Today's Market News:

Rates Fall to Under 5% In August
U.S. mortgage rates have continued to decrease, dropping below 5% for the first time in four months. Earlier this month, the 30-year fixed-rate mortgage fell to an average of 4.99%, according to Freddie Mac.

A week earlier, rates hovered around 5.30%. It was the most significant mortgage rate drop since early July. The rising cost of borrowing contributed to the steep drop in housing demand in June, while housing prices continued to decline as well. However, they were still higher than they were at this time last year.¹

Homeowner Equity Sees Dramatic Increase in Q2
In the second quarter of this year, 48.1% of mortgaged residential properties were deemed equity-rich, according to a recent US Home Equity & Underwater Report. This means that the combined estimated amount of loan balances secured by these properties was no more than half of their estimated market values. In Q1 of 2022, that number was 44.9% and 34.4% in Q2 of 2021.

This Q2 increase means virtually half of all mortgage payers are in the equity-rich territory – the highest percentage on record. At the same time, just 2.9% of mortgaged homes were considered seriously underwater in Q2 of this year – the lowest percentage recorded. The second quarter improvement in home equity was due mainly to soaring home values. And even though home price appreciation seems to be cooling because of higher interest rates, it's expected that homeowners will continue to build their equity for the remainder of the year.²

Three Ways to Improve Your Listing Presentations
Convincing potential clients that you're the best agent for them is an important step to successfully growing your real estate business. One of the best ways to do that is by creating a powerful listing presentation. This is essentially how you present yourself when you're interviewed by a potential seller. Here are three things you can do to sharpen your listing presentations going forward:

1. Include Meaningful Stats.
Demonstrate your qualifications right out of the gate by presenting your certifications, designations, and sales statistics. Be sure to share the number of homes you've recently sold as well as the average sales price.

2. Incorporate Graphics.
To position yourself as a knowledgeable resource on the local market, use graphic creation tools to show local data visually. It's a more effective way to convince potential clients of your expertise.

3. Develop Impactful Scripts.
When meeting potential clients in person, reduce any anxiety you may feel by creating powerful scripts. Write them out and practice them until you feel comfortable delivering them face-to-face.³

Get a Glimpse of the Average Seller and How They Behave
Zillow's 2022 Consumer Housing Trends Report provides an interesting look at the typical home seller in the U.S. Here are five key takeaways:

Demographics.
The average home seller is 46 years old, Caucasian, is partnered, married, or previously married, has some college education, and has a household income in the low $80,000 range.

Transactions.
Seven in 10 sellers reported buying a home in addition to selling one. Of these dual seller-buyers, just 4% upgraded to a more expensive home, a sharp drop from 55% in 2021.

Listings.
Sellers who included a virtual tour were more likely to receive at least one all-cash offer (70%) than those who did not include a virtual tour (56%), and they typically sold for 22% more.

Open Houses.
The typical seller still holds an open house, but the number of sellers who chose not to hold even one open house fell to 33% this past year, compared to 43% in 2021.

Offers.
The average seller received two offers, but many reported receiving more than that. Almost 25% of sellers reported getting a minimum of four offers, up from 14% in 2020.⁴

Factors Affecting 2022 Mortgage Rates
When the Fed raises interest rates, mortgage rates are likely to follow – right? Well, not exactly. In the wake of the Fed increasing its benchmark rate by 75 basis points, the average 30-year fixed mortgage rate fell.

Over the course of three days in late July, mortgage rates dropped from 5.54% to 5.22% and then again to 5.13%. Why did this happen? The determination of mortgage rates is based on several factors.

In addition to Fed rate changes, rates are also affected by jobless claims and unemployment, inflation, and supply and demand. In fact, mortgage rates are more closely tied to treasury yields and mortgage-backed securities than to the federal funds rate. The ongoing uncertainty about the economy has caused a decrease in new loan and refinance applications. To combat this lack of demand, lenders slightly reduced rates.⁵

Sources: ¹nbcnews.com, ²themreport.com, ³mckissock.com, ⁴nationalmortgageprofessional.com, ⁵therealdeal.com