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You need to be tracking “okay”
The latest data on new home sales reveals a positive trend, with a 20% increase. This news may come as a surprise initially, but when we delve into the historical context, it becomes evident that the numbers are respectable, if not exceptional. In this blog post, we will explore the reasons behind this growth and the contrasting decline in existing home sales. Furthermore, we’ll address the challenges faced by loan officers and propose a collaborative solution to overcome them.
By examining the Federal Reserve’s history of new home sales, it becomes clear that our current figures are quite favorable. Although they may not be considered outstanding, they are far from disappointing. A graph dating back to 2015 showcases a steady trajectory, suggesting that our performance is relatively stable.
To put things into perspective, even when we compare our numbers to 1965, a year infamous for lacking entertainment value, we find ourselves in the middle of the pack.
Curiously, while new home sales are experiencing an upswing, existing home sales have declined by the same 20%. This begs the question: Why is there such a contrast? One plausible explanation is that homeowners in new houses are hesitant to move and lose their advantageous 3.25% interest rate. However, a key point to understand is that builders’ primary competition does not come from other builders, as it has historically been the case. Instead, the primary rival is the abundance of existing homes on the market. With their lower prices and wider geographic availability, existing homes hold a distinct advantage. In 2007, for instance, the market was flooded with over 4 million active listings, making it challenging for builders to compete effectively. Today, according to the National Association of Realtors (NAR), the total number of active listings stands at 1.080 million, representing a year-over-year decrease.
Looking up
Loan officers face a stark reality that can be summed up in one crucial point: they need to perform at an “OK” level today. It may not be outstanding, nor should it be mediocre. The yellow line on a graph tracking mortgage applications shows a significant upward trend for the third consecutive week. Refinancing applications, while not exceptional, have also rebounded. Additionally, the robust 20% increase in new home purchases indicates a promising market. Although challenges persist, the situation is not dire enough to prevent loan officers from achieving an “OK” status.
To address the challenges faced by loan officers, it is essential to foster collaboration and support within the industry. A proposed solution is to establish a networking and marketing club comprising loan officers from different regions, companies, and demographics. This collective effort aims to crowdsource ideas, provide mutual encouragement, establish accountability mechanisms, and facilitate networking opportunities. The goal is to create an under-the-radar space for marketing discussions, akin to “marketing anonymous” groups, where loan officers can openly share their experiences and seek guidance. The power of collective knowledge and shared experiences can prove invaluable in navigating the ever-evolving landscape of the loan industry.
Participation and engagement are vital for the success of this collaborative endeavor. If you are a loan officer who recognizes the potential benefits of this networking and marketing club, we urge you to join us. Together, we can work towards achieving our goals and overcoming the challenges that lie ahead. Fill out the information below to express your interest and be a part of this exciting initiative.
In addition to the key points discussed above, there are a few noteworthy updates. Zillow has decided to discontinue its closing services, maintaining their streak of failed ideas. Existing home prices have risen slightly, which comes as no surprise. House Republicans have introduced a bill to rescind the FHFA loan level price adjustments, though the chances of it passing are slim. Furthermore, the FHA now requires a new form to be filled out in multiple languages, adding to the growing stack of paperwork borrowers must sign. However, it is worth questioning the efficacy of these additional disclosures, as they often go unread and may create more noise than actual protection. Perhaps this serves as an example of how disconnected legal departments can be from the behaviors and needs of borrowers.
The current state of new home sales shows promising growth, while loan officers face unique challenges in a changing market. By coming together as a network, loan officers can share insights, support one another, and navigate the complexities of the industry more effectively. It’s time to embrace a collaborative approach and strive for an “OK” status in a challenging yet opportunistic landscape.
