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Category: Mortgage News

Mortgage Market Update (4/22/24)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates are flat but volatile week-over-week after surging much higher the week prior.
  • The pressure for higher rates was caused by a strong jobs report, more troubling inflation data, and a higher consumer spending.
  • The odds for the first rate cut by the Fed’s July meeting has now fallen below 50%.


Consumer Price Index (CPI)

  • The monthly report showed inflation was much hotter than expected in March, continuing a trend we’ve seen in recent months.
  • Rising energy, automobile insurance, and shelter costs were the main contributors to the increase in inflation.
  • Annual inflation still remains below the peaks in 2022, but stubbornly high inflation readings will likely delay the Fed’s timing for rate cuts this year.


Home Builder Sentiment

  • The most recent Home Builder Sentiment report by NAHB showed that sentiment among builders remains in positive territory.
  • Internal components of the report show that buyer traffic and current sales expectations ticked higher.
  • Forward looking sales expectations have softened a bit due to higher rates as some buyers remain on the fence.
  1. MORTGAGE RATES FLAT – Rates are relatively unchanged week-over-week but the daily changes have been volatile.
    https://www.mortgagenewsdaily.com/…
  2. RATE CUTS DELAYED – The Fed Funds Rate could stay higher for longer if inflation persists.
    https://www.morningstar.com/…
  3. WHAT HOMEBUYERS WANT – A recent study shows that a vast majority of homebuyers are looking for a home with at least one home office.
    https://www.eyeonhousing.org/…
  4. HOME PRICES KEEP CLIMBING – Higher rates are keeping a lid on housing supply and putting pressure on home price appreciation.
    https://www.housingwire.com/…

Rent Costs Are Increasing

Posted on by Jon Dao

In recent years, the rental market has seen a significant trend: rent prices are steadily climbing year after year. According to a recent CoreLogic Index for US Single-Family Rent, February 2024 marked the highest annual increase in the last 10 months, with US single-family rents surging by 3.4% year-over-year. Many large cities, in particular, have witnessed spikes of over 5%, putting a strain on renters’ budgets as they also grapple with high inflation.

As rent prices continue to soar, many individuals and families are grappling with the question of whether renting or owning a home is the better financial choice. The answer becomes increasingly clear when considering the broader economic landscape and the long-term benefits of homeownership. In fact, data from the Federal Reserve reveals that the median net worth of homeowners is a staggering 40 times greater than that of renters.

Benefits of Owning A Home

  • Owning a home provides stability and predictability in housing expenses. Unlike renting, where landlords can raise rents at their discretion, homeowners enjoy fixed monthly payments, consisting of principal and interest, that do not fluctuate over time. This stability not only offers peace of mind but also serves as a hedge against inflation, as the cost of housing remains consistent regardless of economic conditions.
  • Homeownership enables individuals to build equity over time and leverage their asset. Home prices have historically appreciated, increasing in value in 74 out of the last 82 years. Additionally, as mortgage payments are made, homeowners accumulate equity in their property, which can then be tapped into for various purposes, such as funding home improvements, financing education, or even investing in additional real estate properties. This ability to leverage one’s home as an assets opens up a world of financial opportunities and contributes to long-term wealth accumulation.

In conclusion, as rent prices continue to rise annually, the case for homeownership as a superior investment becomes increasingly compelling. Not only does homeownership offer the potential for significant wealth accumulation, but it also provides stability, predictability, and the opportunity to leverage one’s assets for further financial growth. Aspiring homeowners should consider these factors carefully when making their housing decisions, as owning a home represents not only a roof over one’s head but also a pathway to financial security and prosperity.

Mortgage Market Update (4/8/24)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates increased noticeably on Monday and are higher on a week-over-week basis.
  • The increase in rates was due to higher than expected numbers for the S&P and ISM manufacturing indices, which also mentioned higher prices in their reports.
  • Prices are crucial due to the persistent inflationary pressures, and if they fail to revert to the downward trend it will make it hard for the Fed to want to cut rates.


Personal Consumption Expenditures (PCE)

  • This is the Fed’s preferred measure of inflation and its goal is for the Core reading, which strips out volatile food and energy prices, to be at 2%.
  • Last week’s release of data showed that the Core headline reading fell to 2.8%, but the progress lower has been slowing.
  • With future data projecting a slow progress towards 2% for Core PCE, it may take weaker labor market data before the Fed cuts rates.


BLS Jobs Report

  • March’s job growth roared in above forecasts, as the BLS reported that 303K new jobs were created.
  • 68% of the job gains came from three sectors: Leisure & Hospitality (49,000), Government (71,000), and Education & Health Services (88,000)
  • Revisions to the data for January and February added an additional 22K jobs to those months combined.
  • Unemployment rate declined to 3.8%.


Case-Shiller Home Price Index

  • The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices rose 6% year-over-year in its most recent report for January 2024.
  • The 6% annual rate is the fastest increase since 2022 and all 20 cities in its composite index saw annual increases for the second straight month.
  • Home values are expected to remain supported throughout 2024 as housing demand remains high.
  1. RATES MOVE HIGHER EARLY IN WEEK – The concern for higher prices and inflation after Monday’s manufacturing data pushed rates higher early in the week.
    https://www.mortgagenewsdaily.com/…
  2. ISM INDEX TURNS POSITIVE – A barometer of business conditions at U.S. manufacturers turned positive in March for the first time in 17 months.
    https://www.marketwatch.com/…
  3. BABY BOOMERS PLAN TO STAY IN HOMES – More than three-quarters of baby boomers plan to stay in their home as they grow older.
    https://www.businesswire.com/…
  4. HOUSING MARKET STAYS TIGHT – New home listings are down to start the Spring market, but competition remains fierce as demand is still high.
    https://www.mpamag.com/…

FCC Closes The Lead Generation Loophole

Posted on by Jon Dao

You can read our previous blog post on trigger leads and how to reduce them by CLICKING HERE.

In the world of mortgage lending, trigger leads have long been a point of contention. While some praise them for their potential to foster competition and secure better rates for applicants, most oppose them for inundating borrowers with unwanted solicitations. However, developments in regulations over the past few years are refining rules for trigger leads in the pursuit of stronger data privacy and consumer protections. Most recently, the FCC announced a new ruling on December 13, 2023 that will effectively close the “lead generator loophole.”  

The FCC’s adopted rule to close the lead generator loophole marks a significant change in the way consumer information is shared with businesses through comparison shopping websites. Under this rule, consumers must provide individual consent for their information to be shared with each business, effectively closing the loophole that allowed for the sale of a single lead to multiple businesses at once. This move aims to address consumer frustrations with receiving an overwhelming number of calls and texts after submitting an online lead.

How Will This Ruling Impact Borrowers and Businesses?

  • Mortgage applicants can expect relief from the inundation of solicitation calls. The previous influx of unwanted calls and texts from solicitors has been a source of frustration for many applicants, but the FCC’s actions aim to mitigate this issue, ultimately enhancing the borrower experience.
  • Requiring businesses to obtain one-to-one consent before contacting new leads. The rule will likely reshape lead strategies for businesses built on this type of lead generation model and challenge the operational models of comparison-shopping sites due to compliance regulations.

Link to FCC Announcement

Mortgage Market Update (3/25/24)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Last week’s comments on rate projections by the Fed Chair, Jerome Powell, retained the Fed’s previous expectation of 3 rate cuts by the end of this year and gave the forward-looking markets something to be hopeful for, which led to a decrease in mortgage rates.
  • The labor market has been showing signs of weakness with the unemployment rate ticking up.

Inflation Higher Than Expected

  • Recent inflation data for both the Consumer Price Index (CPI) and Producer Price Index (PPI) came in higher than expected.
  • The month-over-month changes of 0.4% in CPI and 0.3% in PPI imply an annualized reading of 4.8% and 3.6%, respectively (the Fed’s target is 2% for core readings).
  • Inflation is the biggest concern for interest rates, so it was no surprise to see the Fed unwilling to cut rates just yet.

March Fed Meeting

  • The Fed left rates unchanged following their meeting that concluded today for the fifth straight time, but did acknowledge the recent higher inflation readings could be a result of seasonality that was impacting the data.
  • Federal Reserve Chair Jerome Powell stated that any adjustments to the policy rate would depend on incoming data and the evolving economic outlook.
  • The Fed’s dot plot showed they expect to cut rates three times in 2024 with the Fed Funds Rate decreasing to 4.6%.
  1. RATES IMPROVE AFTER FED MEETING – Mortgage rates have trended higher over the last week due to inflation reports, but comments by Jerome Powell did help ease concerns.
    https://www.mortgagenewsdaily.com/…
  2. FED HOLDS RATES STEADY – The Fed maintained its Fed Funds Rate following its two-day policy meeting as expected, and provided their thoughts on the recent inflation readings.
    https://www.cnbc.com/…
  3. BUYERS’ DESIRED HOME SIZES – A NAHB study shows that buyers want smaller sized homes than they did 20 years ago.
    https://www.eyeonhousing.org/…
  4. NAR SETTLEMENT MYTHS – Debunking some of the myths from the recent NAR settlement agreement.
    https://www.housingwire.com/…

The Importance of Buyer Agent Representation

Posted on by Jon Dao

Just as you would want a listing agent to help you maximize the sale of your home, navigating the intricate world of real estate demands the guidance of a buyer’s agent. After all, purchasing a home stands as one of the most significant financial decisions one can make. Amidst the myriad of decisions, paperwork, and negotiations, having trusted and knowledgeable professionals by your side can make all the difference in helping you avoid costly mistakes and missed opportunities. In this blog post, we’ll delve into the crucial role of a buyers agent in the home buying process and explore how their collaboration with mortgage lenders ensures a smooth and informed journey towards homeownership.

Expertise & Knowledge

One of the standout advantages of having a buyer’s agent by your side is their profound understanding of the local real estate market. They know the ins and outs of neighborhoods, property values, and current market trends. Additionally, they offer valuable insights into what it means to be a homeowner and provide education on topics such as insurance and utilities, ensuring you’re well-informed every step of the way.

Guidance & Support

Buyer’s agents are more than just property tour guides. They serve as trusted advisors, listening to your needs and preferences and assisting you in finding the perfect home. From scheduling viewings to gaining access to properties, they handle the logistics, making the process smoother and more efficient.

Negotiation & Advocacy

When it comes to negotiations, buyer’s agents are your advocates. With your best interests in mind, they navigate the intricacies of the negotiation process, ensuring you secure the best possible deal. Their keen eye for detail allows them to evaluate the value of a home relative to the local market, spot potential issues on the property, and advocate for necessary repairs or adjustments.

Example: Jon and Jane finally found a home they loved and were willing to offer $25,000 over the asking price. Their agent, however, suggested they only offer the asking price after performing a comparative market analysis (CMA) that calculates a home’s value based on the recent sales of similar real estate in the area. In the end, the sellers accepted Jon and Jane’s offer at the asking price and saved them the additional amount they were willing to include.

Orchestrating The Transaction

Buying a home involves a multitude of moving parts, from putting together the offer to coordinating with lenders and sellers. Buyer’s agents serve as conductors, guiding you through each stage of the transaction with clarity and expertise. They demystify the home buying process, ensuring you understand every document and decision along the way.

In conclusion, the significance of having a buyer’s agent in the home buying process cannot be overstated. Their expertise, guidance, and advocacy are invaluable assets, particularly when making such a substantial financial decision. As you embark on your home buying journey, remember the importance of seeking professional assistance. Together with Homeseed as your lender, we will work to ensure your home buying experience is seamless, informed, and ultimately, rewarding.

Mortgage Market Update (3/11/24)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates are lower week-over-week after the recent PCE inflation data came in as expected.
  • Downward momentum on rates continued as yesterday’s ISM Services index showed a big decline in prices paid for the service sector where we are seeing most of the inflation.
  • Tomorrow’s BLS Jobs Report is potentially a market mover as recent comments by Fed members show they are paying close attention to the labor market.


Personal Consumption Expenditures

  • Fed’s favorite measure of inflation, Personal Consumption Expenditures, showed the headline or all-in inflation declined from 2.6% to 2.4% year-over-year.
  • Annualizing the last 6-months of core readings, which the Fed says they are looking at, puts Core PCE at 2.46% and close to their 2% target.
  • There are emerging signs that the consumer is coming under pressure when looking at income and spending data.


CoreLogic Home Price Insights

  • Home prices were up 5.8% year-over-year in January, which is an increase from 5.5% on the previous report.
  • Forecasts for February show home prices being flat and will rise by 2.6% over the next 12 months, but it is worth noting that CoreLogic has been very conservative in the past.
  • Despite fewer buyers in the current market, housing demand still exceeds available inventory which is why home prices remain supported.
  1. RATES LOWER AHEAD OF JOBS REPORT – Recent inflation data helps mortgage rates move lower ahead of the important BLS Jobs Report.
    https://www.mortgagenewsdaily.com/…
  2. FEBRUARY LAYOFF NUMBERS – Layoff announcements in February hit their highest level for the month since the global financial crisis in 2009.
    https://www.cnbc.com/…
  3. HOME-SELLING SENTIMENT MOVES HIGHER – February data shows more consumers believe it is a good time to sell a home ahead of the spring homebuying season when compared to January.
    https://www.fanniemae.com/…
  4. CREDIT SCORES WORSEN – For the first time in a decade, the average credit score for consumers fell according to FICO.
    https://www.investopedia.com/…

Accessing Your Home Equity

Posted on by Jon Dao

Homeownership brings with it a valuable asset beyond the comfort of having a place to call your own – home equity. Today, homeowners collectively hold trillions in equity, presenting an opportunity to leverage these funds for various financial opportunities. Whether it’s funding home renovations, consolidating debt, making financial investments, or covering life events, your home equity can be a valuable resource to leverage for your benefit. In this blog, we’ll discuss the many options you have available to access your equity!

Loan Products to Access Your Equity:

  1. Home Equity Loan (HELOAN):
    1. A fixed-rate loan offering a lump sum payment.Ideal for those with a clear vision of their financial needs.
    1. Consistent monthly payments, providing stability.
  2. Home Equity Line of Credit (HELOC):
    1. A flexible credit line secured by your home’s equity.Allows for periodic access to funds when needed.
    1. Adjustable interest rates, providing flexibility but requiring careful financial planning.
  3. Cash-out Refinance:
    1. Replace your existing mortgage with a new one, withdrawing excess funds.Fixed monthly payments and potential for lower interest rates.
    1. Suitable for those looking to streamline mortgage payments and access substantial funds.

Renovation Loan Highlights:

  1. Borrowing Based on Expected Home Value:
    1. Allows you to access funds based on the anticipated post-renovation value of your home.
    1. A great solution for those seeking additional funds for renovation but lacking sufficient equity in the home.
  2. Building an Accessory Dwelling Unit (ADU):
    1. Utilize renovation loans to finance the construction of an ADU.
    1. Enhances the property’s value and provides potential rental income.
  3. Purchasing a Property That Needs Upgrades:
    1. The renovation loan product can also be used on a home purchase.
    1. The downpayment can be as little as 3% with a HomeStyle renovation loan.

What Loan Product Is Best:

When deciding to access your home equity, it’s crucial to consider various factors that can significantly influence which loan product is best for your situation. Two key considerations are the amount of debt you are borrowing and the interest rate of the loan product. As your loan advisor, we help provide a blended interest rate calculation that takes into account the interest rates associated with your existing mortgage and the new loan you’re considering, weighted by the loan amounts. This helps you assess the potential impact of blended interest rates on your financial situation, providing clarity on the short-term and long-term implications of each loan option.

As you explore possibilities with your home equity, remember that your homeownership is not just a place to live but a gateway to financial opportunities. Now is the time to leverage your home equity and unlock its potential. Our dedicated team is here to guide you through the process, offering insights, expertise, and personalized solutions. Whether you’re considering a HELOAN, HELOC, or renovation loans, our goal is to empower you to make informed decisions as a homeowner.

Mortgage Market Update (2/26/24)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • The main reason for higher mortgage rates this week was due to a weak 20-year bond auction that caused a sell off in the bond market.
  • Mortgage rates have seen a slight upward trend since the beginning of the year due to stronger inflation and labor market data.
  • The minutes from the most recent Fed meeting were released this week which confirmed that they are certain to cut rates this year, but this will likely not occur by the next meeting in March.

Existing Home Sales

  • Housing inventory remains low with about 3 months of supply of homes versus the normal market value of 4.6 months.
  • The median home price rose by 5% from the previous year, reaching $379,100.
  • Lawrence Yun, Chief Economist for NAR, notes that mid-priced homes are receiving multiple offers, with a significant share (32%) being cash deals, indicating a market driven by record-high housing wealth.

Producer Price Index

  • The Producer Price Index measures inflation from the perspective of producers.
  • Similar to the recent CPI report, inflation on the producer side was also higher than expected for the month of January.
  • Services were the main culprit in the high inflation reading that includes items such as health care and legal services.
  1. RATES MOVE SLIGHTLY HIGHER – A weak 20-year bond auction pushes rates slightly up to highs not seen since November.
    https://www.mortgagenewsdaily.com/…
  2. FHA HELPING BORROWERS KEEP HOMES – The new offering, called the Payment Supplement, will help borrowers bring their mortgage payments current and avoid foreclosure.
    https://www.hud.gov/…
  3. ACTIVE INVENTORY IS UP – Recent data shows that active inventory is up 15.7% and new listings are up 0.9% YoY.
    https://www.calculatedriskblog.com/…
  4. THE FED EXPRESSES CAUTION – Meeting minutes show that the Fed plans to cut rates this year, but express caution in lowering too quickly.
    https://www.cnbc.com/…

Understanding and Succeeding in the Current Housing Market

Posted on by Jon Dao

In today’s dynamic real estate landscape, a persistent housing inventory shortage defines the market’s competitiveness. This scarcity arises from two main factors. Firstly, household formations consistently outpace housing completions over the past decade, with projections indicating a continued trend. The growing population entering the median age of first-time home buyers (37 years old) further exacerbates this issue. Secondly, many homeowners are hesitant to sell due to the current higher interest rate environment. While they might have considered upgrading in the past, prevailing higher interest rates anchor them to their current residences. This dual dynamic, driven by increasing household formations and homeowners holding onto their properties, shapes the current sellers market and intensifies competition.

Making Your Financing as Competitive as Possible in the Seller Market

Where time is of the essence, the importance of offering a quick closing cannot be overstated. Enter Homeseed’s Cash Committed Program, a highly impactful tool in the homebuying process. Unlike traditional pre-approvals, this program provides an underwritten credit approval that signifies a more robust evaluation of your application and commitment to financing. The added assurance of a $10,000 guarantee for closing on time not only expedites the process but also builds trust with sellers, making your offer stand out in multiple offer situations.

Homeseed also offers a Buy Before You Sell Program that allows homebuyers to move quickly on the purchase of the new home rather than worrying about selling their current residence. This strengthens their offer on a new property as they are not contingent on the sale of their current home. Buy Before You Sell also offers the option to receive a bridge loan to help cover the down payment on the new purchase or to make repairs to the departing residence.

Create Your Inventory and Build the Home of Your Dreams

With inventory at an all-time low, homebuyers have also expressed a need to find alternative avenues for homeownership. Building a new home or rehabilitating an existing one emerges as a strategic move. These options often come with the enticing prospect of instant equity post-construction or rehab, where the appraised value exceeds the initial investment. Moreover, with low down payment options, such as 5% with conventional financing or 3.5% with FHA financing, these programs make homeownership more accessible.

It’s essential for homebuyers to adapt and thrive in this competitive market, and a crucial aspect of this is collaborating with a local lender who understands the nuances of the market. Working with someone knowledgeable about the local real estate landscape can provide invaluable insights and pave the way for a smoother and more successful homebuying journey. As you embark on your homebuying journey, consider exploring innovative financing options with Homeseed. The dynamic nature of the real estate market calls for proactive and informed decisions, and Homeseed is here to empower you on your path to homeownership.

Mortgage Market Update (2/12/24)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates are higher this week as a result of strong labor market and manufacturing data.
  • The BLS Jobs Report showed nearly double the amount of jobs were added to the market than expected.
  • The ISM Non-Manufacturing PMI was also higher than expected and the upbeat economic data put additional upward pressure on rates.


BLS Jobs Report

  • The report for January showed that the 353,000 jobs created were nearly double the expected 180,000.
  • One thing to be mindful of is that January is a month of heavy adjustments due to new benchmarks, seasonal adjustments, and population controls.
  • Despite the job gains, the entire labor force is working on average 30 minutes less per week, which is equivalent to 2.4M jobs lost.
  • We will have to wait for February data to see if the labor market tightening once again.


Home Values Continue to Appreciate

  • The two most notable housing indices, Case-Shiller and FHFA, both recently released data showing that home prices set new highs.
  • Although data for December 2023 is not available yet, both indices show that home values were on pace to appreciate by 6% in 2023.
  • Lower numbers for existing inventory and active listings will continue to be supportive of home prices throughout 2024.
  1. RATES MOVE HIGHER – Upbeat economic reports provide the catalyst for higher week-over-week rates.
    https://www.mortgagenewsdaily.com/…
  2. MEDIA SAYING HOUSING CRASH – But housing credit data today looks nothing like what was seen in 2008.
    https://www.housingwire.com/…
  3. BOOST TO HOUSING SENTIMENT – The Fannie Mae Home Purchase Sentiment Index reached its highest level in nearly two years.
    https://www.fanniemae.com/…
  4. TWO SIDES TO JOB MARKET – Economists and reports say the labor market is strong, but job seekers don’t share the same confidence.
    https://www.cnbc.com/…

Wealth Through Homeownership: A Decade-by-Decade Analysis

Posted on by Jon Dao

Homeownership has long been considered a cornerstone of the American dream, providing not only a sense of stability and security but also a unique avenue for building wealth. For many, purchasing a home is not just about having a place to call their own; it’s a strategic financial move that can lead to long-term prosperity. Below we’ll provide a decade-by-decade analysis on home values and explore how homeownership is a powerful investment tool, enabling individuals to leverage their assets and capitalize on the appreciation of real estate.

Historical Appreciation By The Decade

Consistent Appreciation: Regardless of the decade, those who invested in homeownership and held onto their properties for 10 years experienced positive appreciation on average. This consistency underscores the enduring nature of real estate as a wealth-building asset.

Diversification of Investments: The data highlights how real estate can serve as a valuable diversification tool for investment portfolios. While other assets may experience volatility, real estate has historically shown a trend of appreciation over time.

The Power of Leverage in Real Estate

One of the unique aspects of real estate investment is the ability to use leverage. When you purchase a home, you typically make a down payment (an initial investment) while borrowing the rest through a mortgage. This means you control an asset’s full value with a relatively small upfront payment. As the property appreciates, the return on your investment is calculated based on the property’s entire value, not just your down payment. This leverage magnifies the potential for wealth accumulation.

Homeseed Can Help You Get Started

Discover the possibilities with our exclusive loan programs that offer little to no down payment options. This means you can potentially start building equity and wealth with very little upfront investment. Our commitment is to make homeownership accessible and financially advantageous for you. Contact us today to discuss your goals, explore available opportunities, and make informed decisions about your real estate investment. Your path to homeownership and financial prosperity starts with a conversation. Let’s connect and turn your homeownership dreams into reality!

Mortgage Market Update (1/29/24)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates are relatively unchanged week-over-week with some volatility mixed in due to economic data and bond auction results.
  • Last week saw 2-year, 5-year, and 7-year Treasury auctions that were met with weak demand and put upward pressure on mortgage rates.
  • Recent GDP and labor market reports came in stronger than expected and the Fed would like to see more economic weakness to support disinflation.


Personal Consumption Expenditures (PCE)

  • Headline inflation rose 0.17% in January, close to the expected 0.2%, while the year-over-year reading remained at 2.6%.
  • Annualized core PCE over the last 6 and 8 months is 1.85% and 2.08%, respectively, which are close to the Fed’s target of 2%.
  • Although the Fed prefers the Core PCE measure for gauging inflation, it should be noted that the CPI tends to move the markets a bit more.


Pending Home Sales

  • Pending Home Sales (signed contracts on existing homes) surged 8.3% from November to December.
  • The large jump was attributed to the decline in mortgage rates we’ve seen since the highs back in October 2023.
  • The Chief Economist at the National Association of Realtors, Lawrence Yun, noted that sales are expected to rise significantly in each of the next two years.
  • An increase in the supply of homes on the market will be essential to satisfying all of the demand that current exists.
  1. RATES UNCHANGED WEEK-OVER-WEEK – Mortgage rates were volatile within a narrow range over the last week but are relatively unchanged.
    https://www.mortgagenewsdaily.com/…
  2. ECONOMY BOOSTED BY NEW HOME SALES – Continue demand for new housing helped employ workers, stimulate the purchase of goods, and avoid a recession in 2023.
    https://www.housingwire.com/…
  3. ACTIVE INVENTORY RISES – For the 11th straight week, active listings grew and looks to improve availability and affordability heading into the spring season.
    https://www.calculatedriskblog.com/…
  4. INFLATION CONTINUING TO COOL – The recent PCE report showed inflation continuing to cool and near the Fed’s 2% target.
    https://www.cnbc.com/…

Seizing the Opportunity: An Ideal Time to Enter the Housing Market

Posted on by Jon Dao

At some point in our lives, we’ve all pondered the age-old question: when is the ideal moment to embark on the journey of homeownership? This decision is often influenced by personal finances and life circumstances. Fortunately, for those with the desire and means, the current market offers an advantageous time to make the move into homeownership. Despite some headwinds like rising home prices and higher interest rates, the numerous benefits of purchasing now far outweigh these obstacles.

An Investment to Build Wealth:

  • Owning a home builds equity, but that takes time for the asset to grow. The earlier you can start the better. Remember, time in the market beats trying to time the market.
  • Mortgage payments contribute to your ownership stake, unlike rent payments that go into your landlord’s pocket.
  • In the future, your home equity becomes a powerful financial tool to be leveraged for other investments or major life expenses.
  • Property values historically trend upward, providing you one of the safest investments you can make.
  • Homeowners enjoy tax incentives, with tax-deductible mortgage interest payments.

An Opportunistic Time to Purchase Now:

  • Forecasts indicate an expected decline in mortgage rates in 2024, which will likely increase affordability and heighten competition on the limited supply of homes.
  • Purchasing now grants an advantage ahead of the projected surge in competition, while allowing you to capitalize on equity gains and refinance opportunities once rates drop.
  • The higher loan limits for 2024 contribute to an increase in affordability for you, especially in the earlier part of the year as home prices are expected to continue rising throughout 2024.

Homeseed’s Programs & Strategies for First-Time Homebuyers

  • Down Payment Assistance Programs: Programs designed to aid with down payment and closing costs, providing valuable financial support to ease the initial financial burden of purchasing a home.
  • Zero Down Payment Loans: Loan programs requiring no down payment, particularly beneficial for veterans (VA) or those residing in rural areas (USDA).
  • First-Time Homebuyer Programs: Loan programs with lower down payments and improved rates that are created for low- to moderate-income first-time homebuyers.
  • Seller Concessions: We offer financing strategies where the seller can help provide additional assistance to reduce the cash you need to close.

Choosing homeownership over renting is a strategic move that goes beyond the immediate advantages of financial investment. It’s a commitment to building wealth and securing long-term benefits for you and your family. With Homeseed’s support and specialized programs for first-time buyers, the path to homeownership becomes even more attainable. Take the next step with Homeseed and make the move towards homeownership today.

Homeseed’s 2024 Mortgage & Real Estate Market Forecast

Posted on by Jon Dao

Welcome to Homeseed’s 2024 Mortgage & Real Estate Forecast! As we enter the exciting year of 2024, the anticipation and speculation surrounding the mortgage market and housing industry have prospective homebuyers carefully watching. In just the last three years, we’ve gone from seeing all-time low mortgage rates to some of the highest mortgage rates in the last two decades due to significant global events and economic shifts. To better understand what potentially lies ahead for this year, let’s dive into a forecast for the mortgage market and housing industry in 2024.

Inflation: The Driving Force for Mortgage Rates

Inflation has emerged as a pivotal factor shaping the mortgage market. After reaching a near 40-year high of 5.3% in March 2022, Core Personal Consumption Expenditures (PCE) has been on a gradual decline and now hovers at 3.2%, which is near the Federal Reserve’s (Fed) goal of 2%. Given the improvement on inflation, the Fed signaled they would begin rate cuts to their Fed Funds Rate before reaching the 2% target in hopes of easing into its inflation goal with minimal negative effects to the economy. With shelter accounting for 21% of Core PCE, CoreLogic’s most recent measure of shelter costs showed a 2.5% year-over-year increase in their real-time blended rents data. This suggests a continued improvement for inflation lies ahead as the shelter data used by the PCE report lags the real-time shelter data, and the markets are now predicting the first rate cut by the Fed as early as March 2024.

Supply and Demand: Limited Inventory Pushes Home Prices Higher

The housing market continues to grapple with enduring challenges in inventory shortage, fueling a steady increase in home prices. Despite efforts to address the housing deficit, housing starts persist below household formations, indicating a sustained scarcity of available homes for sale coming to the market that is unable to meet the escalating demand. This ongoing imbalance between the supply of homes and demand from buyers will likely intensify competition if mortgage rates continue to come down, leading to the possibility of bidding wars and soaring prices once again.

Mortgage Rate and Real Estate Forecasts

Given the trajectory of inflation, we forecast the 30-Year Fixed Rate Mortgage to fluctuate between a rate range of 5.75%-6.75% throughout 2024. If rates fall below 6%, this will potentially unlock move-up buyers who are current homeowners that want to upgrade their homes.

For home price appreciation, we forecast home values to increase between 4-5% in 2024. Values should stay strong as demand will remain high due to more households being formed than homes coming to market.

Seizing the Opportunity: A Time for Homeownership to Build Wealth

As we navigate the intricacies of 2024, this period stands as an opportunistic time for prospective homebuyers. With the likelihood of interest rates coming down and home prices on a continued ascent, buyers can consider the strategic move of securing a home now and later benefiting from potential refinancing opportunities in the near future. Here at Homeseed, we offer a Home Equity Forecast tool, shedding light on the significant wealth-building potential through home appreciation and amortization. It emphasizes that homeownership is not merely about costs and interest rates but extends to the concept of a home evolving into one of your most substantial investments for building wealth.

Mortgage Market Update (12/19/23)

Posted on by Jon Dao

Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.

Mortgage Rate Trends & Forecasts

  • Mortgage rates move lower once again this week with the biggest improvement happening yesterday after the Fed Meeting.
  • The improvement in rates were due to the Fed signaling that they plan to cut rates multiple times in 2024.
  • This week’s Consumer Price Index and Producer Price Index also showed inflation moving lower.


This Week’s Fed Meeting

  • The Federal Reserve had their last meeting of 2023 yesterday and maintained its benchmark Fed Funds Rate, opting to not raise or cut rates.
  • The big improvement in mortgage rates occurred when the Fed signaled it will likely cut rates by 0.75% in the year ahead, which is an increase of 0.25% from their previous meeting in September.
  • Remember, the Fed Funds Rate does not directly impact mortgage rates but this shift in outlook directly affects the bond market that mortgage rates are tied to.


CPI and PPI Inflation Reports

  • This was a good week for inflation news as many reports and forecasts showed inflation moving lower.
  • Tuesday’s release of the Consumer Price Index (CPI) report showed inflation moving lower year-over-year from 3.2% to 3.1%.
  • Yesterday’s Producer Price Index (PPI) report showed producer inflation falling from 1.2% to 0.9% year-over-year.
  • The Fed also announced yesterday that they also project inflation will fall to 2.4% in 2024, which is better than the 2.5% they projected in September.
  1. GOOD NEWS FOR MORTGAGE RATES – Mortgage rates moved to the lowest levels since May with the help of some good news coming from the Fed yesterday.
    https://www.mortgagenewsdaily.com/…
  2. FED MEETING RECAP – The Fed had their final meeting of the year and signaled rates cuts and a lower inflation prediction for 2024.
    https://www.yahoo.com/…
  3. LARGE INCREASE IN MORTGAGE ACTIVITY – The Mortgage Bankers Association said that mortgage application volume was up 7.4% last week as rates continue to move lower.
    https://www.eyeonhousing.org/…
  4. CONSUMER PRICE INDEX – The CPI for November showed inflation falling further to 3.1% compared to the pandemic-era peak of 9.1% in June of 2022.
    https://www.cnbc.com/…

Investor Cash Flow Loan Program

Posted on by Jon Dao

ARE YOU INTERESTED IN BECOMING A REAL ESTATE INVESTOR?

Becoming a real estate investor can be a wise financial decision for homeowners looking to build long-term wealth. With the investor cash flow (DSCR) loan program that Homeseed offers, it has become easier than ever to finance investment properties. Our DSCR loan program does not require you to qualify personal debt or income, and it simply looks at the property’s cash flow to decide on its approval. Real estate has historically proven to be a stable and profitable investment, and DSCR loan programs make it accessible to clients interested in becoming investors. Attached is a flyer with more information. Share or reach out with any questions!

How To Reduce Trigger Leads

Posted on by Jon Dao

WHAT IS A TRIGGER LEAD?

Trigger leads are generated when a consumer’s credit report is accessed during a loan application process. Credit bureaus like Equifax, Experian, and TransUnion can sell the consumer’s information as trigger leads to other companies, and these companies will begin calling you multiple times to solicit business. It’s frustrating as Homeseed needs to request your credit scores from the credit bureaus for the purpose of a mortgage loan.

IS THIS LEGAL?

The sale of trigger leads is currently legal, but there is a proposed bill called the Trigger Leads Abatement Act of 2022 that aims to prohibit their creation and sale.

HOW DO I STOP THEM?

There is no way to completely stop trigger leads, but taking steps such as opting out of pre-approved credit offers can reduce them significantly.

  1. Opt-Out of Phone Calls and Texts
    Visit www.optoutprescreen.com to register yourself for the Electronic Opt-Out for 5 years. You can also register yourself by calling 888-567-8688. Visit www.donotcall.gov and register up to 3 phone numbers. Be sure to click on the link emailed to you from register@donotcall.gov within 72 hours to confirm your registration.
  2. Opt-Out of Email and Mail Offers
    Visit www.dmachoice.org and select Email Opt-Out Service to register up to 3 emails. Be sure to click on the link emailed to you within 30 days. You can also register up to 5 records for your household for 10 years. Please note they do charge a $4 admin fee for registration.

2023 Conforming Loan Limits

Posted on by mmttest2

Every year the Federal Housing Finance Agency (FHFA) announces their conforming loan limits for the upcoming year immediately following the November release of their House Price Index (HPI). FHFA uses this data on home price appreciation to set the new loan limits for the upcoming year. For areas in the country that are considered high cost, FHFA increases loan limits further and will go up to 150% of the baseline conforming loan limit.

In 2023, the new conforming loan limit for most of the US for one-unit properties will increase to $726,200, an increase of $79,000 from $647,200 in 2022. This means in areas of high-cost or with special statutory provisions, the loan limit can reach as high as $1,089,300. An example in Washington State would be the counties of King, Snohomish, and Pierce, where the loan limit will increase to $977,500, an increase of $86,250 from $891,250 in 2022. This significant increase will help home buyers access more credit in many markets where home prices are still seeing double digit appreciation year-over-year.

If you have any questions or want to find out if you qualify for a conforming loan, please reach out today!

2023 Conforming Loan Limits By County

Lock & Shop: Lock in your rate today before you find a home

Posted on by mmttest2

Purchasing a home should be an exciting process, but having to worry about interest rates rising in this market can dampen some of the joy. That is why Homeseed is offering our Lock & Shop program to clients. Potential homebuyers will now be able to lock in your rate before you have a fully executed purchase contract, so you can have peace of mind that your interest rate will not go up while searching for your home.

Homeseed has developed our Lock & Shop program to allow for your rate to be protected for up to 60 days. Extensions are also available for more time. By locking in your rate now while you look for your home, the Lock & Shop program gives you the opportunity to save money should interest rates continue to rise as many experts predict they will throughout 2022. Locking in a rate now also helps you manage your home budget by removing any surprises of a higher monthly mortgage payment if interest rates were to rise.

Please reach out today with any questions. The Homeseed Team is ready to get you pre-approved and help strengthen your offer by letting sellers know you are certified for financing with an interest rate that is already locked!

Housing Market Alert – Seattle Has Over 15% Year Over Year Appreciation

Posted on by mmttest2

Home appreciation continues to reach historic highs as tight supply and strong demand lead to an extremely competitive housing market. According to the S&P CoreLogic Case-Shiller home price index, prices in February rose 12% year over year across the US. This 12% gain is a 15-year high, and Seattle is one of the top cities with a gain of 15.4% year over year.

Those trying to enter the housing market are feeling the frustrations and disappointments of a competitive low inventory market. In many cases, buyers are having to make over five offers on homes before getting one accepted. However, the risk and rewards can quickly make sense when you consider the yearly equity gains with appreciation being higher than most full-time annual salaries. With a 15.4% gain in home prices year over year in Seattle, a person purchasing a $750,000 home last year would have gained $115,500 in appreciation on average. Historically low interest rates are also helping give a small boost to your purchasing power, so long as they remain low.

In the end, the most important thing prospective homebuyers need to consider is if are you in a position to responsibly take on a mortgage payment. Make sure you are evaluating a range of factors including your finances, personal life, and future. Connect with us today if you have any questions. If you have anyone looking to get pre-approved to purchase a home or refinance, we’d love the opportunity to serve them!

Homeseed Launches Wealth and Asset Management Tool

Posted on by mmttest2

Homeseed is constantly looking for ways to provide value for our clients and industry partners that extends past the transaction. Our goal is to be your trusted advisor for life and provide ample opportunities to engage and communicate with us regarding your home. To help support this goal, we will soon be launching a tool that provides dynamic financial reports to clients about their home or any other potential real estate endeavors.

For most individuals, 83% of wealth comes from real estate at the average age of retirement. Therefore, it is important to provide homeowners with the appropriate tools and the guidance of a Homeseed Loan Advisor to manage wealth through the largest asset they will likely ever own, their home. Our monthly reports will provide you with information regarding your home’s value, financial strategies in connection with your equity position, and plenty of engagement opportunities with your Loan Advisor to help you grow your real estate portfolio and continue to build wealth.

Homeseed is excited to be providing this service to all our clients and partners, even those who have already financed a home through us in the past. We want to empower you to take ownership of managing your wealth in a simple, engaging, and meaningful way. Communicating with our Loan Advisors will also always be a simple click away as well.

Please reach out if you’d like to learn more about this new tool we will be offering. If you also have anyone looking to get pre-approved to purchase a home or refinance, we’d love the opportunity to serve them!

Have you thought about building your dream home?

Posted on by mmttest2

Finding and getting an offer accepted on any home is tough in today’s housing market, but what if you could build your own dream home? You could design it how you want and potentially build your own equity in the process. Either buy land and finance it into the costs of the loan or build on land you already own while using its equity as a down-payment. With a construction loan from Homeseed, there are plenty of options and adjustments available throughout the process as you build your dream home.

“Nothing worth having comes easy” is the mantra to remember when going through the building process. The whole process can be daunting but having a can-do attitude will be your ticket to success. 

Here’s a simplified checklist for the construction process:

  1. Research land: location, available utilities, cost for development
  2. Research type of home:  layout, cost to build, finishes
  3. Research builders: reputation, easy to work with, attention to detail, cost per square foot
  4. Research loan options:  which loan option fits your project and financial goals.

Doing your own research will help you prepare for the challenges ahead. Depending on how you like to organize a project, you will want to keep a digital or paper record of all the details and information you discover. Tip: check out the local jurisdiction in the location you are wanting to build for building requirements and costs. Some building departments have super helpful websites as well. 

Getting the financial piece nailed down is one of the early important steps.  Here at Homeseed, we offer Conventional (conforming and Jumbo loan amounts), FHA, VA, and USDA construction loans. Speaking with a loan advisor about your financial goals will help you decide which loan option is best. 

Homeseed’s Forecast for Mortgage Rates in 2021

Posted on by Jon Dao

Mortgage rates reached all-time record lows in 2020 and are expected to remain low through the end of the year. COVID-19 has created a crisis for many economic sectors, and as a general rule of thumb, weak economic data tends to cause lower mortgage rates. However, there are numerous indicators suggesting rates will increase in 2021 that we will discuss in this blog post. Fannie Mae is predicting the 30-year fixed rate to remain near 2.8% for 2021 and 2.9% for 2022. The National Mortgage Bankers Association is predicting we will reach 3.3% by end of 2021, and 3.6% by end of 2022.

The record low rates we are currently experiencing have been brought on by weak economic data shown in the poor numbers for the labor market, employment rate, and consumer spending. With news of successful vaccine trials giving hope for ending global lockdown restrictions, prospects for economic growth will gradually improve and likely push mortgage rates up in 2021. So far, the stock markets have also seemed to welcome news of a Biden presidency. Continued optimism in the stock market would persuade investors to shift money out of safer investments like mortgage-backed securities and into riskier assets like stocks, further increasing the potential for rising mortgage rates.

Lastly, while we expect mortgage rates to rise, we don’t expect them to rise quickly or very much. The fallout from a global pandemic will take time to recover from, and the housing industry is one of few current bright spots of the economy being supported by low mortgage rates. The Federal Reserve has also committed to keeping its Federal Funds Rate low, which indirectly impacts a broad range of markets including mortgages. If we were to see rates rise half a percent from its current 2.75% to 3.25% in 2021, we can expect an average borrower who qualified for a $400,000 loan to lose about $25,000 in purchasing power as a result of the 0.5% increase in rate.

Links/Notes:

  1. Market Watch – COVID-19 vaccines would improve prospects for economic growth and push overall interest rates up
  2. National Mortgage News – Fannie Mae predicts 30-year to remain near 2.8% for 2021 and 2.9% for 2022. MBA predicts rates will reach 3.3% by end of 2021, and 3.6% by end of 2022
  3. Bank Rate – “My gut feeling is that rates are going to rise in the next year,” Johnson said. “You’re just not going to get investors willing to accept 1 percent returns,” he added. “As COVID ebbs away, these record low interest rates will ebb away.”
  4. The Mortgage Reports – Markets welcomed news of Biden presidency, leading to more money flowing into stocks.
  5. How rates impact a borrower’s purchasing power:
    1. $400,000 Loan’s Monthly Principal & Interest = $1632.96 (30-Year Fixed at 2.75%)
    1. $375,000 Loan’s Monthly Principal & Interest = $1632.02 (30-Year Fixed at 3.25%)

Cost of Waiting

Posted on by Jon Dao

Should you purchase a home now, or should you wait? Like most big decisions in life, answering that question depends on a lot of factors such as the economy, real estate market, finances, and personal life. If you are now in a position to responsibly take on a mortgage payment after considering those factors, and are instead waiting for the absolute lowest price on a home, read on to learn more about why you should act now to avoid the potential cost of waiting.

Low Interest Rates

The average 30-year fixed mortgage interest rate about a year ago was 3.75% according to Freddie Mac’s Primary Mortgage Market Survey. Today’s average comes in at 3.01%. Interest rates for mortgages are currently at all-time lows, and lower interest rates mean greater home affordability for potential home owners. To give you an example, a borrower with a $475,000 loan amount and 3.75% interest rate on a 30-year fixed mortgage would have a monthly principal and interest payment of $2,200. If the same borrower now had today’s lower rate of approximately 3%, their loan amount could increase to $520,000 and they would still have a lower monthly principal and interest payment of $2,192. That’s an increase in purchasing power of $45,000 because of today’s lower interest rates than a year ago. With uncertainty in the economy, there is a potential that interest rates will rise again at any time.

Home Values Continue To Rise

Demand for housing in the Seattle metropolitan area remains very strong and property values continue to appreciate at a fast pace. We’ll use a $500,000 home purchase price and conventional financing to illustrate how home appreciation will require more additional cash at closing. Conventional financing typically requires a minimum 5% down payment. If the home is valued at $500,000 today, that would require a $25,000 down payment. At the current appreciation rates projected by MBS Highway for King County, the same home would be valued at approximately $529,028 in a year and would then require a higher 5% down payment of $26,451. Other monthly costs would also rise accordingly such as mortgage insurance and the principal and interest payment.

Loss In Property Appreciation

In a market with high appreciation rates and rising home values, it can be difficult to out-save the appreciation you would be earning on your home. In our previous example, the $500,000 home would appreciate to an estimated $529,028 after one year in King County. That’s $29,028 in lost appreciation value over a year, or about $2,419 in savings per month.

Benefits of Refinancing

Posted on by Jon Dao

RECORD HIGH REFINANCES

Refinance applications have surged to decade highs over the last few months and rightfully so. According to Freddie Mac’s Primary Mortgage Market Survey, average mortgage rates have also set new all-time lows within the same period and many home owners are hoping to take advantage of these lower rates. So what are the benefits of refinancing and should you start the process now? Read more to find out!

BENEFITS OF REFINANCING

There are multiple benefits to refinancing your mortgage. We’ll dive into some of them below:

  1. Lowering your interest rate. If you qualify for a new mortgage, lowering your interest rate will reduce the overall interest charged on the loan and can save you thousands of dollars over the life of the loan.
  2. Eliminate mortgage insurance. If your current mortgage includes mortgage insurance, and you have 20% equity in your home’s current value, you can refinance to remove the mortgage insurance and potentially save hundreds off your monthly mortgage payment.
  3. Cashing out your equity. On a cash-out refinance, lenders will generally limit you to borrowing no more than 80% of your home’s value to ensure you maintain 20% equity in the home. You can use the cash from the refinance to fund home improvements or consolidate high interest debt.
  4. Shorten your mortgage term. Pay off your home quicker by refinancing into a shorter term length. A 15-year term mortgage typically offers lower rates compared to a 30-year term, so your monthly payment might not increase by much. 

IS IT THE RIGHT TIME FOR YOU?

There are many things to consider before refinancing such as how long you plan to remain in the home and if the potential savings make sense when compared with the associated closing costs. Contact us today to schedule a free consultation where you’ll work with one of our highly experienced and knowledgeable loan advisors!

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