BREAKING NEWS: Market Updates from the Real Estate Cellar 4-22-2022
April 22, 2022
By R. Michael Brown, Go Home TV Producer
MORTGAGE RATES
Mortgage demand has fallen to nearly half of what it was a year ago, as interest rates continue to rise.
From CNBC:
"The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.20% last week from 5.13%.
Refinance demand fell another 8% for the week and was 68% lower than the same week one year ago.
Mortgage applications to purchase a home fell 3% for the week and were 14% lower than the same week one year ago.
"Ongoing concerns about rapid inflation and tighter U.S. monetary policy continued to push Treasury yields higher, driving mortgage rates to their highest level in over a decade. Rates increased across the board for all loan types," said Joel Kan, MBA's associate vice president of economic and industry forecasting.
"In a housing market facing affordability challenges and low inventory, higher rates are causing a pullback or delay in home purchase demand as well. Home purchase activity has been volatile in recent weeks and has yet to see the typical pickup for this time of the year," added Kan.
From WSJ:
"We've never seen a time where mortgage rates have risen as quickly as they have and the market hasn't cooled off," said Ralph McLaughlin, chief economist at Kukun, a real-estate data firm. "I don't expect the market to collapse, by any means, but certainly it's going to go from a gangbuster market to one that hopefully looks more normal." - WSJ
From Dawn Pfaff, president of My State MLS:
"The last few years because there's been so much money to lend and because of [government] stimulus, interest rates have been really low, below 3% recently. I mean that was insane. Was that going to last? Hopefully nobody thought that was going to happen."
"There's still a lot of cash in the market, a lot of cash buyers. So, I think we are still going to see competition in certain areas [of the country] where the prices are going to stay the same. Some areas may continue a little bit upwards because inventory is still really, really tight. And the reason inventories are tight is because there's nowhere to go."
"So, it's very hard. There's a logjam. I do think that the dam is going to break, and I think these interest rates are going to break the dam. We are hearing that the Fed is going to raise the federal funds rate by half a percentage point in May, that they're going to do a double, [usually they raise it no more than] a quarter of a point.
HOUSING INVENTORY
Prediction: More homes coming to the market in 2022.
In a normal year, available homes for sale become most plentiful, sometime between July and September. While recent history has been anything but normal, 2022 could start heading in that direction.
"An inventory peak in late summer or early fall is the most likely scenario, given how the market returned to normal seasonal trends in 2021." -Jeff Tucker, senior economist at Zillow
About 64% of prospective home sellers plan to list their properties by the end of August, according to a Realtor.com report. In even better news, a 43% share of those selling have expected prices below $350,000 - the range most first-time buyers target - and 22% anticipate listing between $350,000 and $500,000. - Realtor.com
"Buyers have been thrown for a loop because of how frenetic the housing market is and how fast homes are selling. I anticipate we get a much more typical seasonal pattern this year; people start listing in the spring, and of course, activity heats up too. Then the homes that didn't sell through spring and summer sit on the market and that's where you see inventory pick up." - Freddie Mac
"Our forecast expectation is that inventories would increase between 0% and 1% this year. We may see a slower pace of sales in the fall because rising mortgage rates are pushing up housing costs so much. It may even cause a slightly bigger-than-usual recovery in for-sale inventory." - Realtor.com
From Dawn Pfaff of My State MLS:
"Housing inventory is getting a little better. I am seeing some price declines even in some of the hot markets. But as I say, all markets and prices are local."
"In Florida I'm seeing a lot more For Sale By Owner (FSBO) as I'm driving to and from all over the place. A lot of times those FSBOs are listed with flat fee brokers. Those are brokers that will put the listing on the MLS for you. Many consumers have never heard of this."
"Those FSBOs still end up paying commission for the most part. I mean, for sale by owners are really great place if you're a buyer's agent and you approach them and ask them if they would still compensate your commission if you brought them a buyer."
"For sale by owners traditionally don't sell as easily or as fast as houses listed for sale by a real estate agent. They certainly don't sell for as much money as houses listed for sale by real estate agents. And that is because everyone thinks that it's easy to sell a house. It's not easy. I'm just telling you right now, maybe it's been easy for the last year, but you're about to see it not be easy, not with these interest rates, not with monetary tightening, with less money in the market. You're going to be calling every realtor you know if you need to sell."
"So, if you're an agent, there are some leads out there. There are some FSBOs popping up. Go get them."
5 STEPS ON HOW TO AVOID ANY CLIFF IN A CHANGING MARKET
Our mission in life at My State MLS is to help real estate agents grow their business, expand their territories, make more money, and help folks find a place to live. That's what we do here.
"In a changing market as a real estate agent," said Dawn Pfaff. "You've got to avoid falling off a cliff." Here's how:
- Stay up-to-date on the changing market and be flexible. Follow Go Home TV.
- Strengthen your relationships with agents and clients. Use My State MLS's MLS Affiliate program.
"There's been a lot of damage, in my opinion, done by agents who thought the party was never going to end and maybe some listing agents maybe didn't treat some buyer's agents so great," said Dawn Pfaff. "And now those listing agents are going to be calling every buyer's agent they know going, you got somebody for my house? That's going to happen."
"Plus, we have a program called MLS affiliate," said Dawn Pfaff. "It's an affiliate program which connects the agents together so they can make some money from My State MLS. It's also a way for agents to begin a network with each other." The network expands all of their circles of influence and connections to help sell more homes.
- Get more inventory with My State's Open Listings feature, start selling new home construction, and learn about buying homes at auction for your clients.
"You also need to think outside the box - how you're going to get more listings and how you're going to jump start your business in a tough market," said Dawn Pfaff. "Start with the open listings. We have the open listings program where you can list houses as opens for sale or for rent and by doing that, you're going to be able to build up your inventory. And that inventory is going to show up on your website. If we feed your website, you're going to look like a significant listing agent."
- Learn how to market yourself using social media. We have a webinar coming up on that soon.
- Expand your territory by becoming a member of our nationwide My State MLS. You'll be able to use our Professional Search feature to get referral fees nationwide.
"If you're on a state border, you will have to get licenses in the states you sell in, said Dawn Pfaff. "And since local MLS's don't usually cooperate, you'll have to subscribe to several local MLSs. That can cost thousands of dollars per year. My State MLS eliminates that need by allowing you to list in every state you are licensed in all for one price, $380/year, on one system. And you can still see all the listings from those local MLSs - nationwide using Professional Search on My State MLS."
With My State MLS you can expand your territory to your entire state, across state lines, and across the nation - all for one low-cost fee of $45/month or $380/year.
What to Read Next
