Mortgage Demand Surges After Fed Suggests Rate Hike Pause
After 14 months of Federal Reserve rate hikes, chairman Jerome Powell hinted at a potential end to the inflation cooling strategy.
This had a positive effect on mortgage rates. They fell slightly in the first week of May, which was all some consumers needed to consider a move or refinance.
While applications for new purchase loans increased by around 5%, they were still over 30% lower than the same week a year ago. However, some sellers' agents are encouraging clients to raise their listing price slightly, expecting more springtime buyer interest. Low inventory in many areas still provides a sellers' advantage.1
FHFA Cancels Unpopular Fee Changes
Many were angry, many complained and the FHFA listened.
Last week, the Federal Housing Finance Agency (FHFA) announced an end to the upfront fees based on buyers' debt to income (DTI) ratios for conforming loans. FHFA Director Sandra Thompson said that she appreciated the feedback received from the mortgage industry and would "continue this valuable dialogue". Whether this will change minds down the line remains to be seen.2
Creative Ways to Promote New Listings In A Slow Market
Even though the Great Relocation of 2020-2022 is still active in some areas, you may still be having some trouble creating strategies to locate new listings in a much quieter market.
If you feel you're spending all day trying to lasso unicorns, here are three ideas to consider.
Send handwritten CMAs
Delivering a current Comparative Market Analysis (CMA) is a smart way to stay top-of-mind with past clients, and you can send them to family, friends and anyone within your sphere of influence. People love to receive handwritten snail mail, and they love knowing what their house is worth. Your home value update tells them you're active and up-to-date. If you have the budget, add a premium item. This turns your hand-addressed mailing into "lumpy mail", which is almost always opened first.
Play musical homes with move-ups and boomers
Many of today's Boomers (aged 59 and up) are empty nesters rattling around in three- and four-bedoom homes. If they're living on fixed retirement income, they may be looking for new ways to keep more of it. One strategy: contact your past clients in smaller homes and see if any are thinking of moving up to a larger property. If anyone says yes, you can reach out to the Boomers in areas they would like to move into, and see if anyone's ready to downsize, as you've already got the lowdown on a smaller home that hasn't even hit the market yet.
Humor your prospects
The internet is for more than business...it's for sharing funny memes. Instagram users alone share a million of these each day. Your assignment: find real estate-themed memes that are amusing and also send the message that you're on the hunt for new clients.
Creating your own memes is easy, as plenty of sites provide ready-made photos and easy methods for adding your own messaging.3
Why You Should Encourage New Agents, No Matter What
When someone tells you they're planning to become a real estate agent, or mentions they're taking their exam soon, how do you respond?
Hopefully you're not one of the pessimists who recommend that they keep their day job.
One example: when a member of an agents' social media group asked for exam tips, most responses were to simply be confident...but a few grinches said not to bother. These responses were more than unhelpful; they may disillusion someone who's working overtime to make a career change. And a pessimistic comment tells others you're a weaker agent.
Instead, take a positive approach. Sharing your first-year experiences is some of the best intel you can provide. Or go a step further and offer mentoring. If nothing else, offer meaningful encouragement and welcome them to a job you love – even if you love to hate it sometimes.4
Quiet Quitting Hits the Housing Market Sources: 1cnbc.com,
2fhfa.gov,
3lightersideofrealestate.com,
4theamericangenius.com,
5businessinsider.com
While some housing markets enjoy the usual springtime bump in sales, others have ground to a near-halt. Redfin's chief economist even went as far as to describe the state of these markets as "quiet quitting" by first-time and repeat home buyers. Her May 1 tweet was in response to data that reported new listings being down by more than 20% year-over-year.
It's not surprising that more homeowners are choosing to stay put with their low mortgage rate, rather than financing a new home at a rate that could be twice as high. In turn, this translates into fewer homes on the market, with low inventory contributing to higher prices.
Even though it's doubtful that rates will return to 2021 rates, many of today's quiet-quitting buyers are still lusting over the 2.96% rates for 30-year mortgages from just two years ago.5
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