1970s

Apache is functioning normally

Embarking on the journey of purchasing a home in the Badger State is an adventure filled with anticipation and, often, a measure of uncertainty. Central to this process is the pivotal step of a Wisconsin home inspection—an essential safeguard that delves beneath the property’s surface, ensuring that your future haven is as sound in structure as it is inviting in appearance. This Redfin article will explore the ins and outs of Wisconsin home inspections, covering everything from their importance to specialized inspections, requirements, and costs. So whether you’re buying a home in Madison or a home in Green Bay, keep reading to learn everything you need to know about getting a home inspection in Wisconsin.

Why should you get a home inspection in Wisconsin?

Buying a home is a big investment, and getting a home inspection is a crucial step in protecting that investment. A professional home inspector will thoroughly assess the property, identifying any hidden issues, structural concerns, electrical and plumbing problems, and other potential red flags that may be missed during a casual walkthrough. This complete examination provides you with valuable insights, negotiation leverage, and peace of mind, ensuring you make an informed and confident decision about your new home.

“In Wisconsin, a home inspection is a smart step for buyers and sellers alike,” says Patrik Neuwirth of Inspect Karma, a Milwaukee-based home inspector. “It serves as a critical safeguard, uncovering potential issues from seasonal wear due to the state’s harsh winters and humid summers, to more hidden and costly problems. An inspection provides transparency and confidence, ensuring that one of life’s biggest investments is sound and secure.”

Are there any specialized inspections that Wisconsin buyers should consider?

While a standard home inspection covers the fundamentals, Wisconsin buyers should be aware of specialized inspections tailored to specific concerns. These include radon testing, especially in areas with elevated radon levels, mold inspections for properties prone to mold growth, lead paint assessments in older homes, and well and septic inspections in rural areas with these systems. These specialized inspections are key for ensuring your home is safe and free from potential hazards.

1st Choice Inspection in Milwaukee emphasizes the importance of sewer drain scoping, especially for houses built before the 1970s because tree roots can cause issues.

Are home inspections required in Wisconsin?

In Wisconsin, home inspections are not mandatory, but they come highly recommended for all homebuyers. While not required by law, certain lenders may impose inspection requirements as part of the mortgage approval process, such as pest inspections or appraisals. It’s important to note that despite the lack of mandatory inspections, opting for a home inspection is a wise and cost-effective choice.

Donn Anderson of Anderson Home Inspections advises that although inspections aren’t required in the state, they are more than worth the cost. It’s not uncommon for homebuyers to incur thousands of dollars in surprise expenses because they decided against getting a home inspection.

How much does a home inspection cost in Wisconsin?

The cost of a home inspection in Wisconsin can vary based on several factors, including the property’s size, age, location, and the scope of the inspection. On average, you can expect to pay between $300 and $500, with specialized inspections incurring additional expenses. While it may seem like just another added cost, the investment is well worth the peace of mind and potential long-term savings it provides.

Can you sell a house in Wisconsin without an inspection?

Wisconsin does not require sellers to conduct a pre-listing inspection, but many opt for this proactive approach. A pre-listing inspection can help find and address issues upfront, making the selling process smoother and more attractive to potential buyers. While not mandatory, it’s a strategic move for sellers looking to increase their home’s market appeal.

Wisconsin home inspection: the bottom line

In the world of real estate, knowledge is power. A home inspection in Wisconsin is your key to making an informed decision when purchasing a property. It provides you with insights into the home’s condition, negotiation power, and peace of mind, ensuring that you are investing in a safe and sound property. Regardless of where in the state you’re looking to move, a home inspection is a wise investment in your future.

Source: redfin.com

Apache is functioning normally

The jobs report today which should move mortgage rates lower, demonstrates why it’s time for the Federal Reserve to land the plane. The labor market doesn’t show wages spiraling out of control as it did in the 1970s because the inflation data doesn’t look like anything in the 1970s.

We had a solid job openings print this week and jobless claims are still near historic lows. Today’s labor data isn’t the cleanest report with labor strikes in different sectors and we did get significant negative revisions. But, job growth is returning to its average pace. Remember, if we didn’t have COVID-19 and job growth stayed on trend with population growth from February of 2020, we easily should have between 157 million – 159 million total people employed, and today we are at 156,930,000.

From BLS: Total nonfarm payroll employment increased by 150,000 in October, and the unemployment rate changed little at 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, government, and social assistance. Employment declined in manufacturing due to strike activity.

Here’s a breakdown of the jobs gained and lost in today’s report:

In this job report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 5.8%
  • High school graduate and no college: 4.0%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.1%

Wage growth has been slowing down since January of 2022, which is a big slap in the face to everyone saying that wage growth can’t slow down unless people lose their jobs. Today’s 4.1% year-over-year growth data is lower than the 6% plus wage growth data we saw in January of 2022. 

The other labor data lines were fine this week: nothing is breaking, but put them all together, and the labor market is returning to normal. Job openings data is roughly at 9.6 million, but the quits percentage is back to pre-COVID-19 levels. That’s essential because the Fed doesn’t want people to quit their job for higher wages. Jobless claims rose more than anticipated, but this is historically low.

The 10-year yield has had a crazy week, heading lower before the jobs report as we can see below.

As I write this article, the 10-year yield is at 4.53%, and mortgage rates are heading lower! Softer labor data will send rates lower. Looking at the history of economic cycles, usually when the Fed is done hiking rates, bond yields head lower with mortgage rates. The Fed made a big mistake by being too hawkish in its October meeting, which sent bond yields (and mortgage rates) much higher and made policy more restrictive

Overall, the labor market is getting back to normal. This is why, for a long time, I have targeted that 157 million to 159 million level as the baseline level for job growth, reflecting the slower growth rate of our population. We had a global pandemic, which did not throw us back to the 1970s, and in time, we are returning to normal.

We don’t need to create a job-loss recession for some code of honor that doesn’t exist among Federal Reserve members, we just need to endure.

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

“Schlotzsky’s Sandwich Studio Line” celebrates the legacy of the one iconic sandwich: The Original

KSNF/KODE — Thanks to a popular sandwich shop, you can take your home’s décor back to the ’70s — if you don’t mind that décor having a sandwich-centered theme.

Schlotzsky’s, the pioneer of “The Original” sandwich that has been popular with guests since 1971, is now venturing into the world of home décor with the launch of the Sandwich Studio Line.

Drawing inspiration from the iconic Original Sandwich and its staple ingredients — this collection embraces the 1970s — offering a blast from the past for sandwich lovers and interior design enthusiasts alike.

The Original was the very first menu item by Schlotzsky’s. It features ham, Genoa and Cotto salami, tomato, lettuce, onion, three cheeses, olives, mustard, and signature sauce on a sourdough baked bun. Now, The Original will transcend beyond the restaurant and into homes across America.

| Top Social Media Sites Receive Staggering Amounts Of Traffic >

These sandwich-themed décor pieces are priced anywhere from $8 to $800. They’re available for purchase, HERE. The full collection includes:

  • Saucy Lamp (SOLD OUT as of this article’s writing.)

Source: fourstateshomepage.com

Apache is functioning normally

Apache is functioning normally

The high cost of housing is driving Southern California’s biggest challenges. Income is not keeping pace with housing costs. It hasn’t for at least two generations, and the problem of unaffordable shelter shows few signs of letting up.

There’s a metric called “housing burden” that lays the situation bare. Over the last 50 years, it tracks the growing, gaping mismatch between income and shelter costs in Los Angeles County.

In 1979, UCLA land experts Leo Grebler and Frank Mittelbach wrote: “As a general, time-honored rule of thumb” house prices in a community “should not exceed 2 to 2½ times the annual income” of its residents.

Within a decade, home prices began to drastically violate this rule. If it were applied today, it would mean a four-person household with the median Los Angeles County income of $98,200 could afford to buy a house that cost $245,500. However, the median home price in the county last month, according to Redfin, was $980,000.

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How did things get so unbalanced?

In the 1950s and 1960s, buying a single-family home in Los Angeles was an attainable prospect. The GI Bill and the Federal Housing Authority helped with loans and mortgage dollars (albeit primarily for white families). And home building was on a tear, thanks to the region’s pro-development political climate.

By the 1970s, however, a cascade of factors — local to global — changed the equation.

Housing prices first shot ahead of income in the mid-1970s. Analysts attributed the spike to the first cohort of baby boomers reaching home-buying age, which expanded the pool of buyers and created a seller’s market. The 1973 oil crisis and ensuing inflation pushed buyers to pay up for fear prices would rise even higher. Unrelenting demand thus not only kept pace with prices, it increased them.

Social-demographic factors also factored in. Per capita income doubled from 1966 to 1977, due in part to more women in the workplace. When federal policies struck down gender discrimination in loan and credit decisions, two-income families could qualify for larger mortgage loans, elevating the demand for higher-priced homes.

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Then land and building costs climbed, pushing prices even higher. And in 1978, Proposition 13 became law.

The ballot measure slashed property taxes and with them, funding for municipal services. Cities and towns scrambled to recoup the lost revenue. New real estate developments were “money-losers,” as urban planner and former Ventura Mayor William Fulton observed, because property taxes fell so low. Instead, municipalities turned to retail development to generate lucrative sales tax revenue. Prop. 13 thus became a powerful disincentive to build housing.

The rising slow-growth movement put another damper on housing supply. It was pushed by homeowners who resisted adding multifamily housing in single-family neighborhoods or new development in nearby open space.

One study by the California Legislative Analyst’s Office found that by the early 2000s, more than two-thirds of cities and counties in coastal California metro areas had slow-growth policies in place, and that when a community added such a policy, it resulted in a 3% to 5% increase in home prices. Moreover, the historical momentum of R-1 (single family) zoning stymied the construction of multifamily units.

The upshot of all these pressures? From 1980 to 2010 in Los Angeles, the population grew by 31.3% while housing units grew by only 20.6%.

L.A.’s spiraling housing costs paralleled trends in large, global metro regions by the turn of the 21st century, suggesting that forces beyond L.A. were also at work. In the 1990s and early 2000s, the housing bubble was driven by finance structures linked to global markets, inflows of global capital and unregulated banking practices that set off unrestrained and predatory lending and buying frenzies. Even after the 2007-09 banking crisis and Great Recession, home prices in L.A. soon regained traction.

Taking a longer view, economist Robert Shiller traced rising housing costs in the late 1980s and early 2000s across metro areas globally, including L.A. He pinned a good deal of the blame on “irrational exuberance” that motivated uncontrolled buying. The psychological draw of metro areas such as Paris, London, Sydney and L.A. reinforced the belief that land prices would continue to go up and up. Media fed these perceptions. And housing bubbles blew up.

Looking at the housing burden graph, the price surge since 2020 is truly eye-popping. Urban analyst Richard Florida attributes it to pandemic-driven demands for more housing space especially among millennials, a massive shortage of housing overall and, perhaps most disturbingly, the growing competition from large institutional investors who’ve been snapping up homes and apartments in recent years. In 2021, they bought 29% of all single-family homes in California and, with their ability to outbid other buyers, they drive up prices.

Over the last 50 years, L.A.’s housing burden has evolved from challenging to simply unsustainable. The consequences are all around us, in skyrocketing rents, a ubiquitous homelessness crisis, housing overcrowding, rising commuting times to drive-till-you-qualify exurbs, population flows out of California and intensified wealth inequality.

Solutions must come from both the housing and the income side.

Increasing the housing supply is crucial. It must be accompanied by policies that protect individual buyers from corporate competitors, ensure the ongoing production of affordable housing, and guard against gentrification.

Even more importantly, wages and salaries must climb considerably to make housing affordable again. The major employers in our region — from the movie studios to hotels to hospitals and logistics firms — must take a long, hard look at the housing burden graph and see in it their own role in widening the gap. The Writers Guild and actors’ strikes, the Unite Here Local 11 hospitality industry strike and the strike vote last week by Kaiser Permanente healthcare workers speak directly to L.A.’s housing burden.

The struggle to match income to cost of shelter is an inescapable fact of L.A. life that demands swift, conscientious redress.

Becky Nicolaides is a research affiliate at the Huntington-USC Institute on California and the West, and author of “The New Suburbia: How Diversity Remade Suburban Life in Los Angeles After 1945,” forthcoming from Oxford University Press. The data set collected for the book, a granular look at demographics from 1950 to 2010, will be published online by the USC libraries next year.

Source: latimes.com

Apache is functioning normally

By David Piscatelli

Fed’s inflation fight tightens the U.S. housing supply and makes home buying even more difficult

Conventional wisdom dictates that U.S. inflation will continue to decline as the Federal Reserve keeps interest rates high. This action, which makes loans more expensive for businesses and consumers, should lead to less spending, less consumption and higher unemployment.

Or at least that’s Econ 101. Yet both consumers and investors have acclimated to the current market environment. Moreover the key driver of inflation — housing — cannot be adequately contained through the Federal Reserve’s usual tactics.

In fact, the Fed’s policies have created a Catch-22 in the housing market by creating “golden handcuffs.” Instead of easing consumer demand, the Fed’s actions unintentionally restricted U.S. housing supply, resulting in a stalemate between home buyers and sellers. Homeowners who locked into historically low mortgage rates before and during the pandemic are now reluctant to sell, which in turn is increasing the likelihood of persistent higher inflation.

The case for this condition to persist , which the market is mostly failing to consider, continues to grow stronger as the odds of a recession fade. This should be an alarm bell and a potential opportunity for investors to redeploy at least part of their capital into hard assets to serve as a hedge against inflation risk.

The recession that never was

Many economists have predicted that a recession would hit the U.S. Their reasoning was sound: aggressive monetary action by the Federal Reserve, investor dissatisfaction with inflation, loss of consumer confidence and reductions in home asking prices — all points that were hard to argue against.

Yet most of the key ingredients needed for a recession have not materialized. Investors have acclimated to inflation, consumer confidence is growing and the housing market has, by and large, entered a period of stalemate where prices remain high due to lack of supply.

In fact, the only relevant argument in the recession camp that remains is the Fed continuing its aggressive posture against inflation — now considered the fastest monetary policy tightening cycle in more than 40 years. Such action continues to lead many to speculate that recession is imminent, and the only questions left to answer are “when,” and “how deep it will be?”

Housing prices obey the laws of supply and demand

Housing is perhaps the most consequential category that makes up the Consumer Price Index (CPI), which markets track every month as a core measure of inflation.

The undersupply of housing in the U.S. is grounded in years of underbuilding and is not the result of a single federal policy, war, or external event. If anything, the power to create more housing supply rests with state and local governments, which often require working through a patchwork quilt of differing zoning and land-use regulations.

The high estimate of the country’s current housing shortage is pegged at about 7.3 million units, while the most conservative estimate shows it to be about 1.7 million. While the true shortage is most likely somewhere inbetween, the bottom line is that the United States faces a textbook housing shortage that cannot be solved overnight. Worse, the Fed’s current policies are making the prospect of home ownership even more difficult.

Nobody wants to move and reset their loans at much higher rates.

Central bank measures designed to clamp down on inflation by making borrowing more expensive (which theoretically should drive down the costs of homes), are having the opposite effect. This is because homeowners, who locked in historically low mortgage rates before and during the pandemic, are now reluctant to sell their home.

Simply put, nobody wants to move and reset their loans at much higher rates. Would-be sellers are therefore sitting on the sidelines, which has unintentionally created an even greater shortage in supply. Meanwhile, potential buyers, who cannot afford higher mortgage rates, are incentivized to rent instead.

To end this stalemate, the Fed would need to start cutting interest rates, which it has stated is unlikely this year. But if inflation is being driven by the cost of housing, as demonstrated in the Consumer Price Index, more attempts to tame inflation via rate hikes suggests homeowners will only become more entrenched as supply dwindles further As the labor market continues to prove surprisingly resilient, homeowners, and by extension everyday consumers, don’t seem to mind waiting it out.

Read: Nouriel Roubini says a return to 2% inflation is ‘mission impossible’

Also: Most long-term investors can ignore the Federal Reserve’s latest move

The case for hard assets

Seasoned investors know that during times of rising interest rates, restrictive credit and prolonged inflation, more investments flow into “hard” asset classes such as real estate. This hedging strategy is used almost like an insurance policy by investors to preserve capital from the depreciating effects of inflation. And according to research, it works. For example, a Stanford University study found that residential real estate is historically an investment haven during inflationary periods. Even during the inflation of the 1970s, home prices increased relative to the size of the economy. This is because housing is typically tied to consumer prices and rises with inflation.

With housing assets so closely tied to inflation, as well as to the laws of supply and demand, investments in this hard asset class deserve due consideration. Strong economic growth, coupled with the one-two punch of resilient consumer spending and near record-low unemployment, is good news. It also means the Fed won’t be lowering rates soon. Housing will remain a key driver of inflation, and future rate-hikes will further entrench homeowners and push more would-be buyers into renting.

To achieve a return to 2% inflation, U.S. policymakers would be wise to work with state and local governments to incentivize development, which would drive down the greatest expense for most Americans. But even with decisive action, fixing the fundamental housing shortage that is responsible for sustaining stubbornly persistent inflation will be a longer process than most investors realize.

David Piscatelli focuses on research, economic analysis and strategy at Avenue One, a property technology service platform and marketplace for institutional owners, buyers and sellers of residential homes. Views of the writer do not necessarily reflect the views of Avenue One.

More: Meet the brave Americans buying and selling their homes, despite stubbornly high interest rates

Plus: 9 ways home buyers can stretch their dollars even though mortgage rates are high

-David Piscatelli

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-23-23 0837ET

Copyright (c) 2023 Dow Jones & Company, Inc.

Source: morningstar.com

Apache is functioning normally

Apache is functioning normally

Published on September 24, 2023


Courtesy of Astraeus Clarke

While full-on Crayola-like green conjures less than complimentary connotations—green with envy; green around the gills; the grass is always greener—take the hue down a notch by mixing in some gray or black and the color yields a whole different experience. Deep-green hues evoke nature in a more meditative manner. Such elements feel nearly spiritual; think of jade, pines, and seaweed. Green is the color of the outdoors and it nurtures the soul. So, pull deep green-decor into your home.

One might balk at the thought of a green dresser, but Acerbis’s Storet subtly teases color out of a rich walnut. Think of it as a functional fern in the corner of your bedroom. Astreus Clarke’s Roebling lamp is a minimalist and earthy green marble alternative to a banker’s lamp with a lollipop-green glass shade. And, it looks as home in a library as on a nightstand. Sara Hayat’s Bevel sofa is a statement piece around which one builds a room; luscious green velvet upholstery is much more inviting than gray. Dive into deep green; we consider a timeless neutral.

  • Sara Hayat scoured industry sources near and far to find a fill that would give the Bevel a bit of bounce while ensuring its cushions would retain their pebble-like shape. Indeed, each velvet-upholstered seat cradles a person perfectly. As it should: It takes the team about a month to hand-stitch this low-slung belted beauty. $28,495

  • Minotti who passed away in August, played with the idea of balance in the Solid Steel coffee table, despite the heavy-metal inference of its moniker. Party-ready glossy and mirrored finishes belie the architectural geometry of the streamlined, staggered slabs. Even with its fashion-forward feel (or backward: the materials reference 1970s glamour), it evokes an unflinchingly Bauhaus sensibility. Price upon request

  • Astraeus Clarke found inspiration in N.Y.C. The Roebling table lamp takes its form, albeit loosely, from the Brooklyn Bridge and its name from the bridge’s engineers, John A. Roebling and his wife, Emma. The lamp’s deep-green marble pillars support a gable-shaped top that hides the light source. But there’s a twist: That top segment pivots 360 degrees, allowing the user to direct illumination as needed. $12,500

  • New Ravenna. Duo, a waterjet mosaic, features boxy, mustard-toned cross-stitches that punctuate a large, dark grid over elegant marble with green veining. The coastal Virginia–based company replicates the texture of stone that has been well-worn by salt air, ensuring your kitchen, bath, or patio looks suitably lived-in. $229 per square foot

    • Source: robbreport.com

    Apache is functioning normally

    The “Brady Bunch” house, renovated by HGTV, has sold for more than $2 million below its original asking price.

    After spending the summer on the market, the Studio City property just closed escrow. Historic home enthusiast Tina Trahan, whose husband, Chris Albrecht, was once chief executive of HBO, scooped up the sitcom gem for $3.2 million.

    In May, after purchasing the home for $3.5 million in 2018 and overhauling it in the series “A Very Brady Renovation,” HGTV listed the groovy digs for $5.5 million.

    As to why HGTV accepted an offer more than $2 million below asking (and $300,000 shy of what it paid in 2018), Compass’ Danny Brown, the listing agent on the property, told The Times in an email, “This is a one of kind property which was impossible to comp. This is not a home anyone would ever live in.” Savvy investors, he said, understand that laws governing short-term rentals are “nuanced and restrictive,” limiting the value of the property for that use.

    “We felt the property was worth about $3M – $3.5M and that’s exactly where it landed because there are no intellectual property rights that are included in the sale,” Brown said.

    Built in 1959 with Late Modernist architecture, the house was used only for exterior shots during the sitcom’s five-season run from 1969 to 1974, followed by decades of syndication that cemented the mixed family of eight in the annals of American pop culture.

    When HGTV bought the home, its interior bore no resemblance to the place where audiences watched the Brady children grow up. Scenes shot inside the Brady residence were filmed on sets built on Soundstage 5 at Paramount Studios in Hollywood.

    In 2018, HGTV looked to meld the two realities and bought the house at 11222 Dilling St. for nearly double the original asking price. The channel outbid Hollywood celebrities, including former ‘N Sync member Lance Bass.

    The network spent an additional $1.9 million to re-create the TV home where America came to know Mike, Carol, Greg, Marcia, Peter, Jan, Bobby and Cindy Brady. HGTV even added a second story to accommodate all the rooms that were seen in the show.

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    HGTV documented the process on “A Very Brady Renovation,” which featured the six actors who played the Brady children. The cast, alongside HGTV hosts Drew and Jonathan Scott, worked to gut the house while the crew painstakingly reproduced the set’s rooms and 1970s decor — down to the cabinet hardware. The online listing for the house invited buyers to “own a piece of pop culture history” and showed images of its detailed and polished 5,140-square-foot interior, which has five bedrooms and five bathrooms.

    HGTV said the home came equipped with “many of its contents, including customized pieces such as the green floral living room couch and the credenza with a 3-D printed horse sculpture.”

    “HGTV spent about $5.5M+ purchasing and gutting the house which is why we listed it at $5.5M even though we knew it was an aspirational list price,” Brown said via email. “By the way, HGTV did fine making revenue on ‘The Very Brady Renovation’ show and several other ancillary revenue streams. As for my brother from another, Lance Bass, perhaps third time’s the charm?”

    Times staff writer Jonah Valdez contributed to this report.

    Source: latimes.com

    Apache is functioning normally


    Washington, DC
    CNN
     — 

    US mortgage rates surged this week, rising to their highest level in 21 years.

    The 30-year fixed-rate mortgage averaged 7.09% in the week ending August 17, up from 6.96% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 5.13%.

    Rates have been above 6.5% since the end of May and climbing higher since mid-July. The last time rates were over 7% was in November of last year when they hit 7.08%. This week’s average rate is the highest the 30-year, fixed-rate mortgage has been since April 2002 when it was 7.13%.

    Mortgage rates have spiked during the Federal Reserve’s historic rate-hiking campaign sending home affordability to its lowest level in several decades. Buying a home is more expensive because of the added cost of financing the mortgage, and homeowners who previously locked in lower rates are reluctant to sell. The combination of low inventory and high costs has squeezed would-be homebuyers, sending home sales about 20% lower than a year ago.

    “The economy continues to do better than expected and the 10-year Treasury yield has moved up, causing mortgage rates to climb,” said Sam Khater, Freddie Mac’s chief economist. “Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales.”

    The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

    Inflation concerns remain

    The rising average rate for a 30-year, fixed rate loan is mirroring the trend of 10-year treasury yields, which recently hit their highest level since the summer of 2007.

    Treasuries moved higher as investors reacted to the release of the Federal Reserve’s meeting minutes on Wednesday, which said members are worried that inflation will linger longer than expected at an elevated level, said George Ratiu, Chief Economist at Keeping Current Matters, a real estate market insights and content company.

    “Coming out of a three-year pandemic, the economy continues to expand, boosted by solid consumer spending and business investment,” said Ratiu. “For most Americans, the economic growth means job security and better pay checks.”

    The downside however, he said, to the strong wage gains is that the Fed remains hawkish on the outlook for taming inflation this year.

    “With the view of the late 1970s’ twin inflation peaks firmly in its monetary lens, the central bank remains determined to bring price growth to the 2.0% target,” he said. “Measures of core inflation are still north of 4.0%, which means that additional rate hikes are on the Fed’s monetary agenda.”

    While the Fed does not set the interest rates that borrowers pay on mortgages directly, its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

    “Despite still high prices and elevated interest rates, July’s retail sales data showed consumer spending continues to increase solidly as demand is being boosted by high wage growth,” said Jiayi Xu, an economist at Realtor.com.

    While this strong economic data might cool worries about an imminent recession, it could give rise to concerns that interest rates might stay elevated for an extended period, she said.

    Meanwhile, it is worth noting that the Fed is moving cautiously to ensure that the effects of earlier rate hikes are fully revealed.

    “As a result, the Fed may opt to take another ‘wait-and-see’ strategy in its upcoming meeting, which may help potentially mitigate the recent upward trajectory of mortgage rates,” Xu said.

    Rates and home prices expected to stay elevated

    With inflation still a concern for the Fed, home buyers can expect borrowing costs to stay elevated, said Ratiu.

    The bottom line for home buyers is that it will continue to be difficult to find affordable homes as rising mortgage rates are tacked onto already elevated home prices.

    This year home buyers have seen rates rise a whole percentage point from the lowest point of 2023, 6.09% in February, to this week’s 7.09%. Compared to a year ago, rates are nearly 2 percentage points higher.

    Today’s mortgage rate is 196 basis points higher than a year ago when rates were 5.13%, which means that for the buyer of a median-priced home, the monthly mortgage payment is 17% higher, according to Ratiu.

    More than 90% of homeowners with mortgages currently have a rate of 6% or lower, according to a recent Redfin study, meaning they are staying in their current home, not selling and trading up, which would come with higher borrowing costs. This is making the number of already built homes available to buy extraordinarily low — keeping prices elevated for those looking to buy.

    A homeowner who bought a median-priced home with a 20% down payment in January 2022 with a 3.1% mortgage rate is paying about $1,300 a month. That same home at today’s rate would mean a $2,300 monthly mortgage payment, excluding taxes and insurance, Ratiu said.

    For current homeowners who decide to sell, high home prices can help ease the blow of higher mortgage rates. “It is not surprising that with equity near all-time high, over one-in-four buyers is paying all cash for their next home,” Ratiu said.

    But unlike existing home owners who can leverage home equity – which is near all time high – to reduce the size of mortgage loans, first-time home buyers are facing much more challenging market conditions.

    Plus, with asking rents dipping for two consecutive months, according to Realtor.com, potential first-time home buyers may not feel the same urgency to expedite their home purchase as they did when rents were escalating at a double-digit pace.

    “This may result in slower sales churn, but it also provides potential home shoppers with an extended timeframe to carefully consider crucial decisions during the home buying journey,” said Xu.

    Source: cnn.com

    Apache is functioning normally

    Jobs week cleared up the skies for the Federal Reserve members, who are smiling — big time — after a series of data lines gave them what they wanted: a softer labor market! 

    While the labor market isn’t breaking, it has become more pliant in the data lines the Fed focuses on. After Friday’s jobs report, which had some one-time variables, we can say that the economy is heading into an area where the Fed will feel much more comfortable, and we should not have any more rate hikes.

    We need to focus on this week’s data to better understand the labor market. First, let’s take a look at Friday’s jobs report.

    From BLS: Total nonfarm payroll employment increased by 187,000 in August, and the unemployment rate rose to 3.8 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care, leisure and hospitality, social assistance, and construction. Employment in transportation and warehousing declined.

    The headline number beat estimates but had negative revisions in the previous months; we had a big jump in the labor force, which was the biggest reason the unemployment rate ticked up higher. We also had some one-time variables as one trucking company filing for bankruptcy, and the actors’ strike, which hit the data this month. Here is the breakdown of the jobs gained and lost:

    In this job report, the unemployment rate for education levels:

    • Less than a high school diploma: 5.4% from 5.2% 
    • High school graduate and no college: 3.8% from 3.4% 
    • Some college or associate degree: 3.0% 
    • Bachelor’s degree or higher: 2.2% from 2.0%. 

    The key to the unemployment rate jumping was a big move in the labor force, especially from ages 55 plus in this report.

    The Federal Reserve’s fear of wages spiraling out of control like we saw in the 1970s wasn’t a valid concern. As the growth rate of inflation fades, so should their fear on this topic. Wage growth has been slowing down since January of 2022. It might still be too hot for the Federal Reserve, but anyone who isn’t blind can see it’s not spiraling out of control. As the chart below shows, average hourly wage growth data is slowing down from a hot level.

    Job openings

    The job openings data is one of the Fed’s favorite labor market indicators: They use it to talk about how tight the labor market is. I believe the Fed members want to see the job openings data return toward 7 million so they have to be very pleased with the job openings falling below 9 million this week. As we can see in the chart below, the labor market isn’t as tight as it used to be.

    Quits rate

    Another great data line for the Fed this week is that the quits rate has returned to pre-COVID-19 levels. With fewer people quitting for better-paying jobs, this makes the Fed much happier, especially in the lower-wage service sector, because people making more money on the low end isn’t something the Fed will tolerate. As Fed members have said recently, they want to see labor softness in the service sector.

    This was an epic jobs week because the Fed can say that they’re really making progress on attacking the labor market. Once you get a trend in labor data, it’s tough to reverse course quickly, especially as the Fed is in restrictive territory with their rates. Let’s not forget that the student loan debt payments are about to go online, which means less disposable income in the economy. The 10-year yield is slightly below my peak forecast for 2023 of 4.25%, sitting currently at 4.18%.


    The things to focus on for the next 12 months are: the Fed is in restrictive territory with rates, student loan debt payments are about to start again and the labor market is getting less tight. When I say Fed members are happy about this week, it’s an understatement. They are very excited that the economy has a lot of variables that will attack the labor market.

    Source: housingwire.com

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    Credit Report, Buyer Research, Broker Processing Products; Guild and First Centennial Deal

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    Credit Report, Buyer Research, Broker Processing Products; Guild and First Centennial Deal

    By:
    Rob Chrisman

    Mon, Aug 28 2023, 10:31 AM

    As the rumor spreads that millions of women are lined up to be weighed at the Fulton County Jail, we head into late summer and early autumn, rarely a time for increased home sale activity. The National Association of REALTORS®’ total membership in July 2023 is 1.56 million. There are about 547k active listings. That’s one listing per three NAR members, which doesn’t even include non-NAR real estate agents. Analysts continue to point to the nationwide housing market struggling with low inventory levels and decreased affordability. While active inventory through the first six months of 2023 was higher than the record lows set in 2022, new listings have been lagging below 2022 levels. Just simply not enough homes? But Hawai’i’s Marcelle Loren writes, “I don’t agree with the reports of a lack of inventory. There’s just a lack of agents digging up properties to sell. For example, the death of Baby Boomers is a source of inventory: Rising costs are prompting more adult children to sell the homes they inherit from their parents. (Today’s podcast can be found here and this week’s is sponsored by Black Knight. Black Knight is an award-winning software, data and analytics company that drives innovation in the mortgage and real-estate industries, and the capital and secondary markets. Listen to an interview with the company’s Conrad Ficca and Richard Lombardi on climate risk and how lenders can mitigate its impact through data.)

    Lender and Broker Software and Services

    “How will this solution improve the homebuyer or homeowner experience?” This simple question guides the way we develop and deliver products at Black Knight, a mindset we call “Think Customer.” By combining this mentality with a Scaled Agile Framework (SAFe), Black Knight aligns product development and delivery with end-consumer needs while staying ahead of the latest market and technology advancements. Learn more about the value this approach has brought Black Knight clients and their customers in the blog post “’Think Customer’ in an Agile World”.

    In this market, hustle is everything. You can’t afford to waste a single deal, or a single minute. That’s why ReadyPrice has launched Shop.Lock.Deliver.® It’s an innovative new platform designed to help independent mortgage brokers like you save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, and all on a single platform, at no cost to brokers. It’s the industry’s most powerful universal delivery portal, and it’s already helping brokers around the country thrive and compete in even the toughest market environments. Multiple lenders. One platform. Zero b.s. Check out ReadyPrice today.

    Free report: These growing borrower segments present opportunities for new business in 2023’s market. Wondering how to fill your pipeline when loan volume is scarce? New data from Maxwell gives lenders an exclusive look into home buyer groups taking on higher rates head-on. Did you know, for instance, that the share of 18 to 24-year-old borrowers has increased by 18 percent year-over-year? Now is the time to cater to these rising home buyers. For exclusive data and actionable takeaways, click here to download Maxwell’s Q2 Mortgage Lending Report.

    Credit Products for Brokers and Lenders

    In today’s competitive landscape, every dollar and interaction matter more than ever. Blend’s first-of-its-kind soft credit pull delivers a simpler pre-qualification process, reducing top-of-funnel friction, cutting approximately $50 per credit file, and safeguarding borrowers from tri-merge solicitation and negative impacts on their credit scores. For lenders, Blend’s soft credit pre-qualification streamlines the application process, reducing drop-offs and increasing conversion rates. It provides lenders with valuable insights without an expensive hard credit inquiry, improving risk assessment and decision-making. Blend seamlessly integrates soft credit checks into the mobile loan officer experience and self-serve processes, with widespread adoption, ultimately leading to substantial cost savings for our customers. For borrowers, soft inquiries remove barriers to accessing early eligibility information, protect borrower credit scores, and promote financial empowerment, encouraging more borrowers to engage with lenders. Soft credit pre-qualification is a game-changer in the lending industry and a true win-win for borrowers and lenders.

    Fraudulent employment data in mortgage loan applications cause risks for lenders and borrowers. For many years, it has been common practice for mortgage lenders or brokers to ask for paper pay stubs to help verify loan applicant’s income. But in 2022, out of all mortgage loans that had a fraud investigative finding, 43 percent were classified as income fraud. Technological advances allow lenders to instantly and securely obtain reliable income and employment verifications from a trusted third-party provider. Available for use by credentialed verifiers with a permissible purpose under the FCRA, The Work Number® database is the leading commercial repository of employer-contributed payroll data. Unlock the power of our expansive database, instant access to 161 million current employment records directly from 2.8 million employers and payroll providers. With buybacks on the rise, why use paper-based processes that potentially increase repurchase risk at a time when proven GSE-approved options exist?

    The Big Getting Bigger

    Guild Mortgage further expanded its market share with the announcement this morning of the company’s acquisition of First Centennial Mortgage, a privately held residential lender headquartered in Illinois. Founded by brothers Steven and David McCormick in 1995, First Centennial will bring 15 branches and nine satellite offices to Guild’s growing national retail network. This acquisition is Guild’s third this year, following its purchase of Cherry Creek in April and Legacy Mortgage in February. (Guild was represented by the STRATMOR Group’s M&A team.)

    Lenders tired of the rate volatility, the cost cutting, rates possibly trending higher with the Fed fighting inflation (until the Silicon Valley bank failure drove them down) may be looking at selling their company or merging it. “Valuing a Lender” was recently posted on the STRATMOR website.

    Sure enough, STRATMOR’s M&A practice is on fire as big lenders have become small lenders, or brokers, and culturally paired lenders are wondering, “Why have two accounting teams? Two capital markets groups? Two underwriting staffs?” And so on. (Anyone interested in learning more should talk to David Hrobon or Garth Graham.) Of course, as has been mentioned in this commentary, larger lenders are also adept at simply hiring production staff away from smaller, thinly capitalized lenders.

    Many owners of lenders around the nation are earnestly interested in making a decision about what to do with their company before a decision is made for them. I have received this question from a number of owners of small lenders. ‘Rob, is it only the lenders who have servicing who have any value? Or can small lenders with decent market share like mine have interest from buyers?”

    Garth Graham replied. “Great question, Rob, and one we field nearly every day. We are hearing from lenders who are inquiring about the M&A space, and often trying to find out what is going on and what they should do.

    “The answer is that there continues to be good deals for potential sellers, and the reason is that there are a lot of buyers we work with who continue to want to grow market share in a down market. We closed three deals in the last 60 days, and all had upfront premiums with solid earn outs, with a good cultural fit for the parties. Often the premium being paid is driven by the ability for the seller to add the production without having to add all the corporate expense, so it can be painful decisions about the corporate depts (secondary, HR, Risk, technology etc.), but the end result is that the production is worth more to the buyer than it is to the seller due to the cost savings. And that shows up on premium offers. And the seller gets the balance sheet plus a share of that financial benefit. So, it can be a potential win-win. Of course, it has to be a deal that makes sense for the LOs, and production staff too, so that is why culture matters so much.” Thank you, Garth.

    To wrap up, in valuing a company, a potential buyer will look at the audited net worth and the discounted cash flows, usually for the next three years of estimated earnings. (The devil’s in the details and assumptions!) The value to a potential buyer will depend on different factors, and three main variables often used in an analysis are loan volumes, margins, cost structure, & profitability, and the current policies, procedures, & business model.

    Of course, repurchase obligations are included, as well as existing or potential liabilities. Are there outstanding lawsuits? Is the buyer buying the entire company, or a percentage of ownership… a minority ownership has very little value. It is not a simple process, and making assumptions about the future is problematic. A thorough examination of these factors is where the value of a competent advisor shows itself.

    Capital Markets

    Spoiler alert: our Federal Reserve doesn’t set mortgage rates, but the “hawkish” tone from Federal Reserve Chairman Jerome Powell was an indication that there won’t be much slack in the battle to bring down inflation. If they are any indication, futures trading is pricing in roughly a two-thirds probability that the central bank will boost its key interest rate by a quarter percentage point in November after a pause in September.

    In an eagerly anticipated speech from Jackson Hole on Friday, Fed Chair Powell made no bones about the Fed’s unwavering pursuit of returning annualized inflation to 2 percent. As far as the Fed is concerned, the message is “stay the course” even if that means even higher interest rates. Powell reiterated that the Fed would not change its long-term inflation target of 2 percent as some market commentators may have hoped and reaffirmed the reliance on incoming economic data and the potential to further tighten monetary policy if the conditions warrant. His wholly expected remarks seem to have had a calming effect on markets. Other central bank chiefs echoed Powell in projecting a cautious stance, saying the inflation triggered by Covid-19 and its fallout has not been fully conquered.

    While recent data has been trending in the Fed’s desired direction, Powell noted that the previous two months of data are not enough to instill confidence that inflation will continue to trend down towards the Fed’s goal. There are still supply and demand imbalances that put upwards pressure on inflation specifically as it pertains to shelter and non-housing services. Overall, goods prices have declined and residential lease rates are cooling, however home prices remain high due to lack of supply. Given the desire not to repeat the mistakes of the 1970s in declaring victory over inflation too soon, it is not surprising the tone of the Fed continues to be one of caution, which may continue even as more positive data is released.

    The Federal Reserve is data-dependent, of course, and this week is packed with potential market moving events including front-loaded month-end supply, and economic data including several labor market indicators, culminating with monthly U.S. employment numbers that will be released on Friday, and Fed-favorite PCE on Thursday, which also happens to be month-end. Other economic data of interest include housing-related releases, consumer confidence, GDP, Chicago PMI, ISM, and construction spending. The start of the week is all about supply with the Treasury auctioning $45 billion 2-year notes and $46 billion 5-year notes. Today also brings Dallas Fed Texas manufacturing for August and comments from Fed Vice Chair for Supervision Barr. We begin the week with Agency MBS prices roughly unchanged from Friday’s close and the 10-year yielding 4.23 after closing Friday at 4.24 percent. The 2-year is at 5.10 after Fed Chair Powell’s Friday comments drove the yield higher.

    Employment

    “A seasoned executive is looking to explore the next growth and strategic opportunity. Over the course of a twenty-three-year career, I developed expertise in many aspects of the business, spanning retail, wholesale, and correspondent production. Background also includes a deep understanding of MSR and servicing operations. Proven ability to manage businesses at scale, with a strong focus on compliance, credit, and enterprise risk management. Passionate about process optimization and leveraging technology to drive efficiency, all while fostering a positive organizational culture. Track record includes driving maximized revenue through aggressive yet responsible growth strategies. Working for private equity-owned organizations, providing valuable experience in capital acquisition and broad investor relations. If you’re interested in learning more about my background and how I can contribute to your team’s success, please don’t hesitate to contact Anjelica Nixt to forward your note.”

    The Maryland regional office of USA Mortgage has added leading Home Loan Officer Jamison Mullen to its team. Mullen, a 20-year industry veteran, joins a USA office headed by Bill Sohan who recently came on board as a regional vice president. “I wasn’t looking for a change. I was with a great company. But sometimes an opportunity arises that you can’t ignore,” said Mullen. “When Bill and Sam Rosenblatt approached me about joining forces, I had to listen. And as soon as I met the corporate leadership team at USA Mortgage, I knew they were the kind of people I wanted to work with for the remainder of my career.” Founded in St. Louis in 2001, 100 percent employee-owned USA Mortgage has offices in 34 states and is licensed in 49 states plus the District of Columbia. For a confidential conversation about joining USA, contact Bill Sohan at 410-963-2308.

    Quality. Stability. Virtue. Traits that define a successful mortgage company, or any company, for that matter. But when we’re talking about mortgages, InterLinc Mortgage hits the mark on these three skills, and more. With an average of $32 million in annual production per Loan Originator, the mortgage team not only kept pace through a turbulent market, but they did also so with excellence. Scotsman Guide’s 2022 Top Overall Lender and Top Retail Lender awards prove the grit and sustainability displayed by the producers (which is an assembly of the elite) and its leaders. A company that proves fortitude and character…worth the look.

     Download our mobile app to get alerts for Rob Chrisman’s Commentary.

    Source: mortgagenewsdaily.com