Putting it all in perspective

Our readers know that we think it’s crucial to always look at historical context when discussing the current situation in our industry. By comparing past facts and figures, we can better understand what’s happening in the market now.

In our first story, we have an eye-opening story about how much homeowners are spending on their mortgage payments compared to nearly two decades ago. 

In our second story, we explain why the recent hubbub over delinquencies isn’t all it’s cracked up to be. 

In our third story, we discuss why home equity over the past couple years has hit levels we haven’t seen in a long, long time (so much that we weren’t even around to see them!)

We think this type of info, and context, can help clients understand the market better, and that’s why we think you’ll be doing them a great service if you share it.

And now, on with the Blueprint!

– James and David

The surprisingly strong financial footing of homeowners

American homeowners are spending LESS of their disposable income on mortgage payments now than in 2007. Homeowners now only spent 5.8% of their disposable income on mortgage payments in Q4 2024, down from 9.0% in Q4 2007. That startling fact comes from an eye-opening new report from Resiclub on the financial health of homeowners. The report shows that, despite higher home prices and interest rates, the market is on solid ground. Here are a few key highlights:

• 96% of mortgage debt is fixed-rate, with most being 30-year fixed loans (France is the only other country that offers a similar structure)

• Nearly 40% of owner-occupied homes are mortgage-free, giving those homeowners significant financial stability

• Lending standards have tightened significantly since the 2007–2008 crisis, contrary to lingering public perception

Our take

This report is a powerful reminder of how resilient homeowners have been. Despite the fastest Fed rate hike cycle in 40 years, they’ve fared far better than in 2008, thanks to fixed-rate mortgages, stricter lending, and a large share of them owning homes outright. Unlike in the U.K. or Canada, most homeowners aren’t facing payment resets, and many can leverage equity to buy all-cash. That said, the picture isn’t all rosy. Credit card delinquencies are rising, pointing to growing pressure on lower-income households. Housing affordability remains a major challenge for buyers, and renters are increasingly cost-burdened because we have yet to seriously grapple with the massive housing shortage facing the country.

Settling the controversy over homeowner delinquencies

A big flap broke out on social media over the weekend with some users trying to claim that single-family homeowner delinquencies are spiking. As Ricky Carruth rightly pointed out, that’s simply not true.

Yes, the national single-family homeowner delinquency rate went up 5 basis points (bps) to 3.53% in February. But while that’s up 19 bps from a year ago, it’s still 32 bps below where it was entering the pandemic. That’s according to the latest update from Intercontinental Exchange (ICE), a leading provider of housing financial data.

The data being cited referred to multifamily delinquencies, not single-family homes. The actual data shows total credit stress for loans marked “severe derogatory” still hasn’t even reached pre-COVID levels.

FHA mortgages accounted for 90% of the 131K year-over-year rise in the number of delinquencies, despite making up less than 15% of all active mortgages. The number of properties that are 30 or more days past due, but not in foreclosure, is 1.91 million, up from 1.78 million a year ago.

Our take

This is a good example of the importance of knowing where to get good, reasoned info. We (unfortunately) live in a world where, sometimes, bad info can travel faster than good info, and that appears to be what happened here. We always remind agents to check their sources and not get caught up in the hysteria that sometimes leads people in our industry, or those on random social media accounts, to overreact. Bottom line: single-family homeowner delinquencies are NOT elevated.

Markets where home equity grew the most

Home equity, the portion of property that homeowners truly own, surged by $3.2 trillion last year, reaching its third-highest level on record. According to Realtor.com, at the close of 2024, the total value of equity held by homeowners equaled $34.7 trillion. When measured as a share of real estate value, home equity is at 72.2%, matching Q1 2024. The last time home equity was this high as a share of real estate value was before 1960.

Here are the top 10 markets where home equity grew the most last year:

1. New Jersey: $39,000

2. Connecticut: $36,000

3. Massachusetts: $34,000

4. Rhode Island: $33,000

5. Maine: $30,000

6. New Hampshire: $27,000

7. New York: $15,000

8. District of Columbia: $15,000

9. California: $14,000

10. Nevada: $13,000

Our take

A lot of homeowners don’t realize just how much their net worth has grown in the past year. In places like New Jersey and Massachusetts, homeowners gained $30K+ in equity last year. That’s a big deal. Some owners might be sitting on enough equity to finally move up, cash out, or invest in something new, and they just need someone to help them see the bigger picture. This is a perfect moment for agents to check in, share insights, and offer guidance. Sometimes all it takes is a quick chat to turn equity into opportunity… for them and for you.

The news that just missed the cut

• Rocket Companies buys Mr. Cooper and Redfin

• Stop asking this question to home buyers

• Get to know Gladwyne, the most expensive neighborhood in Pennsylvania

• Use this email template to secure more listings

• The “Devil Wears Prada” loft has hit the market for $9 million

Foundation Plans

Advice from James and David to win the day

In today’s edition, we conclude our two-part series highlighting certain skills every agent should hone before walking into any listing appointment. In addition to the skills we’ve mentioned already, these skills will give you the knowledge and confidence you need to make a good impression.

Know the most recent comps – Agents worth their salt MUST know the most recent comparable sales, and understand why they sold for those prices. This is a surefire way to build confidence with clients and demonstrate that you have your finger on the pulse of your local market.

Communicate what sets you apart – Agents should be prepared to communicate their unique approach to the business. Do you market properties in a unique way? Do you do video content? Do you host more open houses than other agents? Do you have an extensive database of buyers or agents? The more specifically you can list these approaches, the more you will sway clients in their decision-making.

Know your worth and your non-negotiables – Obviously, commission rates are negotiable, but you need to set your limits in advance. Determine your no-go zone before the appointment so you know exactly where you’ll want to draw the line. Think how you want to present yourself and handle objections you might get from clients. The more you prepare, the easier it will be to answer these questions. You want to make sure you are entering an arrangement that is worth your time and energy.

We’ve given you the basics, but there is a lot more to know to master your listing pitches. Start here and here to learn more.

Just in Case

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

“The distance between dreams and reality is called discipline.” — Paulo Coelho

Strive to make your dreams a reality, friends. Discipline—more than motivation—is what will carry you forward. Show up, and take action, even on the days you don’t feel like it. You don’t need to be perfect; just focus on getting a little better every day.

– James and David