Last chance at our giveaway

If you haven’t had a chance to enter our exciting giveaway, now is literally the time to do it. Entries close today, February 28th, at 9pm ET/6pm PT!

We’ve got some truly terrific prizes. You can win a $250 Amazon gift card and a 1-year membership to Estate Elite (valued at $1500) where you can direct coaching from the top agents in the luxury business, including us!

This giveaway is open to both new and existing subscribers to this newsletter.

Here’s how to enter:

1. Make sure you are subscribed to this newsletter (odds are you already are!)

2. Follow us on Instagram: @estateeliteagents and @readtheblueprint

3. Tag TWO friends on our Instagram post HERE

4. Fill out this survey HERE

TWO winners will be chosen on Tuesday, March 4th.

Good luck!

– James and David

Dramatic fall in mortgage rates

Freddie Mac reports that the average rate on 30-year fixed home loans fell to 6.76% for the week ending Feb. 27th, down from 6.85% the week before. Realtor.com says that’s “the most dramatic decrease since mid-December.” 

This week's decline in mortgage rates closely followed the falling yield on the 10-year Treasury. As of today, the 10-year Treasury yield (4.26%) is 76 bps below the cycle high (5.02% in October 2023). For reference, mortgage rates reached this cycle’s high of 8.03% in October 2023.

Our take

Mortgage rates are highly correlated to the movement of the 10-year Treasury yields. If they fall, so do mortgage rates. Right now, bond yields are falling because many anticipate a slowing economy and a possible recession since the economy is flashing red on many fronts. For example, the Conference Board’s consumer confidence index fell more than expected to its lowest level since June. Bond markets are very fickle. Since we can’t say how long or how far they will continue to decline, get this news to interested buyers as quickly as possible. Since buyers can also get many concessions, use these falling rates as an opportunity to get them to pounce.  

We’re giving away an Amazon gift card valued at $250 USD and a 1-year membership to our new luxury real estate program, Estate Elite (valued at $1500), to both new and existing subscribers to the Blueprint Newsletter. Here’s how to enter:

1. Subscribe to the Blueprint Newsletter (if you haven't already!)

2. Follow us on Instagram: @estateeliteagents & @readtheblueprint

3. Tag TWO friends on our Instagram post

4. Fill out the survey included in the newsletter (it’s quick and easy!)

Entry closes at 6 PM (PST) on February 28, 2025, and two winners will be announced on Instagram on March 4, 2025. Click here to enter!

Where homeownership is the highest

Even as affordability has worsened, the national homeownership rate has remained relatively stable over the past few years. That’s the central conclusion from Property Shark’s latest analysis of real estate data compiled by the U.S. Census Bureau.

By the “homeownership rate,” Property Shark means the percentage of occupied homes where the resident is also the owner. The current homeownership rate in the United States is 65.2%. Although this rate has remained stable nationally since 2020, there are wide regional variances, even within individual states.

Here are the states/areas with the highest and lowest rates of homeownership:

Our take

You know how much we love myth-busting in this newsletter. That’s why this report caught our attention. Among other things, it challenges the assumption that high-homeownership states are full of high-ownership cities. The top 10 cities for homeownership are in Florida, Virginia, Arizona, Nevada, and Texas, yet none of these states rank in the top 20 for overall ownership. On the flipside, Michigan has the second-highest homeownership rate of any state (73.7%), but Detroit lags at just 53.8%. Low rents also don’t seem to suppress homeownership. West Virginia has the lowest median rent in the continental U.S. but has one of the highest ownership rates. Mississippi, the Dakotas, and Kentucky follow a similar pattern, all exceeding 63.7%, with most nearing 70%.

Metros with the highest zombie foreclosure rates

212,268 zombie residential properties are currently in the foreclosure process within Q1 of this year, according to ATTOM's latest zombie foreclosure report. A zombie property is a home that is deemed vacant and currently in the foreclosure process, but has not yet been officially repossessed by the lender. It’s neither lien-free nor fully foreclosed. By contrast, a vacant property is an unoccupied home, whether due to abandonment or death.

This latest ZF rate represents a 1.5% decrease from Q4 2024 and a 12.6% drop from Q1 2024. Foreclosure activity has now fallen for five consecutive quarters, following a surge that occurred after the nationwide moratorium on foreclosures—imposed during the COVID-19 pandemic—was lifted in mid-2021.

Here are the metros with the highest zombie foreclosure rates:

1. Peoria, IL – 15.5%

2. Wichita, KS – 12.5%

3. Kansas City, MO – 10.9%

4. Toledo, OH – 10.6%

5. Fort Wayne, IN – 10%

6. Youngstown, OH – 9.1%

7. Cleveland, OH – 9.1%

8. St. Louis, MO – 8.9%

9. Canton, OH – 8.7%

10. Indianapolis, IN – 8.5%

Our take

An increasing number of real estate investors are looking to use vacant and zombie properties as potential cash flow streams. While inventory is spiking, it’s still historically low, so developers and flippers are refurbishing older properties and either selling them or using them as rentals. Share this report with your real estate investor clientele. It’s valuable for any real estate wholesaler, buyer, or investor looking to pick up a property well below market value.

The news that just missed the cut

• Local content to use to drive engagement

• Homebuilders unsold inventory reaches the highest level in 16 years 

• These are the top states for finding a fixer-upper

• New San Francisco law makes office conversions possible

• 5 lead gen ideas to fill your pipeline from NAR

Foundation Plans

Advice from James and David to win the day

Agents should always be prepared to help buyers navigate the financial side of the home-buying process, but this is especially true right now. Even though it’s a buyer’s market nationally, most buyers need encouragement to get off the sidelines. They also need guidance on how to leverage their resources to get the best possible home for them. Today we’d like to go over some common hurdles that buyers face during the process, and how to overcome them.

Down payment or closing cost issues – If a buyer is short on their down payment, there are options. First, find out exactly how much the lender requires, and see if it would help for the buyer to switch to a different loan product. Ask if it is possible to use gift funds to make up the difference. Sometimes, borrowers can cash out an investment account, 401k or another account to build up their down payment. They could also get a co-signer and solve the problem. That’s not all. Check to see if your buyer qualifies for any of these down payment assistance programs.  

Debt-to-income ratio issues –  Encourage buyers to pay down debts and not take on any new debt until after closing. Typically, the total debt-to-income ratio should be 36% or less, and the total housing expense should be 28% or less. If your buyer has a high DTI, several strategies could help lower it. The buyer could pay off a credit card / student loan / car loan / etc. Find out if the loan has to be paid off or just paid down. Ask the lender if a different loan product would require a different ratio. If your buyer is self-employed, their DTI is based on their post-tax or net income, not their pre-tax or gross income. Because many self-employed individuals take a lot of business deductions to reduce their tax burden, they often wind up with a low taxable income. Consequently, they should consider taking fewer deductions to increase their net income. This may result in a higher tax burden, but it can make qualifying for a mortgage easier. 

Credit score issues – These issues need to be dealt with at the very start of the homebuying process. They come in two forms: low scores or a specifically damaging item like a tax lien or a recent default. Find out which one you are dealing with. If the buyer’s score is too low — by about 15 points or less — it is probably fixable with a few easy remedies. Ask the buyers to use Experian.com to update their credit and correct errors. They can use Experian Boost to improve scores. If the buyer’s credit score is too low for the loan product, the borrower might need to switch to FHA or a more lenient type of mortgage.

As you can see, this is a big topic. We’ve only begun to scratch the surface. It’s key that agents approach these issues with a problem-solving mindset, and that they know all the options out there. Start here and here to learn more.

If you weren’t in the room for Mastering the Mindset of a Luxury Real Estate Expert with James Harris & David Parnes, you missed some serious game-changing insights—but don’t worry, the replay is waiting for you inside Estate Elite!

And that’s not all—next week’s live sessions are ones you can’t afford to miss:

📍 Selling Yourself Before the Listing Appointment with Glennda Baker – Learn how to win the client before you even walk through the door.

📍 Negotiation & Closing Strategies for High-Stakes Deals with Josh Flagg – Get insider strategies to close big deals like a pro.

Start your 14-day free trial now to watch the replay AND join next week’s live sessions.

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Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“If you really want to be great at something you have to truly care about it. If you want to be great in a particular area, you have to obsess over it..” — Kobe Bryant

Even beyond Kobe’s many amazing achievements, his mindset and approach to life are even more impressive. Take some time this weekend and watch this to understand what we’re talking about. Don’t let time simply sweep you up, friends. Choose to be great.

– James and David