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You’re about to become the next podcasting sensation in the mortgage world.
The good
Here’s a comprehensive collection of graphs, including inventory trends, a three-year historic inventory graph, new listings, the National Association of Realtors’ complete inventory list, the 10-year bond, inflation trends, jobless claims, the MBA purchase application index, existing home sales, mortgage interest rates, and even kittens. Yes, kittens. Phew, glad we covered that!
Recently, the Mortgage Bankers Association (MBA) revised its home price outlook, projecting an upward trend. According to the MBA’s forecast model, U.S. house prices, as measured by FHFA, are expected to increase by 0% in 2023, followed by a 1% jump in 2024, and a substantial 3.9% surge in 2025.
While this forecast may not be groundbreaking or particularly intriguing on its own, consider this: the MBA predicts a modest 1% increase in 2024 and a 2.9% increase in 2025, yet housing starts for the same period are estimated to be 1.386 million, 1.455 million, and 1.577 million, respectively. This is great news, as it suggests that home values will rise steadily but remain stable, likely below the rate of inflation. Such stability brings affordability back into the picture. Moreover, with builders ramping up their efforts and increasing housing starts, we may see a solution to the housing challenges we currently face. Though times may be tough now, greener pastures lie ahead, and it’s crucial to grasp this reality.
The bad (not really)
In recent times, both realtors and lenders have been leaving the industry in record numbers. Over the past six months alone, more than 60,000 realtors have exited the profession. However, it’s important to note that last October, the number of real estate agents working in the field reached an all-time high of 1.6 million. By April, that number had decreased to approximately 1.537 million. Similar trends hold true for loan officers. The industry is experiencing a migration, wherein professionals who entered the field hoping to capitalize on the record deals and significant earnings of the refinancing boom in 2020 and 2021 now find themselves facing uncertainty. However, it’s worth remembering that lending and real estate are inherently volatile industries, with some finding success while many struggle. This market has a way of quickly identifying both types.
Considering the projected increase in business on the horizon, thanks to the MBA’s forecasts, it’s important to recognize that there will be fewer agents and loan officers vying for deals, listings, and loans. So, ask yourself, is that really bad news?
The ugly
Lastly, as summer officially begins and energy consumption rises, many of us will grapple with the financial burden of increased energy costs, further contributing to our personal inflation rates. However, it’s worth noting that energy efficiency measures are ironically becoming more expensive. It seems counterintuitive that spending more is considered efficient!
According to Public Policy for Net Zero Homes and Affordability, implementing specialized stretch energy codes is likely to raise the cost of home construction by approximately 1.8% to 3.8%. This increase translates to an additional $10,000 to $23,000 for the median cost of a single-family home, potentially making home-ownership unattainable for 15,000 to 33,000 households.
Unfortunately, it seems rare for the government to pass policies that save us a few bucks. Bribes, kickbacks, and lobbying tend to govern policy decisions, benefiting politicians and corporations rather than the average citizen. In this sense, it feels like an exercise in futility.
However, there is a glimmer of hope. A new report from the Home Builders & Re-modelers Association of Massachusetts (HBRAMA) titled “Public Policy for Net Zero Homes and Affordability” identifies a series of policy tools that could promote the production of energy-efficient and affordable housing. This report offers interesting and realistic insights, which are in short supply these days. We have included a link below for you to read, understand, and share with like-minded individuals in your housing community. Hopefully, this resource will prove helpful.
As we navigate the ever-evolving real estate landscape, it’s essential to stay informed, adapt to changes, and seek opportunities amidst the challenges. The road ahead may not be easy, but with the right knowledge and mindset, we can pave the way to a brighter future in the housing market.
Have an excellent and safe Independence Day!
