgage applications in the US edged 0.5% higher from the previous week in the period ending May 10th, extending the 2.6% jump from earlier in the month, according to data compiled by the MBA. The increase was limited despite the 10bps reduction in average mortgage rates in the period, signaling some consumers’ struggles to purchase homes in the current market. Applications to refinance a mortgage, which are more sensitive to weekly changes in rates, jumped by 5% from the previous week. On the other hand, applications to purchase a home dropped by 2%…….  source: Trading Economics

————————————————————————————

DELINQUENCY RATE (as of March2024)
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 at Mortgage Performance: Serious Delinquencies at Lowest Since Mid-2006 as Foreclosures Drop, Prepayments Rise

-The national delinquency rate ticked down 14 basis points (bps) to 3.20% in March, holding 27 bps higher than the record low in March 2023

-Historically, delinquencies fall an average -10.4% in March; conversely, months that end on Sundays – e.g., March 2024 – experience an average, if mostly temporary, upward pull of +6.9%


-Only the third such convergence in the last two decades, this March’s 4.2% drop in the delinquency rate is in line with the previous cases in which March ended on a Sunday


-Serious delinquencies (loans 90+ days past due but not in active foreclosure) dropped 24K (-5.2%) from February to hit their lowest level since June 2006


-March saw less inflow of past-due payments as well as fewer rolls to later stages of delinquency, with total cures up 9% as early-, mid- and late-stage delinquencies all saw improvement

-Even accounting for the 5.3% month-over-month rise in foreclosure starts, the month’s 26K starts was still below the average for the past 12 months


-The number of loans in active foreclosure fell to 205K in March – the fewest since January 2022 and still 28% below (-77K) pre-pandemic levels – with 5.8K foreclosures completed in the month


-Prepayment activity rose to its highest level in seven months, driven by the lower rate environment of January and early February combined the start of the spring homebuying season

 

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

 

Fidelis’ Weekly Take:

**** Major issue this week.  Call your congressional and senate reps immediately. The proposed white house budget is terrible and being voted on soon.  It is not a “rich” tax.  A few of the proposed nuggets are capital gains from 15% to 45%, removing 1031 exchange, inheriting houses will be a capital gain instead of a step up, 25% tax on unrecognized gains. Meaning you start paying tax on value increases vs actual money made. Read about the budget and make it clear any one of these are market destroyers and shouldn’t even be on the table. 

— Inventory is growing on a faster pace given interest rate increases.  The available housing inventory remains low in many markets, however, TX and FL are increasing quickest in nation and pulling the national trend up with their large influence.  FL for example has 50% more inventory of listing than last year.  The indicators all point to on “ok” market, that has stable prices.  A chart is on the Market Memo page showing the states inventory increases.

— 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.

— 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 May 14, 2024 update.

Another great resource for RE data and trends is Joe Manausa Real Estate. Check this short about New Zillow Data: US Home Prices

More National Data Points To Follow

United States Total Housing Inventory

May 14 , 2024

United States Single Family Home Prices

May 14, 2024

May 14, 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

Notifications

Can I get your feedback on this?

Can I get your feedback on this? Check out this short video on Tax Lien Flipping 101 and let us hear what you think! We're eager to build out the process and market for it, but we want to hear from you. Thanks! Corey & Tom

Need Cash?

CARES Act Relaxes Tax Rules for 401K and IRA Withdraws Many of you out there need cash, cash for expenses or cash for investments. The CARES Act does have some great nuggets to look into. For example, did you know you may be able to withdraw up to $100,000 from your...