What Has Mortgage Lenders So Upbeat?

What Has Mortgage Lenders So Upbeat?

Mortgage lenders’ optimism reached a high in a first-quarter survey, even as lenders expressed pressing challenges to their profit margins, according to Fannie Mae’s 2017 Mortgage Lender Sentiment Survey.

Lenders say they’re most upbeat about the direction of the economy and home prices. They also continue to report modest easing of credit standards across all loan types, with plans to continue to do so over the next three months.

“This quarter, lenders’ optimism toward the overall economy and home price appreciation hit survey highs, mirroring the consumer confidence seen in our February Home Price Sentiment Index,” says Doug Duncan, Fannie Mae’s chief economist. “However, lenders’ profit margin outlook remains significantly less positive than this time last year and two years ago.”

Lenders cite competition from other lenders and a market shift from refinance to purchase as the top reasons for the weak profit margin outlook, Duncan notes.

“With mortgage rates expected to rise, we expect refinance activity will fall and purchase affordability will tighten, increasing competitive pressure in a shrinking mortgage market,” he says. “Lenders may choose to adjust their production capabilities and staff resources given their profitability outlook.”

Lenders surveyed reported a sharp decline in demand expectations for purchase mortgages, mostly due to rising mortgage rates. The share of lenders who expect an increase in purchase mortgage demand over the next three months for conventional mortgages dropped to the lowest level recorded in any first quarter in the survey’s history, Fannie Mae notes.

Source: Fannie Mae

Why Your Agents Still Need a Website

Why Your Agents Still Need a Website

As a broker-owner or manager, you may be getting the question from agents as to whether having a personal business website is still relevant today, and worth the time, money, and effort. Beyond providing a profile for your agents on your company’s site, it is still wise for independent sales associates to establish their own websites, says Desare Kohn-Laski, broker-owner of Skye Louis Realty in Coconut Creek, Fla., as long as agents keep these three tips in mind.

1. Mobile Buyers.

Whereas a decade ago, consumers predominantly used their desktops and laptops to search for their dream houses, today, more than ever, they are conducting home searches from their mobile device. An agent’s site should be mobile-friendly to help establish his or her personal brand, Kohn-Laski says.

2. Business Growth.

Agents with their own site still have the leg up in setting themselves apart from competition. It’s a place to publish engaging content that speaks to the specific market or niche they are trying to reach. It’s also a place to share market expertise through blog posts and videos as well as a tool to capture leads. “While a broker’s corporate website definitely helps, it is still good to identify yourself [independently],” Kohn-Laski says. “Utilize the power of the internet to build a stronger personal brand, to establish expertise, and to stay relevant with the information and service your client needs.”

3. Client Trust.

Finally, a business website is still worth it for agents to prove credibility to potential clients, says Kohn-Laski. You also want to control the dominant source of information about you in the web. “Work on [your site] and it will reciprocate. You’ll see with the results,” she says.

Source: Skye Louis Realty

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This Is the Worst ‘Housing Drought’ Ever

This Is the Worst ‘Housing Drought’ Ever

The number of homes for sale is at the lowest level on record, according to the National Association of REALTORS®, who began tracking inventory 18 years ago. That means many home buyers likely will find fewer options this spring, and the homes that are being listed tend to sell fast and at a premium.

The lack of new-home supply is one culprit. Housing starts are only at about 75 percent of their historical average. Builders are focusing on pricier segments of move-up buyers, leaving a big void in the demand for lower cost homes that appeal to first-time home buyers. Builders blame the higher costs for land, labor, and materials as forcing them to concentrate on the higher end of the market.

Builders aren’t the only ones to blame, however. Investors purchased about 4 million distressed properties—mostly in the lower-priced starter home segment—during the housing crash. They have been holding onto these properties, continuing to rent them out rather than selling.

“Investors came in to get that cash flow, and the cash flow remains very positive,” says Lawrence Yun, chief economist at the National Association of REALTORS®. “The price appreciation is just extra gravy that they’re witnessing, and they’re saying they’re going to ride out this price increase.”

That strong price appreciation also may be curtailing home supplies. The more a local market has recovered, the larger the drop in inventory it’s experiencing, according to a new survey by Trulia.

“If you have a lot of equity in your home, that could be great to use to buy another one, but if that other home you might buy is that much more expensive than it was last year, you may stay put and you may renovate instead,” says Ralph McLaughlin, Trulia’s chief economist.

As such, the housing crunch likely isn’t going to let up anytime soon. Some areas are seeing it worse than others. For example, home sales in Southern California in February were 14 percent lower than the average, according to CoreLogic in reviewing 30 years of data.

“San Bernardino County, which has the region’s lowest median sale price and entices many first-time buyers and others priced out of coastal markets, was the only Southern California county to post year-over-year increase in sales this February,” notes Andrew LePage, research analyst at CoreLogic.

Source: “This Is What’s Behind the Severe Housing Drought,” CNBC (March 23, 2017)

Investors Are Unlocking Biggest Profits Here

Investors Are Unlocking Biggest Profits Here

The county offering the highest returns from single-family rental properties so far in 2017: Clayton, Ga., in the Atlanta metro area. That’s according to the first-quarter 2017 Single Family Rental Market report, released by ATTOM Data Solutions. Researchers analyzed single-family returns in 375 U.S. counties, each with populations of at least 100,000, and more than 6,000 U.S. ZIP codes with a population of 2,500 or more.

Other counties offering some of the highest annual gross rental yields in the nation on single-family properties are Baltimore City, Md.; Bibb County, Ga., in the Macon metro area; Monroe County, Pa., in the East Stroudsburg metro area; and Saginaw County, Mich., the report showed.

Among counties with populations of at least 1 million, these areas were offering the highest gross rental yields: Wayne County, Mich., in the Detroit metro area; Cuyahoga County, Ohio, in the Cleveland metro area; Allegheny County, Pa., in the Pittsburgh metro area; Philadelphia County, Pa.; and Franklin County, Ohio, in the Columbus metro area.

The average annual gross rental yield among the 375 counties tracked was 9 percent in 2017. To compute it, ATTOM Data Solutions divided the annualized gross rent income by the median purchase price of single-family homes.

“While good returns on single-family rentals are hard to come by in high-priced coastal markets and in some other housing hot spots such as Denver and parts of Dallas, Austin, and Nashville, solid returns on single-family rentals will continue to be available in many parts of the Southeast, Rust Belt, and Midwest for investors purchasing in 2017,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “And single-family rentals should continue to yield strong returns in many parts of the country going forward given the market undercurrents of low rent-ready housing inventory and low homeownership rates.”

Blomquist notes that average fair-market rents rose in 2017 in 86 percent of the markets his team analyzed, even while average wage growth outpaced rent growth in 67 percent of markets—“a recipe for sustainable growth in the rental market.”

Source: RealtyTrac

How to Get Your Content Shared Online

How to Get Your Content Shared Online

Producing shareable content should be key behind any internet marketing strategy. The more you can get others to share your content, the more new prospects you can land in front of, and the potential to rank higher in Google searches.

But what motivates other people to want to share your content?

It may come down to science. Firms Moz and BuzzSumo teamed up to examine a million pieces of content to learn the science behind content shares.

Type of content most shared: They found that videos, quizzes, and list-based articles tended to get more content shares than other types.

Length of content most shared: Eighty-five percent of the content reviewed contained 1,000 words or less. However, the 15 percent of content that had more than 1,000 words got far more shares and links, the study found. Detailed posts may be more effective.

Also, you’ll want to consider the purpose of your post first. In a separate study, researchers at UCLA found three main types of content that tend to be the most shared:

1. Utility: content that is viewed as useful or helpful. The desire for a person to share then becomes wanting to help friends and loved ones to know this useful information too.
2. Entertainment: entertaining pieces of content also motivate others to want to share it. For example, content that makes others laugh or amuse.
3. Inspiration: inspirational content that seeks to motivate is also among the most shared.

The element of surprise can’t be underestimated. When others read an item and see something they didn’t expect or learned something new, they may be triggered to share it to others. Surprises are also linked to better memory, which means the consumer is more likely to remember your brand. Find a way to surprise in your content, such as a surprising punch line at the end of a video or a mention of a new surprising threat that could affect your audience.

Source: “The Psychology of Shareable Content,” Forbes.com (March 22, 2017)

Home Sales Drop Amid Inventory, Affordability Issues

Home Sales Drop Amid Inventory, Affordability Issues

Existing-home sales dropped in February as tight inventory and weakening affordability conditions kept many buyers out of the market in most parts of the country, the National Association of REALTORS® reports. Total sales for existing single-family homes, townhomes, condos, and co-ops fell 3.7 percent to a seasonally adjusted annual rate of 5.48 million, compared to 5.69 million in January, according to the report. However, the pace of sales in February remained 5.4 percent above a year ago.

“REALTORS® are reporting stronger foot traffic from a year ago, but low supply in the affordable price range continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers,” says NAR chief economist Lawrence Yun. “Newly listed properties are being snatched up quickly so far this year and leaving behind minimal choices for buyers trying to reach the market.”

Here are some key indicators of the housing market in February from NAR’s latest report.

Home prices: The median existing-home price for all housing types was $228,400—up 7.7 percent from a year ago ($212,100).

Inventories: Total housing inventory rose 4.2 percent to 1.75 million existing homes available for sale, but that’s still 6.4 percent lower than a year ago (1.87 million). Unsold inventory is at a 3.8-month supply at the current sales pace. Inventories have dropped year over year for 21 consecutive months.

Distressed sales: Foreclosures and short sales accounted for 7 percent of sales for the third consecutive month and are down from 10 percent a year ago. Six percent of sales were foreclosures, and 1 percent were short sales. Foreclosures were discounted an average 18 percent below market value, while short sales were discounted 17 percent.

Days on the market: Forty-two percent of homes sold in February were on the market for less than a month. On average, properties stayed on the market for 45 days, down considerably from a 59-day average a year ago. Short sales were on the market the longest, at a median of 214 days in February; foreclosures sold in 49 days on average; and non-distressed homes took an average of 45 days.

All-cash sales: All-cash transactions accounted for 27 percent of sales. That’s an increase from 25 percent a year ago and is the highest level since November 2015. Individual investors, who account for the bulk of cash sales, purchased 17 percent of homes, down from 18 percent a year ago.

“The affordability constraints holding back renters from buying is a signal to many investors that rental demand will remain solid for the foreseeable future,” Yun says. “Investors are still making up an above-average share of the market right now, despite steadily rising home prices and few distressed properties on the market, and their financial wherewithal to pay in cash gives them a leg up on the competition against first-time buyers.”

Source: National Association of REALTORS®