HUD Announces Cheaper FHA Mortgage Insurance Premiums
Here's some good news for your prospective buyers, especially those worried about affordability.
Recently, the Department of Housing and Urban Development (HUD) announced a 30-basis point reduction to the annual mortgage insurance premiums (MIP) for FHA loans. This translates into around $800 in savings annually for buyers of homes priced at $265,000. FHA loan borrowers who purchase homes priced at $467,700 – the national median home price as of December 2022 – will save over $1,400 annually, thanks to the new MIP reduction. These lower MIP rates will also enable me to qualify more of your FHA loan applicants.1
Fannie Mae Revises Property Appraisal Guidelines
Almost every agent has worked with clients who fretted while waiting for a property appraisal to be completed, especially since appraisals that deliver a lower value than expected can result in a delayed or cancelled closing.
GSE Fannie Mae recently announced changes to the valuation process that are expected to simplify and streamline future appraisals.
Fannie Mae's March Seller Guide stated that the updates are part of making the "home valuation process more efficient and accurate" and are part of a transition to a range of options to establish a property's market value. These changes are also expected to expedite the appraisal process, contribute to more accurate appraisals, and help lower costs.
If you have concerns about an upcoming appraisal for one or more of your listings, or would like to learn more about these appraisal changes, feel free to contact me.
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2022 Ends with Lower Home Prices
The latest property data contained good news or bad news, depending on whether your clients are buyers or sellers. Residential prices for December 2022 were 5.8% higher year-over-year, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. Prices are now 4.4% below their June 2022 peak and well below 2021′s record-setting 18.9% gain.
The Home Price NSA Index concentrates on these 10 cities: Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington, DC. The annual increase for this 10-city composite was 4.4% in December 2022, down from 6.3% in the previous month. The 20-city composite, which includes the Seattle and Dallas areas, marked a 4.6% year-over-year gain, down from 6.8% in the previous month.3
Bring A Listing's Hidden Talents to The Front Yard
While yard sign riders with messages like Coming Soon are often seen during hotter real estate markets, riders with the right message bring in considerably more prospects during slower markets.
Here are some strategies for attracting more buyers with the right riders (and remember, custom riders are easily ordered online).
Tell prospects about hidden features. These can be anything from a back yard swimming pool to a basement. If the home was recently renovated, a message like I'm Gorgeous Inside can help prospects see past an unassuming exterior.
Pet-friendly homes are hot. Recent surveys show that most pet owners (over 80%!) plan to buy a home that caters to their pets' needs. Homes with large, well-fenced back yards will benefit from a Dog-Approved Yard or Pet Friendly rider. Cat lovers will perk up their ears at riders telling them that a home features a back yard "catio" to keep felines and songbirds safe.
Don't be afraid to be witty. All it takes is a fun message to help drive-by prospects grab their phones and pull up your listings. Some agents have gone for subtle messages such as You Know You Want Me. Another turned a possible detraction – a cemetery across the street from a property – into a plus, with a rider that mentioned Quiet Neighbors Across the Street.4
New Home Sales on The Rise
Builder confidence rose earlier this year along with an improving business outlook. Sales of new homes rose to a 10-month high earlier this year, but the current economic climate and rising mortgage interest rates could slow down a market recovery.
The U.S. Commerce Department reported that new home sales increased 7.2% in January, which brought numbers to a seasonally-adjusted annual rate of 670,000 properties. This was the highest level since March 2022 and outperformed economists' predictions by 50,000 properties.
On a regional basis, home sales surged in the South, which continues to be a popular relocation destination for companies who prefer a business-friendly, low-tax state. However, property sales fell in the Midwest, Northeast and West.
Perhaps the biggest obstacle to a major market turnaround: the Federal Reserve's plans to continue raising interest rates this year until inflation numbers fall to an acceptable level.5
Sources: 1hud.gov, 2nationalmortgageprofessional.com, 3cnbc.com, 4foamcoreprint.com, 5rueters.com
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