Will Rates Rise This Week? This Year?
If you're worried about another rate hike affecting already-high mortgage rates, here's some good news: The Federal Reserve is not expected to announce another rate hike this week. However, this doesn't mean that we've seen the end of them.
While businesses and consumers alike are hoping to hear Fed Chair Jerome Powell drop hints that suggest the end of rate hikes, no economist is ruling them out 100%. This because the year isn't over till it's over, and the Fed probably won't be sure about possible rate hikes until their next meeting. This is because Fed decisions are dependent on incoming economic data.
While inflation has cooled during 2023, we're still seeing strong numbers in employment, income and spending. But there are some newer risks. They include the current automotive strike, the ongoing writers' strike, the resumption of student loan payments and a possible government shutdown.1
It's Almost the Season to Pay It Forward
Giving back to your community is uniquely fulfilling, and it's also a powerful strategy for building your business and referral sources. Since the fall and winter holidays are coming up soon, you'll have more opportunities.
When you take the time and effort to support a local nonprofit or a one-off charity drive, you and your colleagues will be more than noticed...your business will be admired. This is why it's important to publish photos and details of your charity work online, and within your social media accounts. And if you're running a branch office or brokerage, you'll be able to recruit and retain like-minded recruits.
Contributing your personal time and effort, such as helping build a new playground or sponsoring a pet adoption event, gets you noticed while providing opportunities to introduce yourself in person. You can also invite established referral sources and past clients to join you.2
Guiding Boomers from Family to Fun House
While there's been plenty of talk about Generation Zers' and Millennials' plans for future homes, little has been said about Boomers, especially those preparing to retire. While they're probably better-prepared to move, it doesn't mean they're not nervous about their next home, especially with today's negative media to discourage them. So, it's up to you to present options that will have them spending their retirement years just where they want to be.
One problem-solving option that's foreign to many long-term homeowners: temporarily renting their current and future homes. This gives them time to decide where they would like to retire while their tenants effectively make their mortgage payments (or pay their rent if they own their home).
For example, they can rent a lake house or beachfront condo for a year so they can decide if it's as good an idea as it originally seemed, or if they're too far away from family. They'll also have time to discuss the matter with their children and other family members.
If your clients are ready to sell the family home but nervous about the costs of buying another, it's time to help them do the math and crunch some numbers. Keep these in mind:
- As before, buying a home will build equity and increase generational wealth.
- Long-term homeowners will most probably end up with a handsome profit, even after paying off any remaining mortgage or HELOC. This means they may be able to buy their next home for cash or end up with a much smaller mortgage (and much smaller monthly payments) than they realized.
- Buying in a more remote area increases their options, as these tend to sell more slowly than suburban properties. Going rural can also reduce the sticker price of their next home and their annual property taxes. Peace and quiet can be a money-saver.3
Builders Get the Blahs
After seven months of optimism, home builders are feeling somewhat pessimistic about their business. The reason isn't any surprise: high mortgage rates.
According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), single-family builder confidence fell 5 points in September to 45, putting the industry into negative territory. The decrease follows a 6-point drop in August.
All three of the index's main components declined:
- Current sales conditions fell 6 points to 51.
- Sales expectations in the next six months also dropped 6 points to 49.
- Buyer traffic decreased 5 points to 30.
NAHB added a new question to this month's survey and found that 42% of new single-family home buyers year to date were first-time buyers, which is notably higher than the historical norm of around 27%.4
A Pro Coach Explains Why Strategy is Everything
Don't have the time or budget to hire a career coach? Here are some key takeaways from a recent national sales event:
1. Play chess, not checkers
The market is shifting into a playing field that many of us have never encountered. This means you'll need to make major changes in your goals and expectations. Like chess, play strategically with your goal to be four steps ahead of the competition when our market heats up again. Become more than a sales pro; become a student. That's the game that makes up our business.
2. Know your numbers
World-class athletes are keenly aware of their numbers, as this is how performance is best measured. Similarly, studying the real estate market daily will make you a better advisor. For example, if home sales decelerate, how will you pivot accordingly? Which expenses can be cut without affecting your success rates?
3. Be courageous
Show bravery by evaluating yourself with growth, rather than failure, in mind. Personal growth must happen steadily and consistently to fuel your business growth.
4. Set your expectations wisely
A popular sales guru proclaimed: "You don't get what you want, you get what you expect." To expect and earn different results, perform differently to achieve them. Take ownership of your growth and expect more as you work towards it.
5. Cultivate powerful partnerships
Who you do business with matters, and it's been said that you are the average of the five people with whom you spend the most time with. Surround yourself with people who are grateful, ambitious, gritty, and positive. Pick your partners wisely, hold each other accountable, and maximize the relationships you've built.5
Sources: 1forbes.com, 2nar.realtor, 3keepingcurrentmatters.com, 4cnbc.com, 5housingwire.com
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