The “razzle-dazzle”

There is so much to learn in this business that it’s always fun when we can highlight some new data point or angle that might fly under a lot of people’s radar.

For example, did you know that mortgage rates aren’t the same across the country? They actually vary state-by-state. It’s not by much, but it’s an interesting tidbit to mention to potential clients and show that you really know your stuff.

On that note, we are starting a two-part series on preparing for listing appointments. We want to help you make a killer impression, so we’re sharing some of our best advice on how to stay a couple steps ahead of your clients.

With that, let’s move ahead with this fresh edition of The Blueprint!

– James and David

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Home prices smash another record

The median U.S. home sale price hit an all-time high of $394,000 during the four weeks ending June 9th. That’s up 4.4% year-over-year and marks the biggest increase in about three months, according to Redfin. Here’s what else the company reports:

• 6.5% of home sellers are cutting their asking price, the highest percentage since November 2022. 

• $2,829 is now the typical homebuyer’s monthly housing payment, down $30 from April’s record-high

• Pending home sales are down 3.5% YOY

• New listings are up 7.8% YOY

• Mortgage-purchase applications are up 9% week-to-week

Our take

These high home prices don’t surprise us. Even though the number of new listings is going up, it’s still below the typical number we see this time of year. But we are seeing some changes. Just the slight dip in mortgage rates last week caused a 9% jump in mortgage applications. On top of that, after the latest CPI report, mortgage rates have fallen to their lowest level in three months. Expect to see an uptick in demand in the coming weeks. Now about that CPI report…

Latest updates on CPI report and the Fed

Yesterday was a busy day. The Bureau of Labor Statistics released its latest CPI report on inflation, and the Fed concluded its June FOMC meeting. Here are the key takeaways from both the report and the press conference from Fed Chair Jerome Powell:

• CPI Inflation dropped 3.3% YOY increasing 0% MOM

• Core CPI inflation dropped 3.4% YOY (lowest since April 2021) but grew 0.16% MOM

  • For perspective, Core CPI was expected to grow by 0.28% MOM and, on an annual basis, it’s down 0.2% from last month’s 3.6%

• Both two-year and 10-year yields on Treasuries were down 0.14%.

• The Fed held interest rates steady in a range between 5.25% and 5.5%

• The Fed projects one interest rate cut before the end of the year

Our take

As we expected, the Fed didn’t cut interest rates yesterday. Even though the CPI report was exactly what the doctor ordered, it’s just one data point, and not enough to move the needle. It’s possible that rising home insurance and maintenance costs could fuel inflation in rents this year and beyond. Still, we don’t want to undersell the importance of the CPI report. It’s a great step in the right direction. If things continue on this path, the Fed will likely cut rates in September. Until then, expect mortgage rates to remain elevated.

States with the highest and lowest mortgage rates

Mortgages are not the same across the country; they actually vary slightly state-by-state. There is a 0.38% difference between the highest (Vermont at 6.88%) and lowest (Hawaii at 6.49%), according to Curinos, a financial services data provider. On a 30-year, $500,000 mortgage, a 38-point reduction would save a homebuyer around $127 per month. 

Here are the states with the highest and lowest mortgage rates:

Our take

This truly brings new meaning to the phrase “Location Matters”. Now, obviously, mortgages vary given the creditworthiness of the borrower, but, interestingly, there are factors that cause mortgages to vary from state to state like the number of lenders, how much potential buyers shop around, and regulations like foreclosure laws. States with more complex foreclosure processes tend to have higher rates. Since the timeline is much longer, the risk to the lender is greater. This is another talking point you can add to your repertoire. Artfully dropping tidbits like this subtly conveys that you’re a true knowledge broker!

Schematics

The news that just missed the cut

• It’s official – Military buyers using VA loans can pay their agents

• Offerpad partners with Realtor.com to expand cash offers

• What to expect from the housing market in the second half of 2024 

• Learn why certain homes just sit and don’t sell

• At $94 million, this is the largest home sale in SoCal in 2024

Foundation Plans

Advice from James and David to win the day

The summer market is in full swing. With all the changes after the NAR settlement, competition for listings is even more intense than ever. In this edition and Tuesday’s edition, we will highlight certain skills we think every agent needs so they can walk into any listing appointment with confidence.   

Know your potential client – Before you go into your appointment with a potential client, research them. Your goal isn’t to snoop on them, but to get a sense of who they are and what their motivations might be. Use resources like LexisNexis or TLO. If you can’t access them, use Linkedin, Google, and social media platforms. Here are questions to guide your research:

• When did they purchase their current home?

• Do they have children?

• Are they planning on moving?

• What do they do for work? Has anything changed causing them to sell?

Know the property – Look at all the previous sales of the home. Who was the builder? When was it built? Have there been any renovations? How old is the neighborhood? What is it like? All of these answers will help you value the home and set expectations for your potential clients. It’ll also make a great impression. You’ll show you’ve done your homework. 

Know the overall market trends – It’s not enough just to research the subject property, you need to know how the market trends are affecting this property. Research the answers to these questions:

• What are the days on the market to sell? Are they going up or down?

• Are there more homes on the market now than, say, 3 months ago?

• Are the pending home sales up or down?

We truly believe that if you put these tips into practice, you’ll confidently crush your next listing appointment. We’ll continue in our next edition, but in the meantime, start here and here to learn more.

To learn more about Estate Media, visit their website.

Just in Case

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

“Your time is limited, so don’t waste it living someone else’s life.” – Steve Jobs

Thanks for reading, and we’ll see you back here on Tuesday!

– James and David