Hello, everyone! Today, we’re diving into key insights regarding mortgage rates as of late August 2024. Let’s explore how the market is shaping up and what it means for you as a potential homebuyer or investor.

I’m Elias, and I’m Alejandra with Empire Fine Homes.

"Starting with the first graph, we observe the historical trend of the 30-year fixed mortgage rate. Over the past year, rates climbed significantly, peaking earlier this year. However, things are looking up. The yellow line shows current rates, which have recently started to level off and even decline.

Projections from Fannie Mae, MBA, NAR, and Wells Fargo—shown by the dotted lines—suggest that rates may continue to decrease through the end of 2024 and into 2025. This is promising news for buyers, as lower rates can lead to more affordable monthly payments."

"Moving to the second graph, we see the impact of these rate changes. In April 2024, with a $400,000 loan at a 7.52% rate, the monthly payment was around $2,802. Now, with a 6.44% rate, that payment drops to $2,512, saving $290 per month. Over 30 years, this adds up to over $104,000 in savings."

These trends offer a great opportunity for buyers to secure better terms. Stay tuned for more updates!

Navigating the Changes: What the NAR Settlement Agreement Means for You

The real estate landscape is shifting in the wake of a landmark settlement involving the National Association of Realtors (NAR). This agreement is set to have a profound impact on real estate professionals nationwide, and here at Empire Fine Homes, we’re committed to keeping you informed about what these changes mean for you.

Understanding the NAR Settlement and Its Key Terms

This settlement concludes a significant legal challenge centered around broker commission structures. NAR’s primary goal in this agreement is to protect its members while ensuring that consumers continue to have access to a wide range of real estate services. Here are the key elements of the settlement:

• Release of Liability: NAR, its members, associated real estate boards, MLSs, and brokerages are absolved of past liabilities related to broker commissions, provided their residential transaction volume was $2 billion or below in 2022.

• Compensation Changes: One of the most impactful changes is the removal of the requirement to display compensation offers on MLS listings. This change is designed to promote off-MLS negotiations between real estate professionals and their clients, fostering more personalized and flexible interactions.

• Written Agreements: Beginning in mid-July 2024, all MLS participants working with buyers will need to establish written agreements. This move is aimed at enhancing transparency and ensuring that both parties have a clear understanding of the services being provided.

What This Means for Real Estate Professionals

The shift away from displaying compensation offers on MLS listings is a major change. At Empire Fine Homes, we recognize that this will require agents to adapt in several ways:

• Enhanced Negotiation Skills: With compensation now a matter of private negotiation, agents will need to hone their negotiation skills to effectively advocate for their clients.

• Clear Communication: It will become increasingly important to clearly articulate the value of your services to clients, helping them understand the benefits of working with a skilled real estate professional.

• Marketing Adjustments: The way agents market their services may also need to evolve to reflect these changes, with a greater emphasis on transparency and client education.

Impact on Buyers and Sellers

For our valued clients, these changes bring a new level of transparency and potential empowerment:

• Buyers: With more room to discuss and understand the fees involved in a transaction, buyers could find themselves in a stronger position to negotiate terms that work best for them.

• Sellers: Changes in how properties are marketed on MLSs—particularly concerning financial incentives offered to buyer agents—could influence how sellers approach listing their homes.

Looking Ahead: The Future of the Real Estate Market

This settlement could usher in significant shifts across the real estate market:

• Market Adaptation: As agents and clients adjust to these new norms, we may see innovation in how services are offered and how properties are marketed.

• Technological Advances: We anticipate the emergence of new technologies and platforms designed to facilitate off-MLS negotiations, ensuring compliance and streamlining processes.

• Regulatory Developments: This settlement could pave the way for further regulatory changes, potentially affecting how compensation and real estate services are managed on a broader scale.

Conclusion

At Empire Fine Homes, we believe that the NAR settlement is a turning point that will reshape the real estate industry, leading to greater transparency and flexibility. As we navigate these changes together, staying informed and adaptable will be key. Ultimately, we see this as an opportunity to better serve our clients, helping them achieve their real estate goals in a more consumer-focused market.

Hey there! Deciding what to do with your house when it's time to move? Should you sell and start a new adventure or keep it as a rental to build some long-term wealth? That's a great question, and it's not always an easy one. Whether you're curious about earning income from renting or worried about the challenges of being a landlord, there's a lot to think about. Let's dive into some key questions to help you decide. First up, is your house a good fit for renting? If you're moving far away, the neighborhood isn't ideal for rentals, or the house needs a lot of work, selling might be your best bet. Next, are you ready for the realities of being a landlord? It's more than just collecting rent. You could be handling late-night maintenance calls, repairing damages, or dealing with tenants who break their lease. And don't forget about the costs. Even if renting sounds profitable, there are expenses like mortgage payments, property taxes, insurance, and upkeep. Plus, if your property is empty between tenants, that's lost income. Ultimately, whether you sell or rent your home depends on your personal situation. It's important to weigh the pros and cons and get professional advice so you can make the best decision for your future. If this video helped you, give it a thumbs up and subscribe to our channel for more real estate tips! And if you have any questions or need personalized advice, we're here to help. Thanks for watching, and see you next time!

The uncertainty the world faces today due to the COVID-19 pandemic is causing so many things to change. The way we interact, the way we do business, even the way we buy and sell real estate is changing. This is a moment in time that’s even sparking some buyers to search for a better deal on a home. Sellers, however, aren’t offering a discount these days; they’re holding steady on price.

According to the most recent NAR Flash Survey (a survey of real estate agents from across the country), agents were asked the following two questions:

1. “Have any of your sellers recently reduced their price to attract buyers?”

Their answer: 72% said their sellers have not lowered prices to attract buyers during this health crisis. 

2. “Are home buyers expecting lower prices now?”

Their answer: 63% of agents said their buyers were looking for a price reduction of at least 5%.

What We Do Know  

In today’s market, with everything changing and ongoing questions around when the economy will bounce back, it’s interesting to note that some buyers see this time as an opportunity to win big in the housing market. On the other hand, sellers are much more confident that they will not need to reduce their prices in order to sell their homes. Clearly, there are two different perspectives at play.

Bottom Line

If you’re a buyer in today’s market, you might not see many sellers lowering their prices. If you’re a seller and don’t want to lower your price, you’re not alone. If you have questions on how to price your home, let’s connect today to discuss your real estate needs and next steps.

With all of the unanswered questions caused by COVID-19 and the economic slowdown we’re experiencing across the country today, many are asking if the housing market is in trouble. For those who remember 2008, it’s logical to ask that question.

Many of us experienced financial hardships, lost homes, and were out of work during the Great Recession – the recession that started with a housing and mortgage crisis. Today, we face a very different challenge: an external health crisis that has caused a pause in much of the economy and a major shutdown of many parts of the country.

Let’s look at five things we know about today’s housing market that were different in 2008.

1. Appreciation

When we look at appreciation in the visual below, there’s a big difference between the 6 years prior to the housing crash and the most recent 6-year period of time. Leading up to the crash, we had much higher appreciation in this country than we see today. In fact, the highest level of appreciation most recently is below the lowest level we saw leading up to the crash. Prices have been rising lately, but not at the rate they were climbing back when we had runaway appreciation.

2. Mortgage Credit

The Mortgage Credit Availability Index is a monthly measure by the Mortgage Bankers Association that gauges the level of difficulty to secure a loan. The higher the index, the easier it is to get a loan; the lower the index, the harder. Today we’re nowhere near the levels seen before the housing crash when it was very easy to get approved for a mortgage. After the crash, however, lending standards tightened and have remained that way leading up to today.

3. Number of Homes for Sale

One of the causes of the housing crash in 2008 was an oversupply of homes for sale. Today, as shown in the next image, we see a much different picture. We don’t have enough homes on the market for the number of people who want to buy them. Across the country, we have less than 6 months of inventory, an undersupply of homes available for interested buyers.

4. Use of Home Equity

The chart below shows the difference in how people are accessing the equity in their homes today as compared to 2008. In 2008, consumers were harvesting equity from their homes (through cash-out refinances) and using it to finance their lifestyles. Today, consumers are treating the equity in their homes much more cautiously.

5. Home Equity Today

Today, 53.8% of homes across the country have at least 50% equity. In 2008, homeowners walked away when they owed more than what their homes were worth. With the equity homeowners have now, they’re much less likely to walk away from their homes.

Bottom Line

The COVID-19 crisis is causing different challenges across the country than the ones we faced in 2008. Back then, we had a housing crisis; today, we face a health crisis. What we know now is that housing is in a much stronger position today than it was in 2008. It is no longer the center of the economic slowdown. Rather, it could be just what helps pull us out of the downturn.

With over 90% of Americans now under a shelter-in-place order, many experts are warning that the American economy is heading toward a recession, if it’s not in one already. What does that mean to the residential real estate market?

What is a recession?

According to the National Bureau of Economic Research:

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

COVID-19 hit the pause button on the American economy in the middle of March. Goldman Sachs, JP Morgan, and Morgan Stanleyare all calling for a deep dive in the economy in the second quarter of this year. Though we may not yet be in a recession by the technical definition of the word today, most believe history will show we were in one from April to June.

Does that mean we’re headed for another housing crash?

Many fear a recession will mean a repeat of the housing crash that occurred during the Great Recession of 2006-2008. The past, however, shows us that most recessions do not adversely impact home values. Doug Brien, CEO of Mynd Property Management,explains:

“With the exception of two recessions, the Great Recession from 2007-2009, & the Gulf War recession from 1990-1991, no other recessions have impacted the U.S. housing market, according to Freddie Mac Home Price Index data collected from 1975 to 2018.”

CoreLogic, in a second study of the last five recessions, found the same. Here’s a graph of their findings:

What are the experts saying this time?

This is what three economic leaders are saying about the housing connection to this recession:

Robert Dietz, Chief Economist with NAHB

“The housing sector enters this recession underbuilt rather than overbuilt…That means as the economy rebounds – which it will at some stage – housing is set to help lead the way out.”

Ali Wolf, Chief Economist with Meyers Research

“Last time housing led the recession…This time it’s poised to bring us out. This is the Great Recession for leisure, hospitality, trade and transportation in that this recession will feel as bad as the Great Recession did to housing.”

John Burns, founder of John Burns Consulting, also revealed that his firm’s research concluded that recessions caused by a pandemic usually do not significantly impact home values:

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices).”

Bottom Line

If we’re not in a recession yet, we’re about to be in one. This time, however, housing will be the sector that leads the economic recovery.

Some Highlights:

• Believe it or not, there are lots of things you can do to prep your house for a sale without even going to the store.
• Your real estate plans don’t have to be completely on hold even while we’ve hit the pause button on other parts of daily life.
• Tackling small projects from cleaning the corners you may normally skip to tidying up your yard are easy and necessary wins if you’re thinking of listing your house and making a move.