And on that note, Frazier is seeing an increase in beverage centers, which encompasses every drink throughout the day, from breakfast to cocktail hour. “In the past a beverage center was maybe just a coffee bar or a cocktail bar, but now people want them to be multipurposeful, a place where they can make their morning coffee or tea, make a smoothie bowl after a workout or pour a beverage after work.” Most of these areas include a beverage fridge or fridge drawers, a built-in pullout trash can, a wine fridge, a sink, and cabinets for blenders, coffee pots or tea kettles. “It depends on the person, of course, but they are designed for how they want it to function,” she says.

Trend: Cozy spaces

“The light airy home has had its moment,” says designer Kara Adam. “People now want a cozier environment rich in color.”(Michael Hunter)
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Homes built in the last decade mostly feature open-concept floor plans, which usually include an open family room, kitchen and breakfast nook. But Adam is hoping to design cozier spaces in the next year. “No one wants to relax in their family room when they are sitting on the sofa and behind them is the kitchen,” she says. Dirty dishes, a pot of soup on the stove or clutter on the countertops does not create for a relaxing space. “Creating separation is good for your mental health,” she says. “You can step away from it and go back and clean it up later.” Plus, when a space is large and open, there is no breaking point for a designer to do something playful and fun on the walls or molding. “When it’s one huge space, it’s a lot harder to upholster or lacquer a wall,” she explains.

Her clients are also asking for game rooms. “We can’t do enough of them,” she says. “We are redoing spaces so that people can have a mahjong room. In our home we have a table built for mahjong, but when it’s not set up for that, we always have a puzzle out, too. Work on a puzzle for 20 minutes and it’s good for your brain and it slows things down. Then you can go back to running around or going to carpool,” she says.

Trend: Textured and printed wallpaper

Patterns, textures and fabrics are big in wall coverings this year. Brian Yates, principal designer with Yates Desygn, covered this bedroom in Ever Atelier x Yates Desygn “In-Site” patterned wallpaper.(Michael Wiltbank)
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Wallpaper has been trending for some years now, and it’s still holding strong in 2024, especially selections that boast texture, bold patterns and fabric. “In 2023, we launched our first wallpaper collection with Ever Atelier, Ever X Yates, and it led us to experiment with wall coverings in new ways. For example, new construction ceilings are typically much taller nowadays, and implementing wallpaper can help weigh it down and feel more proportional,” says Bryan Yates, principal designer of Yates Desygn. “In addition, we are currently framing three panels of a de Gournay print to work as a 9-foot-by-9-foot piece of art and create a more significant moment in a client’s dining space rather than using traditional panels as a series.”

Adam notes that adding the right wallpaper to a space helps to evoke a mood, too. “People are wanting texture as opposed to a super flat, quiet space. For instance, when you’re having a dinner party in a dining room covered in cool silk wallpaper, it makes people want to stay. We want our clients to have dinner parties that go on all night,” she says.

Related Stories

Source: dallasnews.com

Apache is functioning normally

Compliance, Asset Mgt., PPE, DPA Tools; Assorted TPO News; STRATMOR on Profitability

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Compliance, Asset Mgt., PPE, DPA Tools; Assorted TPO News; STRATMOR on Profitability

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Thu, Jan 25 2024, 2:48 PM

Who doesn’t think swearing parrots are funny? Although you wouldn’t want your parrot talking about the clap when Aunt Beatrice comes over for Sunday dinner. I’m sure that every LO has heard their share of salty words, and they deal with much more for their clients than just a loan. Working with their client’s debts, assets, rental insurance until they buy a home, even servicing after the loan funds, you name it. Everyone across the nation is feeling the brunt of seemingly usurious homeowner insurance rates, and The Mortgage Collaborative’s Rundown tomorrow has Andrew Hellard, SVP of Products with Matic, discussing why homeowner’s insurance costs have skyrocketed. IMBs have not been retaining servicing. They needed the cash. Companies like Freedom, AmeriHome, Pennymac, and Planet Home have been buying up servicing. They will retain that customer if and when refinancing kicks in. Rate and term refis will probably go to the aggregators. They bought the servicing; they want to keep that customer. What percentage of customers will go back to the original lender, increasing the recapture rate? It may very well depend on what the customer service was like initially. (Today’s podcast can be found here and this week’s is brought to you LoanCare, successfully navigating clients and homeowners through market change for 40 years. The mortgage subservicer delivers superior customer experience through personalization and convenience via its portfolio management tool, LoanCare Analytics™, supporting MSR investors with a focus on customer engagement, liquidity, and credit risk. Hear an interview with Angel Oak Mortgage Solutions’ Tom Hutchens on his real estate market outlook for 2024 and securitizations in the Non-QM space.)

Broker and Lender Products, Programs, and Software

Mortgage leaders: The home insurance market is facing unprecedented volatility with carriers declining new business and increasing premiums to an all-time high. This can delay closings and even lead to DTI exceeding acceptable limits once insurance costs are factored in. Matic, a home insurance marketplace built for the mortgage industry, helps borrowers save time by shopping multiple A-rated carriers at once and providing transparent pricing and coverage options. With flexible integration options, Matic adds visibility and control, allowing lenders to foresee potential issues that could result in delayed closings. To learn how mortgage enterprises like New American Funding and PRMG are partnering with Matic, book a demo today.

Ready to help more borrowers tackle affordability? Click n’ Close has provided more than 1.5 billion dollars in DPA-related financing to over 6,000 borrowers through its SmartBuy suite of products, with an average of nearly $12,500 in assistance per transaction. Unlike state or municipal DPA programs, SmartBuy isn’t subject to budgetary shortfalls and offers tremendous flexibility to accommodate a wider range of borrower scenarios, making it ready to help your borrowers achieve homeownership. From start to finish, SmartBuy offers a streamlined process for all parties. With lower capital requirements and short turn times, Lenders can be up and running with SmartBuy in a snap. In addition, wholesale loan program information is available in today’s leading product pricing engines (PPEs), including Optimal Blue, MeridianLink’s Price My Loan, Lender Price, and Polly. Reach out to our wholesale (Adam Rieke, Kerry Webb and Soliman Martinez) or correspondent team (Julas Hollie) to learn more.

‘App’ [noun] – an application designed for a mobile device. ‘Optimal Blue PPE’ [proper noun] – the mortgage industry’s most widely used product, pricing, and eligibility engine. These terms probably aren’t new to you, even if vocabulary wasn’t your best subject in school. But one piece of information you won’t find in a dictionary is that the Optimal Blue PPE is now available in a native mobile app for Android and iOS. That’s right: Loan officers can put “pricing in their pocket” with complete access to scenario pricing and more, the exact moment they need it. It’s time to leave your dictionary AND your laptop behind and take the power of the Optimal Blue PPE wherever business takes you. The enhanced iOS app even includes publicly accessible pricing analysis from the Optimal Blue Mortgage Market Indices. Simply have your company’s account admin enable access today.

“Planet Management Group is your trusted and proactive partner for residential and commercial asset management. Our private clients gain access to specialized technology, expert advisory services, and clear insights into residential and commercial market opportunities. Embrace performance. Experience PMG. email or call (585) 512-1030 and discover the PMG difference today.”

Successfully managing MSR portfolios can be a lucrative endeavor, but navigating regulatory compliance, risk management, and understanding market values can be daunting. Join MQMR and MCT for a webinar on February 15th at 11am PT entitled MSR Risk Management, Compliance, and Current Market Strategies, where panelists will dive into operational and regulatory best practices, share invaluable tips to avoid common MSR management pitfalls, and provide insights into current pricing trends. The joint webinar will also explore crucial topics such as servicing regulatory developments (FHFA, GSEs, NCUA, GAAP compliance), a bulk MSR market update, trends in retained vs. released vs. co-issue, and understanding the value of your portfolio. Don’t miss this opportunity to enhance your portfolio management skills and elevate your lending income. Register today for a comprehensive session that will empower your financial strategies.

STRATMOR on Profitability

In his 1943 paper, “A Theory of Human Motivation,” Abraham Maslow identified five levels of human needs, from the most basic to the most advanced. In STRATMOR Group’s January Insights Report, Senior Partner Jim Cameron borrows from Maslow’s famed “hierarchy of needs” theory to offer mortgage lenders a real-world approach to shaping their strategies in 2024. STRATMOR’s January InFocus article, “Maslow and Mortgages – The Path to Actualization in Today’s Market,” outlines a similar hierarchy that recommends lenders get back to consistent profits before embarking on their longer-term strategic goals. Check out STRATMOR’s full January Insights Report here.

News and Industry Updates

“AnnieMac Home Mortgage is delighted to share a momentous announcement that symbolizes our commitment to progress and innovation: the unveiling of our new brand… Our new brand is a reflection of AnnieMac’s journey, capturing the spirit of adaptability and forward momentum that has defined our organization. At the heart of this evolution is the distinctive chevron symbol.” (Editor’s note: Cynics would say that “momentous” might be a stretch, reserved for things like landing on the moon, finding Amelia Earhart’s plane, or scaling Mt. Everest. But hey, if it gets more business…!)

Pennymac was recently alerted to an appraiser fraud scheme where appraisal reports were completed by an unlicensed appraiser unlawfully using the identities of other actively licensed appraisers. The appraisal reports were completed over the past two-year period and there is no evidence the appraisers whose identities were used were aware of or involved in the activity. Details are posted on the in Pennymac Announcement 24-04.

Do your clients need to access home equity? Kind Lending offers Closed End Seconds (CES) financing through piggyback and standalone programs. CES financing allows borrowers to access cash from their home equity without impacting their original loan rate.

Per the Pennymac Announcement 24-02, Jumbo LLPAs will be updated effective for all Best Efforts Commitments taken on or after Monday, January 8, 2024 as follows: Improving values on the ‘Occupancy Adjustments’ LLPA grid. Updating values for the ‘Purchase’ LLPA on the ‘Loan Purpose Adjustments’ LLPA grid.

Capital Markets

The United States cannot be an island of prosperity. This week has been an excellent example of how international events can impact domestic mortgage rates. Germany’s economy is in the doldrums. Houthi rebel attacks on ships and allied responses in the Red Sea have resulted in a spike in producer costs that is likely to be passed along to consumers, hurting the Fed’s quest to return U.S. inflation to its 2 percent target. China has ramped up stimulus, saying it will reduce the reserve requirement ratio for banks by 50 basis points in early February, a move that will add $139 billion in liquidity to the market, but also stoked fears of larger contagion. The release of flash Manufacturing and Services Purchasing Manager Indices readings from major world economies mostly showed an ongoing contraction, providing markets ammo for pricing in early and deep Fed rate cuts. And quarterly corporate earnings results for companies around the globe, with a particular focus on forward looking guidance, has investors less convinced of signs that the Fed’s historic tightening cycle will tilt the economy into recession.

In this country, bond prices, and therefore rates, are based on supply & demand and we learned yesterday that the Treasury sold $61 billion in 5-year notes to weak demand. Part of that stems from stock market highs and consumer sentiment in January rebounding to the highest level since mid-2021, but also from cautious “Fed speak” recently and stronger than expected data. Attention now turns to GDP from Q4 of last year. Real GDP growth is seen slowing from Q3’s unsustainably robust 4.9 percent annualized increase and is expected to show that the economy expanded at a 2 percent annual rate in the final three months of 2023. Household spending is expected to be the main driver of both stronger growth and overall spending than was anticipated at the start of the quarter. Those factors may keep the economy from dipping into a recession even if there isn’t much help from other sources of growth. In fact, household incomes are now outpacing inflation.

Today’s economic calendar begins a deluge of data over the next several sessions and was kicked off by advanced Q4 Gross Domestic Product (+3.3 percent). GDP was expected to increase 1.3 percent versus 4.9 percent previously, with final sales 2.5 percent higher versus 3.6 percent in Q3. The core Personal Consumption Expenditure (PCE) Deflator registered +2.0 percent, unchanged from last month’s reading. The Price Index +1.5 percent.

We’ve also received Durable Goods Orders (flat on the month, ex-transportation +.6 percent), weekly jobless claims (+214k, 1.833 million continuing), advanced indicators for December (previous goods balance…, retail inventories …, and wholesale inventories…), and the Chicago Fed National Activity Index for December. Later today brings December new home sales, KC Fed manufacturing for January, the Treasury auctioning off $41 billion 7-year notes, and Freddie Mac’s latest Primary Mortgage Market Survey. Norges Bank was out with its latest monetary policy decision overnight (no change), as well as the European Central Bank’s decision (no change) with ECB head Lagarde’s press conference. We begin the day with Agency MBS prices a few ticks (32nds) better, the 10-year yielding 4.14 after closing yesterday at 4.18 percent, and 4.35 on the 2-year.

Jobs

“Attention Mortgage Brokers: Are you feeling isolated? Are you lacking support or struggling to establish relationships in this shifting market? Take your career to new heights with RWM Home Loans, a trusted name in home financing with over 30 years of excellence. With our FNMA, FREDDIE and GNMA approvals, we offer a wide range of products and direct loan servicing, empowering our sales team to fund both in-house and with brokered solutions. Whether you’re assisting first-time homebuyers, navigating Jumbo, Non-QM, reverse mortgages, or managing construction loans, we have the solutions to meet your clients’ needs. Do you want a voice at the table and the ability to provide 5-star service, best in class technology, and competitive pricing for your borrowers? If you are evaluating your options and looking for a top tier lending partner, contact us now for a confidential conversation.”

A strategic CFO is available on short notice. Experience in conventional/conforming markets, non-QM, Fix & Flip, and DSCR products, in distributed retail and wholesale channels in public and private lenders, backed by PE and venture capital. 15+ years’ experience in start-up, high growth middle market and public companies. Fintech lender experience including AI, machine learning and predictive modeling. Comfortable working at both a strategic level and a hands-on operational level. Also open to work on M&A transactions or restructurings. Interested companies should contact Chrisman LLC’s Anjelica Nixt to forward your note.

“PrimeLending offers Branch Managers the flexibility to structure their branch for maximum growth and profitability. As a Branch Manager at PrimeLending, you’ll have the power to make operational decisions, construct your team and truly lead. Branch structures range from a traditional Retail Model to our Modern Originator Model leveraging both retail and virtual production teams to our Expense Management Model giving you unparalleled control over how you invest in your business. Don’t settle for the status quo… Explore all your options and take more control over your future. We’re looking for talented, driven Branch Managers and Loan Originators! Contact Nic Hartke today!”

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

Source: mortgagenewsdaily.com

Apache is functioning normally

The stock market is hitting new highs. What should we make of this?

This week,  the S&P 500 reached yet another record high — marking its fourth consecutive day reaching a new all-time high.

Last Friday (the first of these four consecutive trading days) marked the first time in two years that the S&P 500 finished at an all-time high.

Here’s an 11-minute video recapping what happened:

After two years of not achieving any new highs, the S&P 500 is now breaking records daily.

How do we interpret this? Here are a few things to keep in mind:

(1) The high is comprehensive.

The S&P 500 — which tracks 503 stocks — represents about 80 percent of the overall market.

It’s a more comprehensive indicator of the overall market than the Dow Jones, which tracks only 30 large companies. The Dow took a slight dip today, but both the Dow and the NASDAQ hit new highs in December.

The Dow is an excellent indicator of how large companies are faring. But the S&P 500, by virtue of tracking a much bigger basket, is a better reflection of how the overall market, including small and medium sized companies, are also performing.

(2) The tech sector dominates the all-time highs.

Tech companies make up the largest chunk of the S&P 500. Here’s a chart of the top ten companies by weight for SPY, an exchange-traded fund that tracks the S&P 500:

Source: slickcharts​

The top ten companies in SPY are nearly all in the tech sector. This stands in contrast to the wider, more expansive range of sectors that comprise the top ten Dow Jones companies by weight:

Translation: while the overall market (including small and mid size companies) is doing well, the bulk of the gains are still being driven by tech.

The same small group of megacap companies — the “Magnificent Seven” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) — that drove much of last year’s growth continues to lead the way, fueled by hopes of an artificial intelligence boom.

But what’s interesting is that the equal-weighted S&P 500, in which every company within the index gets the same weighting, is only slightly lagging the standard S&P 500. Yes, equal-weighted is behind, but not by much. Translation: even without the oversized influence of the Magnificent Seven, the index is running strong.

The market has also priced in the expectation that the Federal Reserve will lower interest rates this year, which leads to the next point …

(3) The Fed will send new signals at the end of January.

The next Fed meeting is Jan 30-31, at which point we’ll know whether the Fed is ready to start cutting interest rates yet.

The Fed held rates steady during their last two meetings, held in September and November 2023.

They’re widely expected to cut rates in 2024, but the debate that economists and market-watchers are holding is when? — could it be as early as next week? (Unlikely, but possible.) Or will it happen during one of their following meetings on March 19-20 and April 30-May 1st?

Many analysts expect that the Fed will hold rates steady this winter and begin cutting in the spring or summer, but the substantial improvement in inflation data has some people feeling optimistic that these cuts might come sooner than later.

The Fed rate cuts are expected to unleash pent-up demand for everything from cars to houses and make capital more accessible for companies.

Homebuying, in particular, is expected to rise as interest rates drop, leading to a projected minor climb in home prices this year. (Mortgage interest rates are at their lowest point since last May.)

Summary: Big Tech is fueling record-high market growth, inflation is under control, and the overall economy looks resilient.


The average person is starting to feel better about their wealth.

The U.S. Consumer Sentiment Index is at its highest point since July 2021. As the name implies, this index measures how confident and optimistic people feel about their finances.

This survey, conducted by the University of Michigan, shows huge gains in households feeling more confident that inflation is behind us, jobs are strong, and income can keep up with expenses.

The index climbed a cumulative 29 percent over the last two months. That’s the biggest two-month leap since 1991.

That said, we’re still no where close to our 2018-2019 confidence levels.


What’s the takeaway from all of this?

Economic data is strong. Markets are on a tear. Consumer sentiment is improving. The year ahead has plenty of cause for optimism.

Blackstone CEO Steve Schwarzman, at the World Economic Forum in Davos, mentioned that he thinks “animal spirits” — the role emotions play in the markets — will be strong this year.

Given how much is riding on consumer confidence in this (almost) post-inflationary world, that’s particularly apt.

For more detail, watch the latest YouTube breakdown.

And I’ll see you in the next newsletter!

— Paula

Source: affordanything.com

Apache is functioning normally

A variety of notable mortgage rates slumped over the last seven days. While 15-year fixed mortgage rates moved higher, interest rates on 30-year fixed mortgages shrank. For variable rates, the 5/1 adjustable-rate mortgage sunk lower.

  • 30-year fixed mortgage: 6.99%
  • 15-year fixed mortgage: 6.47%
  • 5/1 adjustable-rate mortgage: 6.12%

In November, the average rate for a 30-year fixed mortgage started making sustained drops from its earlier peak of 8%. The most common home loans are now in the 6% to 7% range. Yet the mortgage market always has some level of volatility, and rates have already started inching back up at the start of this year.

“It’s not uncommon to see a shift in the pattern for interest rates in January, sometimes positive, sometimes not,” said Keith Gumbinger, vice president of mortgage site HSH.com.

The current housing market is difficult. High mortgage rates, expensive home prices and tight inventory are keeping homebuying out of reach for many. If you’re looking to buy a home, don’t try to time the market. Instead, experts recommend patience and preparation: Figure out what you can afford and take steps to improve your financial situation.


About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use when comparing multiple mortgage rates.


Today’s average mortgage interest rates

If you’re in the market for a home, check out how today’s mortgage rates compare to last week’s. We use rates collected by Bankrate to track daily mortgage rate trends. This table summarizes the average rates offered by lenders across the country:

Today’s mortgage interest rates

Loan term Today’s Rate Last week Change
30-year mortgage rate 6.99% 7.00% -0.01
15-year fixed rate 6.47% 6.46% +0.01
30-year jumbo mortgage rate 7.02% 7.05% -0.03
30-year mortgage refinance rate 7.19% 7.21% -0.02

Rates as of Jan. 26, 2024

How to choose a mortgage

When picking a mortgage, consider the loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, although 10-, 20- and 40-year mortgages also exist. You’ll also need to choose between a fixed-rate mortgage, where the interest rate is set for the duration of the loan, and an adjustable-rate mortgage. With an adjustable-rate mortgage, the interest rate is only fixed for a certain amount of time (commonly five, seven or 10 years), after which the rate adjusts annually based on the market’s current interest rate. Fixed-rate mortgages offer more stability and are a better option if you plan to live in a home in the long term, but adjustable-rate mortgages may offer lower interest rates upfront.

30-year fixed-rate mortgages

The 30-year fixed-mortgage rate average is 6.99%, which is a decline of 1 basis point from seven days ago. (A basis point is equivalent to 0.01%.) A 30-year fixed mortgage is the most common loan term. It will often have a higher interest rate than a 15-year mortgage, but you’ll have a lower monthly payment.

15-year fixed-rate mortgages

The average rate for a 15-year, fixed mortgage is 6.47%, which is an increase of 1 basis point from the same time last week. Though you’ll have a bigger monthly payment than a 30-year fixed mortgage, a 15-year loan usually comes with a lower interest rate, allowing you to pay less interest in the long run and pay off your mortgage sooner.

5/1 adjustable-rate mortgages

A 5/1 adjustable-rate mortgage has an average rate of 6.12%, a fall of 25 basis points compared to last week. You’ll typically get a lower introductory interest rate with a 5/1 ARM in the first five years of the mortgage. But you could pay more after that period, depending on how the rate adjusts annually. If you plan to sell or refinance your house within five years, an ARM could be a good option.

Calculate your monthly mortgage payment

Getting a mortgage should always depend on your financial situation and long-term goals. The most important thing is to make a budget and try to stay within your means. CNET’s mortgage calculator below can help homebuyers prepare for monthly mortgage payments.

When mortgage rates will stabilize, according to experts

Mortgage rates were near record lows, around 3%, at the start of the pandemic. That changed as inflation surged and the Federal Reserve kicked off a series of aggressive interest rate hikes, which indirectly drove up mortgage rates. Now, mortgage rates are still more than double what they were just a few years ago.

However, with the central bank keeping interest rates steady since late July, mortgage rates finally saw some sustained decreases in the fall. With the Fed planning to announce its next policy move in late January (and again in mid-March), experts are waiting for the first interest rate cut. It may be months before that happens, but mortgage rates could stabilize and start inching even lower in the coming months.

““The history of economic cycles has taught us that when the markets believe the Fed is done hiking rates, [mortgage rates] make a big move lower before rate cuts happen,” said Logan Mohtashami, lead analyst at HousingWire.

What affects mortgage rates?

  • Federal Reserve monetary policy: The nation’s central bank doesn’t set interest rates, but when it adjusts the federal funds rate, mortgages tend to go in the same direction.
  • Inflation: Mortgage rates tend to increase during high inflation. Lenders usually set higher interest rates on loans to compensate for the loss of purchasing power.
  • The bond market: Mortgage lenders often use long-term bond yields, like the 10-Year Treasury, as a benchmark to set interest rates on home loans. When yields rise, mortgage rates typically increase.
  • Geopolitical events: World events, such as elections, pandemics or economic crises, can also affect home loan rates, particularly when global financial markets face uncertainty.
  • Other economic factors: The bond market, employment data, investor confidence and housing market trends, such as supply and demand, can also affect the direction of mortgage rates.

Mortgage rate forecasts from experts

While mortgage forecasters base their projections on different data, most predict rates will remain near or above 7% for the rest of 2023. Here’s a look at where some of the major housing authorities expect average mortgage rates to land at the end of the year.

How to find the best mortgage rates

Though mortgage rates and home prices are high, the housing market won’t be unaffordable forever. It’s always a good time to save for a down payment and improve your credit score to help you secure a competitive mortgage rate when the time is right.

  1. Save for a bigger down payment: Though a 20% down payment isn’t required, a larger upfront payment means taking out a smaller mortgage, which will help you save in interest.
  2. Boost your credit score: You can qualify for a conventional mortgage with a 620 credit score, but a higher score of at least 740 will get you better rates.
  3. Pay off debt: Experts recommend a debt-to-income ratio of 36% or less to help you qualify for the best rates. Not carrying other debt will put you in a better position to handle your monthly payments.
  4. Research loans and assistance: Government-sponsored loans have more flexible borrowing requirements than conventional loans. Some government-sponsored or private programs can also help with your down payment and closing costs.
  5. Shop around for lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate for your situation.

Source: cnet.com

Apache is functioning normally

The past three years in the mortgage industry were cutthroat, with origination volume shrinking, and while things are looking better for 2024, lenders are still in a position where they must make bold moves to stem losses on the production side of the business, according to a report from Stratmor Group, a mortgage advisory firm.

More than half of mortgage executives who participated in Stratmor’s recent survey indicated that they do not believe their companies have turned the corner to become profitable when it comes to originations — excluding servicing.

About 85% of surveyed executives believed that their company was either not profitable or was roughly breaking even in production.

If lenders’ losses come in as expected during fourth-quarter 2023 and first-quarter 2024, it will represent eight consecutive quarters of losses for more than 350 independent mortgage bankers, said Jim Cameron, senior partner at Stratmor.

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks have collectively been in the red for six consecutive quarters. Most recently, they reported an average net loss of $1,015 on each loan they originated in third-quarter 2023 — doubling the reported loss of $534 per loan in Q2, according to data from the Mortgage Bankers Association (MBA).

While lenders have been aggressively cutting labor costs — their largest type of expense — it has not been enough to reduce per-loan production expense. 

Even with massive cuts to gross production expenses (from $44 million per company in Q3 2020 to $18 million in Q1 2023), the cost per loan has increased to more $13,000 as loan production units dropped off dramatically during that period.

As of Q3 2023, total loan production expenses were $11,441 per loan, up slightly from $11,044 in the prior quarter.

“As we head into 2024, it is clear we still have excess capacity and lenders must continue to be disciplined and aggressive in managing staffing levels,” Cameron said.

While labor is the priority when it comes to reducing costs, cutting down lease costs and making use of the hybrid work model; reviewing vendor contracts; and weeding out plug-ins with high costs and low adoption rates are needed, according to the report. 

The silver lining for IMBs, in general, are their strong cash balances, the report noted. 

After bouncing between the $6 million to $8 million range in 2018 and 2019, average cash balances now stand at about $11.5 million as of Q3 2023. Lenders sold off much of their servicing portfolios in 2022 and 2023, and balances would have been much lower without these moves, according Cameron.

“After a very challenging 2023 and not much relief expected in 2024, lenders must have a renewed focus on cash flow forecasting,” Cameron said.

“As a foundational need, mortgage bankers must ensure that they have a robust mechanism in place to forecast short-term, intermediate, and long-term cash flows. And coming in a close second is the need to get razor sharp with financial and operational reporting and monitoring of key performance indicators (KPIs). Mortgage bankers must be highly skilled at examining both costs and performance across a variety of dimensions, including fixed versus variable and break-even-point analyses,” he added.

Source: housingwire.com

Apache is functioning normally

If someone has access to both your bank account and routing number, they could make fraudulent ACH transfers and payments out of your account. In other words, you could wind up being scammed.

That’s why it’s so important to understand this aspect of your personal finances and protect your money. Read on to learn what happens if someone has your bank account number and routing number, what the risks are, and how to protect yourself.

What Can Someone Do With Your Bank Account Number Alone?

Many of us wonder, “What can someone do with my bank account number?” The good news is, if someone has only your bank account number, that won’t give them enough intel to do any damage. It’s not the same as a scammer obtaining your credit card digits. No one will be able to withdraw money from your personal bank account if all they have is your account number.

For those who may not know the difference between a bank account vs. a routing number, here’s the scoop:

•   Your bank account number is the unique string of digits that identifies your particular account at a financial institution. Even if you have, say, multiple accounts at a bank, each will have its own distinct account number.

•   Your routing number is the series of numerals that identifies your financial institution, or where the account is held.

Just because your bank account number alone doesn’t make you vulnerable doesn’t mean that you shouldn’t protect it. You should. If a scammer had your account number and other info — perhaps your driver’s license number and/or your home address — they might be able to make illegal purchases online. So it pays to be vigilant.

Routinely monitoring your account activity — say, once a week — is a smart move that allows you to quickly detect if anything is awry.

💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.

What Can Someone Do With Your Bank Account and Routing Number?

The short answer: Real damage. The combination of a bank account and routing number is a dangerous combo that scammers want. And those two numbers are fairly accessible. Think about how often these numbers get circulated: every time a check is written, cashed, signed over to someone else.

Here’s what can happen if they fall into the wrong hands.

ACH Fraud

With both those precious numbers, crooks could commit fraudulent automated clearing house (or ACH) transfers and payments. You’re probably used to seeing those ACH letters on your banking details when you set up automatic monthly payments and the like. When a scammer has your bank account and routing numbers, they could set up bill payments for services you’re not using or transfer money out of your bank account.

It’s tough to protect these details because your account number and routing number are printed right at the bottom of your checks. But do your best. Some pointers:

•   Don’t leave your checkbook lying around.

•   If you are mailing a check, wrap it in a sheet of blank paper so the numbers don’t show as it’s in transit.

•   Pay attention to bank statements. Review them often to see if there are any fishy transactions happening.

•   Protect yourself when online banking by using strong passwords. That password is a primary defense. If a thief has your bank and routing numbers and somehow manages to get access to your login name and password, big trouble may be on the horizon.

•   Don’t make your password something obvious like your name, pass1234, or numbers that may be circulating in cyberspace, like your birthday which can be seen on Facebook.

Online Shopping

Know that all online retailers aren’t equal in terms of security measures. Some will allow people to make a purchase with bank account information alone, while others will also ask for a driver’s license or other state identification to add an additional layer of protection.

So what can a scammer do with your bank account number and routing number? They can find sites that let them shop with only that information. and could run up a tab.

Depositing Money

While it might seem like a dream come true if a mysterious sum of money appeared in your bank account, you should be more alarmed than overjoyed. Somebody who has your account and routing number may be using your digits to facilitate their illegal shenanigans (such as the kind of bank fraud known as money laundering). Report unusual deposits immediately.

Create Fraudulent Checks

Unfortunately, scammers can create fake checks using your checking numbers, and then those fake checks to pay for purchases (not every payee will verify a check) — or simply cashing them. Know, too, that with technology scammers could digitally scan the check and deposit the amount into their bank account.

Get up to $300 when you bank with SoFi.

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What to Do When Someone Has Your Bank Numbers

As careful as you try to be, stuff happens. What if someone has your bank account number and routing number? What if you see signs that they are using it for fraudulent transactions? Knowing how to report identity theft can help mitigate a bad situation. Have a strategy in place, just in case. Here’s some advice.

Contact Relevant Agencies

If you have the misfortune of being victimized, here’s what to do:

•   Contact your bank the minute you realize it. You need to notify your bank within 60 days of your statement to avoid paying for unauthorized ACH transactions. The bank’s fraud department will work to help you get unauthorized charges reversed.

•   Report the fraud to the fraud department of all three credit reporting bureaus, Equifax®, Experian®, and TransUnion®.

•   File a report with your local police department.

•   Also file a report with the Federal Trade Commission’s department that deals with identity theft.

Your to-do list doesn’t end there. You’ll want to be a stickler about monitoring your bank account to look for any signs that someone else is abusing your account. Be proactive and ask your bank about setting up text messages or push notifications every time a transaction is posted. This will help you keep track of what’s going on with your money.

Much as you may not be a paper person, when you’re a victim of bank fraud, documentation matters. You want copies of bank statements, a copy of the police report, your credit report, and any other relevant materials.

Cancel Your Account

As much as it’s a hassle, you need to get a new account number to replace the compromised one. Call your bank’s customer service number, contact a rep by chat, or, if you use a traditional vs. online bank, go to your local branch. Explain your situation, and take steps to get your assets transferred to a new bank account, get new checks printed, and get a new debit card if needed to safeguard your cash.

Tips on Avoiding Bank Fraud

There are no absolutes in life, but there are steps you can take to protect yourself as much as possible.

•   You can get an identity theft protection service to monitor your bank accounts and alert you to any funny business, be it suspicious withdrawals or information changes.

•   When shopping online, use a credit card (it offers more protection than say a debit card), prepaid card, or a money transfer app instead of typing in your account and routing numbers.

•   Be stingy with your banking information to avoid bank scams. Know that less is best when it comes to sharing info.

•   Go for multi-factor authentication when banking online. If you have linked bank accounts and credit or debit cards to online platforms, absolutely sign up for additional verification in order for purchases to go through. It’s like a forcefield around your account.

•   It can be wise to limit your use of paper checks to only those things where an alternate form of payment is a hassle. Remember your checks are a gold mine of personal information, with your address, account and routing numbers.

The Takeaway

In today’s world, it pays to keep close tabs on your bank accounts and related numbers. Having your bank account and routing number can allow scammers to do damage in a variety of ways, from unauthorized ACH payments to fake checks. By protecting these digits and setting up other safeguards, you’ll minimize the odds of your falling victim to these wily thieves.

While on the topic of banking, it’s wise to make sure your financial institution is a good fit and offers the services and perks that suit you best.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with up to 4.60% APY on SoFi Checking and Savings.

FAQ

Which bank details should I keep secret?

Protect your bank account and routing numbers to avoid having scammers siphon money away from you. Setting up two-factor authentication for online transactions can help protect you, too. It goes without saying that no one except you should know your username, password, and security questions. Also shred financial documents that you don’t need.

Is it safe to give out your account details?

Share your banking information sparingly, especially online. At most, share a few key points with a trusted friend or family member, and only punch your details into secure websites (look for the “https” at the beginning of the url and the padlock symbol) — though even those aren’t 100% scam-proof.

Can I give out my routing number?

A bank routing number in and of itself reveals very little. After all, it’s a nine-digit code used by financial institutions to identify other financial institutions. It’s very much public information and only becomes a risk factor when paired with other personal details.

Can someone steal your money with your bank account number?

Typically, a scammer would need more than just a bank account number to steal your money, but routing numbers are easily found. With those two pieces of information, a crook could use those numbers for online purchases or to otherwise defraud you.


Photo credit: iStock/AJ_Watt

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The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBK0124019

Source: sofi.com

Apache is functioning normally

For some, the new tax season might serve as a stressful reminder of past taxes that have yet to be filed and paid. Taxpayers owed over $120 billion in back taxes, penalties and interest in 2022, according to the IRS. And there soon may be more concrete reminders coming: The IRS resumed sending automated collection notices for unpaid taxes in 2024 after pausing them “due to the unprecedented effects of the COVID-19 pandemic” in February 2022.

If you’re one of the many taxpayers who owe tax debt this season, addressing the issue sooner rather than later can save you from penalties, interest and other more serious consequences. And you can get started even if you can’t afford to pay in full. Here’s what you can do to get back on track.

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If you get a notice, read it

The longer you delay reading and responding to unpaid tax notices, the more serious your tax situation could become.

“People come into our office, and they have all these unopened letters,” says Kenneth Portera, an enrolled agent and owner of Kenneth Portera and Associates in New Jersey who works with clients who owe back taxes. He wishes people would open these notices when they arrive, he notes. “If you do get a letter, open it up and find out what’s going on.”

If you continue to ignore notices, the IRS may resort to severe measures, including tax liens, wage garnishment, asset seizure and passport restrictions. And if you owe state taxes, you could face additional collections and garnishments.

However, the IRS and state tax agencies will always try to contact you before escalating to more extreme measures. If you show the agency that you’re willing to pay — even if it’s not the full amount — you can avoid the worst outcomes.

Set up a payment plan

Most taxpayers can set up short- or long-term payment plans, including installment agreements, through the IRS website. To apply for one online, you must owe less than $50,000 in combined tax, penalties and interest for a long-term plan or less than $100,000 for a short-term plan. The agency waives setup fees for low-income taxpayers and has options for businesses, too.

Once you contact the IRS and set up a plan, the government will stop sending notices about your tax debt because collection has already been accomplished, Portera says.

If you have an existing payment plan, you can update it to account for this year’s taxes.

Contact a pro

Not everyone with overdue taxes needs a tax attorney. But if you’re dealing with tax authorities, owe large amounts of money or have a tax situation that you feel unable to handle on your own, Portera recommends enlisting the help of a licensed tax professional, such as a certified public accountant, enrolled agent or tax attorney.

When you don’t file your return, the IRS puts together a substitute return for you with a proposed assessment of what you owe. This tax return the IRS files for you is “almost always going to be not in your favor,” says Robert Persichitte, a CPA at Delagify Financial in Colorado who has experience working with clients in urgent tax situations.

According to Persichitte, some tax preparers will look at your substitute return for free and tell you if it needs to be amended. Sometimes, a licensed tax professional can negotiate with the IRS to reduce the amount you owe. In serious cases, they may help you apply for an offer in compromise, an agreement with the IRS that settles your tax liability at a lower amount.

Remember, though, that tax relief isn’t usually a quick fix — and promises of a dramatic cut to your tax debt may be a scam.

“If it sounds too good to be true, guess what? It usually is,” Portera says. The process for negotiating a reduced tax bill is complicated, he notes. If a tax relief company can’t deliver and fumbles communications, he adds, it could result in more interest and penalties for you, and no resolution.

For low-cost options, contact the Taxpayer Advocate Service or your local Low Income Taxpayer Clinic, which provides free or low-cost assistance for low-income taxpayers.

Simple tax filing with a $50 flat fee for every scenario

With NerdWallet Taxes powered by Column Tax, registered NerdWallet members pay one fee, regardless of your tax situation. Plus, you’ll get free support from tax experts. Sign up for access today.

for a NerdWallet account

Transparent pricing

Hassle-free tax filing* is $50 for all tax situations — no hidden costs or fees.

Maximum refund guaranteed

Get every dollar you deserve* when you file with this tax product, powered by Column Tax.

Faster filing

File up to 2x faster than traditional options.* Get your refund, and get on with your life.

*guaranteed by Column Tax

Don’t forget about current tax returns

When taking care of overdue taxes, don’t forget to file taxes for 2023.

Even if you have overdue penalties — or don’t have the funds to pay this year’s fees in full — stay compliant with the IRS by filing your returns annually. The agency is much more likely to waive your penalties or even agree to reduce your tax debt if you have a history of compliance.

Claire Tsosie, an assigning editor at NerdWallet, contributed reporting to this article.

This article was written by NerdWallet and was originally published by The Associated Press.

Source: nerdwallet.com

Apache is functioning normally

Mortgage interest rates were mostly up compared to a week ago, according to rate data compiled by Bankrate. Average rates for 30-year fixed, 15-year fixed and jumbo loans moved higher, while 5/1 ARM rates declined.

Mortgage rates could gradually come down this year, according to Greg McBride, CFA, Bankrate chief financial analyst. As the Federal Reserve stopped raising rates in 2023, mortgages rates started to drop at the end of Q4. The central bank now may start to cut rates in 2024 — a move that would have broad economic impact, including on the 10-year Treasury, the primary influencer of fixed mortgage rates.

“The 10-year Treasury yield that serves as a baseline for fixed mortgage rates will have a bouncy journey lower, moving back above 4 percent early in 2024 but trending lower as inflation cools and the Fed gets closer to cutting rates,” says McBride. “For mortgage rates, that portends a general downtrend — albeit with fits and starts — in 2024.”

Rates accurate as of January 25, 2024.

These rates are averages based on the assumptions indicated here. Actual rates available on-site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Thursday, January 25th, 2024 at 7:30 a.m.

Current 30 year mortgage rate advances, +0.02%

The average rate for a 30-year fixed mortgage for today is 7.03 percent, up 2 basis points over the last week. This time a month ago, the average rate on a 30-year fixed mortgage was lower, at 6.95 percent.

At the current average rate, you’ll pay $667.32 per month in principal and interest for every $100,000 you borrow. That’s $1.35 higher compared with last week.

Use our mortgage calculator to estimate your monthly payments and see how much you’ll save by adding extra payments. This calculator will also help you calculate how much interest you’ll pay over the life of the loan.

15-year mortgage rate goes up, +0.03%

The average rate for the benchmark 15-year fixed mortgage is 6.47 percent, up 3 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost $869 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARM rate drops, -0.24%

The average rate on a 5/1 ARM is 6.13 percent, ticking down 24 basis points since the same time last week.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be much higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.13 percent would cost about $608 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.

Current jumbo mortgage rate trends upward, +0.01%

The current average rate you’ll pay for jumbo mortgages is 7.07 percent, up 1 basis point since the same time last week. Last month on the 25th, the average rate was lower, at 7.00 percent.

At the current average rate, you’ll pay a combined $670.01 per month in principal and interest for every $100,000 you borrow. That’s an additional $0.67 per $100,000 compared to last week.

Refinance rates

30-year mortgage refinance rate declines, -0.05%

The average 30-year fixed-refinance rate is 7.17 percent, down 5 basis points from a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 7.09 percent.

At the current average rate, you’ll pay $676.76 per month in principal and interest for every $100,000 you borrow. Compared with last week, that’s $3.38 lower.

Where are mortgage rates going?

The Federal Reserve has signaled that it intends to cut rates in 2024, depending on inflation and employment data and other factors. The Fed meets again on Jan. 31.

Current average 30-year mortgage rates are slightly below 7 percent as of mid-January. As the year progresses, expect rates to slowly trend downward, says McBride.

“Mortgage rates will spend the bulk of the year in the 6s, with movement below 6 percent confined to the back half of the year,” says McBride.

The rates on 30-year mortgages mostly follow the 10-year treasury, which shifts continuously as economic conditions dictate, while the cost of variable-rate home loans mirror the Fed’s moves. These broader factors influence overall rate movement. As a borrower, you could be quoted a higher or lower rate compared to the trend.

What current rates mean for you and your mortgage

While mortgage rates change daily, it’s unlikely we’ll see rates back at 3 percent any time soon. If you’re shopping for a mortgage now, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.

To help you uncover the best deal, get at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

More on current mortgage rates

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

Apache is functioning normally

“OMG I missed it. I should’ve bought two years ago.”

“Am I too late? Are all the good deals gone?”

“Look at how much cheaper it used to be. I’m priced out now.”

“Isn’t my best bet to wait for a crash?”

Oh my dear friend.

Those sound like remarks made today … right?

Well, they’re not.

Those are the remarks I heard in 2015, even everyone was lamenting how much real estate prices had climbed, relative to 2012.

“Damn I should’ve bought back then! It’s too late now. Everything’s expensive again. I’ll just wait for prices to come down.”

I know, that seems silly in hindsight.

But put yourself in the shoes of an aspiring real estate investor in the year 2015. They had been thinking about buying a rental property for a year or two. But they hadn’t. And while they sat on the sidelines, prices skyrocketed.

The chart above covers January 2010 to December 2015.

In 2015, this was a prospective investors’ experience of the last 5 years. They saw home prices dip slightly from 2010 to 2012, and it scared them — “maybe there will be another crash!!” — so they sat on the sidelines.

Then the market boomed from 2012 to 2015, and by the end of that three-year period, they were kicking themselves to “waiting too long.”

“It’s too late!!!!!”

“The good deals are gone!!”

With the Great Recession in such recent memory, they comforted themselves with the idea that they could just kick back and wait for the next housing crash.

Nearly nine years later, they’re still waiting. And missing out on gains.

Here’s what the market did from January 2016 through May 2023:

Up, up, up, up, up.

Sliiiight dip for a few months in late 2022. Then up again.

The people who lamented that they’d “waited too long” and “it’s too late” psyched themselves out. They sidelined themselves. They missed those returns.

You see, pessimists get to make excuses. Pessimists get to validate themselves.

Pessimists get to be right.

Optimists get to be rich.


“The irony is that by trying to avoid the price, investors end up paying double,” Morgan Housel writes in his book, The Psychology of Money.

In that passage, he’s discussing stock investing, but the principle applies to real estate as well. Those who lament that real estate is too expensive, relative to its previous values, are the same people who eagerly buy an index fund without complaining that it, too, is substantially more expensive than it was a few years ago.

I’ve never heard anyone say: “VTSAX is 50 percent more expensive than it was five years ago! It’s too late to buy. The good deals are gone. I’ll wait for the next crash.”

Yet they’ll say that about real estate.

Sure, people might debate whether the stock market is overvalued. But if you’re a long-term investor, you dollar-cost average into the market.

You understand that a share of VTSAX will cost significantly more today than it did five years ago, because, well, assets appreciate over the long-term. That’s the point.

Ideally, real estate investors would be best-off viewing their properties through the same lens through which an index fund investor views their holdings.

Sometimes you’ll buy high. Other times, you might hold through a decline. But over the long-term, based on historic trends, both asset classes (real estate and index funds) significantly rise in value.

Yet often, would-be real estate investors seem to forget historical trends.

When the topic turns to rental properties, many would-be investors sideline themselves because they’re convinced that “I’m too late” and “the good deals are gone.”

Sure, you can’t blindfold yourself, throw a dart at a list of houses, and find one with an amazing cap rate, like you could in 2012.

Sure, you have to actually, erm, what’s that word … WORK.

Good deals are available for those willing to find them.

Back in 2015, I often heard people lament that they were “too late” because real estate prices had risen so much in the past three years. “I should’ve invested in 2012! The run-up has already happened. I’m too late. I’ll wait for the next crash.”

Nearly nine years later, they’re still waiting.

The question is: are you going to be one of those people who says “it’s too late! the good deals are gone!” and then sit on the sidelines for the next 30+ years? Or are you going to train and compete?

If you choose to leave the sidelines and get into the game —

The first step is to understand: It’s not too late.

The prices that existed five years ago are irrelevant.

The only question that matters: “Is this a good deal today?”

It’s easy to substantiate the belief that you’ve missed out on all the good returns — you can see how much home prices have appreciated over the past three years. You can see all the capital appreciation you could have had, if only you’d gotten started sooner.

Just like if you’d bought a ton of index funds in 2018. Or better yet, March 2009.

Assets appreciate.

Sometimes there’s volatility, and they drop a little bit. But historically, in the U.S., major asset classes — including stocks and real estate — have always risen over time.

We seem to have accepted this reality in the world of stock investing. We don’t reflexively lament *not* buying more index funds at 2012 prices.

We might occasionally joke about it — “awww man I shoulda bought Amazon in 1997!” — but we know that when we buy a stock, we’ve evaluating today’s fundamentals. Past is prologue.

When we evaluate stocks, we ask: “Is this stock a wise purchase at today’s price?” But we forget to ask this question when we’re dealing with a tangible asset class like real estate.

Real estate often fills people with fear:

  • It’s a single six-figure transaction; a larger dollar amount than an index fund.
  • You borrow money to get into the deal; leverage increases risk.
  • You assume you can’t dollar-cost average into real estate, like you can with stocks. (In reality, many rental investors *do* dollar-cost average into real estate by investing in one property per year, or one property every-other-year … some type of periodic pace.)

Real estate’s tangibility also makes it an inherently emotionally-charged asset class. We can touch it, smell it, see it, hear its creaks and noises.

And when emotions are involved, we rationalize rather than reason.

“Assuming that something ugly will stay ugly is an easy forecast to make,” Housel writes. “And it’s persuasive, because it doesn’t require imagining the world changing.”

Pessimism is tempting, but it’s also limiting — and its intellectually lazy.

It keeps you broke and uncreative.

Optimism, by contrast, keeps you asking “how can I?” — it keeps you solving problems, rather than lamenting them.

  • “How can I find properties with a solid cap rate and good cash flow located within a two-hour drive?”
  • “How can I improve my skills as a negotiator?”
  • “How can I analyze and cross-compare across multiple markets?”
  • “How can I save for a downpayment?”
  • “How can I get approved for a mortgage if I’m self-employed / if I don’t earn much?”

Ask “How can I?” rather than lamenting “I can’t because …” and you’ll find your world switch.

And if you want answers to the above questions, you’ll find them in Your First Rental Property, our flagship course.

— Paula

Source: affordanything.com

Apache is functioning normally


Fewer homes in the U.S. were bought by investors in the first three quarters of last year, according to a Realtor.com report.

Deterred by high prices and mortgage rates, investor purchases fell 32.9% year-to-date in September compared to the previous year. Investor purchases also fell more than overall U.S. sales, which dropped 25% year over year during the same timeframe, according to the report released Wednesday.

Realtor.com analyzed U.S. deed records from January 2000 to September 2023 to determine the number of investor sales vs. purchases nationally and in U.S. metro markets.

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From January to September, investors were behind an average 10.8% of homes sales each month, down from 12% for the same period in 2022 but still higher than pre-pandemic levels. The peak share of investor purchases was 13.1% in February 2022.

“While widespread unaffordability hampered home-buyer activity in 2023, it cut more deeply into investor activity as investors saw less opportunity and their share of home purchases declined from the previous year’s levels,” said Hannah Jones, a Realtor.com research data analyst, in the report. “Despite investor activity falling from 2022 highs, the market remains appealing to investors, who continue to make a higher share of overall purchases than was common before the pandemic.”

Southern metropolitan areas experienced the greatest share of investor activity, at 12.1%, and the biggest year-over-year, at 2.9 percentage points. The Midwest followed, with investors accounting for 10.5% of sales, down 0.9 percentage points. The Northeast was the only region in which, on average, metros saw an increase in investor share of activity (8%, up 0.6 percentage points).

The report also showed that fewer investors presented all-cash offers, as market competitiveness continued to soften. The share of investors who paid in cash in the first three quarters was 60.2%, down from 64.3% during the same time period in 2022.

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As a result, there was a clear shift from large investors toward small investors in real estate investment transactions. The decline in cash offers created a greater opportunity for smaller investors to compete, as they are less likely than larger investors to have access to large amounts of capital. From January to September, 67.6% of investor purchases were by small investors, up from 54.1% during the same time in 2022. In 91 of the top 100 markets, small investors increased their share of investor purchases, following the national trend.

Miami was noted as being the highest-priced market on the list of areas with high investor share. With 5.9% of its listing viewership from overseas during the third quarter this might suggest that international investors are willing to pay more than the average U.S. property investor.

Mansion Global is owned by Dow Jones. Both Dow Jones and realtor.com are owned by News Corp.

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Source: mansionglobal.com