Homebuyers

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Mortgage rates may fall slightly by the end of the year, but don’t expect record lows anytime soon.

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The Federal Reserve has been working to tame inflation for nearly 18 months now, approving 11 hikes to its benchmark interest rate since March 2022. Those moves — along with other economic factors — have pushed mortgage rates up considerably in that time. In fact, since last March, the average rate on 30-year mortgage loans has jumped from under 4% to 7.23% today, according to Freddie Mac. Mortgage interest rates are currently the highest they have been since 2000. 

That’s a far cry from the sub-3% rates the market saw in 2020 and 2021 — and a significant barrier for many hopeful homebuyers.

Fortunately, mortgage rates fluctuate constantly, so they won’t stay that high forever. Just how long could those elevated rates stick around? And when can consumers expect lower rates once again? We asked a few experts for their opinion. 

Explore your mortgage rate options here now to see what you qualify for.

Where are mortgage interest rates headed?

There’s no way to tell for sure, but most experts and industry groups think rates are at or near their peak. As Matt Clarke, chief operating officer of Churchill Mortgage, puts it, “We’re approaching a glass ceiling where rates going too much higher would be detrimental to other critical aspects of the economy.” 

Still, rates being at their peak doesn’t necessarily mean they’ll decrease. For that to happen, inflation would need to slow, investments into mortgage-backed securities would need to increase and the Federal Reserve would need to ease up on its rate hikes.

According to the CME Group’s Fed Watch tool, there’s only about an 18% chance the Fed increases its rate at its upcoming September meeting. For its November meeting, the chances are higher (though that’s still a way out and a lot could change before then). 

“Inflation needs to slow, and unemployment needs to start creeping up,” says Jerry Schiano, CEO at home equity lender Spring EQ. “I think unemployment will start increasing before year-end. Consumers are stressed, and that could lead to less buying and pullback by companies.”

If this happens, the Fed could ease up on its benchmark rate hikes and mortgage rates may decrease as well. 

Explore your mortgage purchase and refinance rate options here to learn more.

When will mortgage interest rates drop?

Realtor.com, Fannie Mae, the National Association of Realtors, and the Mortgage Bankers Association all expect mortgage rates to be slightly lower by the end of the year, with predictions ranging from 6% to 6.7% on average.

That’s a drop — but not anything significant. For reference, a 7.23% rate (today’s average) on a 30-year $400,000 loan comes with about a $2,723 monthly payment. At 6.7%, it falls to $2,581 — just a $142 difference.

“I expect mortgage rates to stay elevated through most of 2024,” says John Paasonen, co-founder and CEO of Maxwell, a mortgage technology provider.

More notable dips in rates are probably much further down the line — possibly by 2025, Clarke says.

“I think significantly lower rates — back to the 5% range — could realistically happen in 2025, with 2024 beginning a slow trend downward,” Clarke says.

Note that he says 5% — not the 2 to 3% rates we saw a few years ago. According to all three experts, those record-low numbers aren’t returning any time soon (and they may never). 

“Let’s just say I’m glad I locked into a 2.6% mortgage rate on my own home,” Paasonen says. “The market will restabilize at a new norm, likely within the next 12 to 18 months. That new norm most certainly will not be below 3% — that was a unique attribute of the amount of economic stimulation following a global pandemic.”

Getting a mortgage in the meantime

Until that new norm is achieved, taking out a mortgage is going to be more expensive than it has been in years past. You also may want to think carefully about selling your home if you’re one of the many who took advantage of those ultra-low mortgage rates.

“Anybody who took record low rates made a great decision,” Schiano says. “They are saving a lot of money each month and should think carefully before refinancing or even selling their house.”

If buying a new home is necessary, though, there are strategies for getting a lower mortgage interest rate. You can buy points, negotiate a temporary buydown, or consider a lower-rate mortgage product, like a 15-year loan or adjustable-rate mortgage. VA loans and USDA loans also tend to have lower rates than other mortgage options (if you can qualify for them). 

Explore your mortgage options here now.

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Source: cbsnews.com

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Nestled in the heart of New England, Massachusetts boasts a rich tapestry of history, evident in its diverse architectural styles, from colonial relics to modern masterpieces. In such an environment, the home inspection process is not merely transactional; it’s an exploration into the layers of time and innovation that define a property. For buyers, it offers a lens into the integrity and character of a potential new home, revealing both its charms and challenges. Sellers, in contrast, can use this process to transparently showcase their property’s value and address any concerns head-on.

So whether you’re buying a home in Concord or selling a house in Boston, this Redfin article has everything you need to know about getting a home inspection in Massachusetts – along with expert insights from local home inspectors themselves. Armed with this knowledge, you’ll be better prepared to navigate the Massachusetts real estate market with confidence.

DenisTangneyJr via Getty Images

Why should you get a home inspection in Massachusetts?

A home inspection in Massachusetts is vital given the state’s vast architectural history and diverse weather conditions. Many homes here, steeped in history, might conceal structural or system-related issues. The state’s varying climate, from snowy winters to humid summers, can also impact homes in subtle ways.

“Massachusetts has the country’s second-oldest home inventory, averaging 54 years, with many homes exceeding 100 years,” says Twin Lights Home Inspection. “Older homes often require essential updates, such as outdated plumbing or electrical systems, damaged structural supports, or inadequate water management. These issues can significantly affect the home’s future needs, going beyond the buyer’s initial plans. A home inspection provides vital information to empower buyers in planning their future with confidence.”

Are there any specialized inspections that Massachusetts buyers should consider?

“In today’s real estate market, where buyers are making offers 10, 20, even 30% above the asking price, it is more important than ever to have a home inspection to protect your investment. In addition to a standard home inspection, there are several optional services buyers should consider. Buyers should consider a sewer scope inspection, radon gas testing, a mold screening, a wood destroying insect inspection, water quality testing for wells, and a pool inspection (in season), if applicable,” recommends Metro Boston Property Inspections.

Are home inspections required in Massachusetts?

“Getting a home inspection in Massachusetts, as in any other state, is a crucial step in the home-buying process,” suggests Blue Owl Home Inspection. “While an inspection is not legally required to purchase a home, here are five compelling reasons why someone should get a home inspection in Massachusetts:

  1. Identify hidden issues: Home inspectors have the expertise to uncover concealed problems like structural issues, electrical faults, plumbing leaks, and mold infestations, providing early detection to prevent costly future repairs.
  2. Negotiation ddvantage: The inspection report serves as a powerful bargaining tool during negotiations with the seller. If significant issues are revealed, you can request repairs or price adjustments, potentially saving you money or ensuring necessary fixes before closing the deal.
  3. Peace of mind: A home inspection offers assurance by revealing the property’s true condition, aiding you in making an informed decision about the purchase. It minimizes the risk of unexpected problems cropping up after you’ve moved in.
  4. Safety assurance: Home inspections focus on safety hazards like faulty wiring, poor ventilation, and fire risks, ensuring your family’s well-being and highlighting areas that need attention.
  5. Future planning: The inspection report becomes a roadmap for future maintenance and enhancements, aiding in prioritizing repairs and upgrades. This information is invaluable for budgeting and long-term planning.”

How much does a home inspection cost in Massachusetts?

The cost of a home inspection in Massachusetts can vary based on factors such as the property’s size, age, and location, as well as the specific services included in the inspection. On average, home inspections in Massachusetts typically range from approximately $400 to $800 or more. 

To obtain an accurate estimate, it’s advisable to request quotes from qualified home inspectors in your area, taking into consideration the unique characteristics of the property you intend to inspect. While the upfront cost may vary, a thorough home inspection is a valuable investment in ensuring the condition and safety of your prospective home, providing peace of mind during the homebuying process.

Can you sell a house in Massachusetts without an inspection?

“One solution is to have a “post sale inspection.” These are sometimes done at a lower cost than Pre-Purchase Inspections as they have a slightly different focus. These inspections should still take over two hours and, if you are the buyer. you should attend the inspection. A Homeowner Inspection can provide the same benefits for homeowners who have not had their home inspected in a number of years.”

Expert advice for Massachusetts buyers before they get a home inspection

“A Home Inspection is your opportunity to ‘check under the hood’ and get to know the property in detail. We examine the house inside and out, and educate you on the building envelope and interiors, structure and systems, operation and maintenance. Waiving the inspection may result in unpleasant and costly surprises later on, suggests Accent Home Inspection, LLC.

“Here’s an important tip,” continues Accent Home Inspection, “Ask the sellers to disclose any problems in writing; they are required to answer truthfully. Browse inspectors’ websites, check qualifications and credentials, read reviews online. A professional and ethical inspector is not there to sell you anything, just to help you understand what you’re buying.”

“A home inspection helps the buyer determine the state of the property before finalizing the purchase. Depending on the age of the property and the materials with which the home was built, your inspector may find some of the following issues.” Five Stars Home Inspection, LLC lists the following:

  • Improper electrical wiring
  • Worn roofing
  • Plumbing deficiencies
  • Inoperable windows
  • Radon gas
  • Mold infestation
  • Insufficient ventilation

“There has been a recent tendency among homebuyers to submit offers that exclude the option of a home inspection,” advises John Rodkey, from JMR Inspections. “The idea behind this is to make an offer more competitive. However, this approach leaves homebuyers unaware of potentially costly issues. The associated risks are so significant that the Massachusetts legislature is currently deliberating on two bills, Senate 197 and House 245, with the title “An Act Protecting Consumer Rights in Purchasing Safe and Habitable Homes.”

“Essentially, these bills aim to preserve the right to have the structure inspected by a home inspector, ensuring that no seller or agent can insist, advise, or require an offer to exclude a home inspection to be considered valid.”

“The number of “pre-purchase home inspections” in Massachusetts have fallen off a cliff.  Obviously, this puts recent home buyers ‘at risk’ of  finding out their home isn’t what they thought it is. Most of the time, their newly purchased homes aren’t disasters, but the buyers simply don’t have a good sense of priorities – or they simply don’t understand what they need to do to maintain the home,” says Evergreen Home Inspection.

Massachusetts home inspection: the bottom line

In the realm of Massachusetts real estate, where history meets modernity and the climate adds its own challenges, home inspections are invaluable. Whether examining centuries-old structures or recent builds, the key lies in understanding a property’s depth beyond its facade. For buyers and sellers in the Bay State, a comprehensive home inspection isn’t just advisable—it’s essential. It ensures informed decisions, transparency, and a successful property transaction.

Source: redfin.com

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It’s all about the vanilla.

The first half of 2008 was dominated by fixed-rate and government-backed mortgages, according to the Mortgage Bankers Association’s Mortgage Originations Survey released today.

Fixed-rate loans (excluding interest-only loans) accounted for 78.5 percent of the dollar volume of first mortgages during the six-month period, up from 63.6 percent in the second half of 2007.

Meanwhile, the share of government-backed loans (FHA loans, VA loans) more than doubled to 11.8 percent of all first half originations, up from 5.7 percent, thanks in part to the increased loan limits.

It’s clear mortgage lenders have continued to tighten guidelines, with 82.7 percent of all origination dollars tied to prime loans, up from 79 percent in the prior reporting period.

Non-prime production accounted for 3.8 percent of loan origination dollars, down from 7.5 percent, while Alt-A saw the worst decline holding just a 1.7 percent share, down from 7.8 percent.

Loans with an interest-only option also fell sharply, found on just 10.6 percent of originations during the first half of 2008, compared to 22.4 percent in the second half of last year.

The refinance share of total originations during the first half of 2008 was 61.7 percent, up from 54.8 percent, though nearly half were for rate and term refis, up about 10 percent from the prior reporting period.

Overall, purchase money mortgage originations were off 16.2 percent compared to the second half of 2007, while refinance originations actually increased 16.3 percent.

First-time homebuyers accounted for 32.2 percent of purchase volume in the first half of the year, up from 30.2 percent in the latter half of 2008.

The MBA survey utilizes data from first and second mortgages on single-family properties.

(photo: stuspivack)

Source: thetruthaboutmortgage.com

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Even with a 6-basis-point drop in the average for the 30-year fixed mortgage, new borrowers are still dealing with rates well above 7%, Freddie Mac said.

The Freddie Mac Primary Mortgage Market Survey reported the 30-year FRM at 7.12% as of Sept. 7, versus 7.18% one week ago and 5.89% for the same period in 2022.

Recent rate movements in reaction to the U.S. economy is a good news-bad news situation.

“The economy remains buoyant, which is encouraging for consumers,” Freddie Mac Chief Economist Sam Khater said in a press release. “Though while inflation has decelerated, firmer economic data have put upward pressure on mortgage rates which, in the face of affordability challenges, are straining potential homebuyers.”

The 15-year FRM also declined versus the prior week, but by only 3 basis points, to 6.52. For the same week last year, the 15-year FRM was at 5.16%.

Rates declined even though in the past week, the benchmark 10-year Treasury shot up from a high of 4.08% on Aug. 31 to 4.28% mid-morning on Sept. 7. A simple explanation for the divergence in movements is that it is being taken account of by the abnormally high spreads between mortgages and Treasurys.

Using the Freddie Mac data, the current 284 basis point spread still has plenty of room to run before retreating to a more upper end range of 200 basis points.

Meanwhile, the 30-year FRM rates as reported through Zillow’s rate tracker do reflect the week-to-week gain in the 10-year Treasury. It rose 19 basis points as of Thursday morning to 7.11% from last week’s average of 6.92%.

Strong growth in the services sector as well as last week’s inflation news caused this rise in rates.

“Prices and economic activity in the service sector — which comprises about three-quarters of overall GDP — increased by more than expected in August, helping to push bond yields and mortgage rates higher,” said Orphe Divounguy, senior macroeconomist at Zillow Home Loans in a Wednesday evening statement.

Meanwhile, the Personal Consumption Expenditures Index, while meeting expectations, still indicated that the move into disinflation was stalling.

“Given constraints on labor supply, rising demand for services has been a concern for the Federal Reserve, and this week’s reports will likely renew concerns that the battle to bring down inflation may not be over,” Divounguy said. “As a result, traders are adjusting to the fact that monetary policy could remain in restrictive territory for much longer.”

While many are expecting the Federal Open Market Committee not to raise short-term rates at its next meeting, sentiment exists supporting future increases.

Source: nationalmortgagenews.com

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A slight cooling in mortgage rates wasn’t enough to keep mortgage applications from sinking to a 28-year low.

Freddie Mac‘s Primary Mortgage Market Survey, which focuses on conventional and conforming loans with a 20% down payment, shows the 30-year fixed rate averaged 7.12% as of Sept. 7, down from last week’s 7.18%. By contrast, the 30-year fixed-rate mortgage was at 5.89% a year ago at this time.

“The economy remains buoyant, which is encouraging for consumers,” said Sam Khater, Freddie Mac’s chief economist. “Though while inflation has decelerated, firmer economic data have put upward pressure on mortgage rates which, in the face of affordability challenges, are straining potential homebuyers.”

Other indices showed higher mortgage rates this week.

HousingWire’s Mortgage Rates Center showed Optimal Blue’s 30-year fixed rate for conventional loans at 7.20% on Wednesday, compared to 7.07% the previous week. At Mortgage News Daily on Wednesday, the 30-year fixed rate for conventional loans was 7.33%, up from 7.06% the previous week.

Rates should continue to come down from their peaks, as the inflation and the jobs market are cooling, said Bright MLS Chief Economist Lisa Sturtevant.

However, high home prices and growing affordability challenges are the two factors weighing on prospective home buyers, said Sturtevant. She expects a market contraction this fall in the housing sector. 

MBA President and CEO Bob Broeksmit is of the same opinion:

“The housing market appears to be stuck heading into autumn, with sales activity likely to stay stagnant until housing inventory increases and mortgage rates decline to more affordable levels,” he said in a statement. 

In many markets, renting has become more affordable than owning

The balance between renting and owning in many markets has shifted toward renting as more new apartment construction comes online, noted Sturtevant. Moreover, declining rent prices will likely help move inflation back toward its target in the months ahead, added Realtor.com Chief Economist Danielle Hale.

“Looking ahead, the economy is nearing an inflection point, and mortgage rate volatility may continue until it is clear that the economic landing has actually occurred and we are not seeing a touch-and-go on growth that could reignite inflation,” said Hale.

Source: housingwire.com

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A cash-out refinancing loan is treated differently by the IRS than a traditional mortgage. Although you receive a lump sum of cash, cash-out refinancing is considered a form of debt restructuring, and you do not pay taxes on the cash you receive.

With cash-out refinancing, you cash out a percentage of the equity that you have accrued in your home and replace your existing mortgage with one with a higher principal. You can use the cash for any reason, such as consolidating debt, paying for home renovations, or unexpected medical expenses.

Here’s what you should know about cash-out refinancing and the tax implications.

How Cash-Out Refinancing Works

When you refinance your mortgage, you cash out equity. Equity is the difference between your current mortgage balance and the value of your home today. Let’s say your home is worth $300,000 and the balance on your mortgage is $150,000, you have $150,000 in home equity.

A lender typically requires you to keep at least 20% of the value of your home in equity. In the above case, you would leave $60,000 in equity and have $90,000 to cash out. Your mortgage lender would also charge around 1% in closing costs.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

The Tax Implications of Mortgage Refinancing

A cash-out refinancing loan is treated differently by the IRS than a traditional home loan because it is considered a form of debt restructuring. You do not pay tax on the money you receive in cash, and you might also be able to deduct some of the interest you pay on that cash from your taxes.

Here’s a closer look at the tax implications of a cash-out refinancing loan.

Is a Cash-Out Refinance Taxable?

Because the IRS considers a cash-out refinance to be a form of debt restructuring, the cash you receive is considered a loan, not income, and is not taxed. In addition, you could receive additional tax benefits depending on how you spend the money you receive.

If you use the cash to increase the value of your home, such as putting on a new addition or replacing your heating or cooling system, you can claim the interest that you pay on the loan as a tax deduction.

Before you do this, however, consult a tax professional to make sure that the work qualifies. Simple repairs like painting or general maintenance do not qualify for tax deductions. You will also have to keep meticulous records and save receipts documenting what you spend so that you can prove your case when you file your taxes.

Requirements for Interest Deductions on a Cash-Out Refinance

Capital improvements to a property that increase its value will qualify for an interest deduction. Examples could include a new addition, a security system, or a new swimming pool. General maintenance and repairs will not qualify, nor can you deduct the interest you pay on the loan if you spend the money on a vacation, medical bills, or credit card debt.

How to Make a Cash-Out Refinance Tax-Deductible

Below is a list of home improvements that qualify for the interest deduction.

Qualifying Home Improvements

•   Renovating or adding on an addition, such as a garage or a bedroom

•   Putting in a swimming pool

•   New fencing

•   New roof

•   New heating or cooling system

•   Installing efficient windows

•   Installing a home security system

Improving your property’s value means you can also save money if you sell your home. Capital home improvements count toward the total amount you spent on the property and can potentially lessen your capital gains tax liability when you sell your home.

Deductions for Adding a Home Office

Adding a home office to your home is a capital improvement that qualifies for the interest deduction on a cash-out refinancing loan. There are also additional potential tax benefits to adding a home office for small businesses or the self-employed.

How Home Offices Can Impact Your Taxes

You can deduct the interest on your cash-out refinancing loan if you use the money to add a home office, because it will increase the value of your home and is considered a capital improvement. If you are a business owner or self-employed, you could also qualify for the home office deduction on your federal taxes.

The home office deduction is a benefit that allows you to claim a percentage of what you pay on your loan as a business expense. You must use the designated office space for business purposes only, and it cannot be used as a spare bedroom or family space or it will not qualify. Also, your home office must be the primary place where you conduct business.

Recommended: What to Know Before You Deduct Your Home Office

Tax Implications of a Cash-Out Refinance for Rental Property

Rental income is considered personal income by the IRS. If you use the capital from a cash-out refinance to improve or repair a rental property, the expenses are tax-deductible. Also, interest, closing costs, and insurance paid on a rental property can be deducted from your income as business expenses.

What Are the Limitations for Interest Deduction with a Cash-Out Refinance?

For the 2022 tax year, single filers and married couples filing jointly could deduct mortgage interest up to $750,000. Married taxpayers who file separately could deduct up to $375,000 each. (The limit is higher for debts incurred prior to December 16, 2017: $1 million or $500,000 each for married couples filing separately.)

Can You Deduct Your Mortgage Points?

Mortgage points, also known as discount points, are fees you pay a lender upfront so that you can pay a lower interest rate on your loan. One point is equal to 1% of your mortgage loan. With a cash-out refinance, you cannot deduct the money you paid for points in the year you refinanced until after 2025. But you can spread out the cost throughout the loan. That means if you accumulate $2,500 worth of mortgage points on a 15-year refinance, you can deduct around $166 per year throughout the loan.

Risks of a Cash-Out Refinance

Cash-out refinancing is a risk. You are taking on a larger loan than your original home mortgage, which means that your monthly mortgage payment will increase unless interest rates are lower than when you applied for your current mortgage. If your payments are higher and you can’t keep up with them, you could be at greater risk of foreclosure.

Alternatives to a Cash-Out Refinance

Two financing alternatives that also use equity in your home are a home equity loan or a home equity line of credit (HELOC).

A home equity loan is a second mortgage for a fixed amount that you repay over a set period while keeping your original loan. The payments include interest and principal, just like a traditional mortgage, but the interest rate may be higher than a primary mortgage. This is because the primary lender is paid first in the event of foreclosure, so the secondary lender takes on more risk.

A home equity line of credit (HELOC) is also a second mortgage but with a revolving balance. That means you can borrow a certain amount, pay it back, and then borrow again. As with a credit card, your payments are based on how much you use from the line of credit, not on the available credit amount. If you don’t need to borrow a large sum, this might be a cheaper option than cash-out refinancing because a HELOC tends to have a lower interest rate.

Recommended: Home Equity Loans vs HELOCs vs Home Improvement Loans

The Takeaway

Cash-out refinancing is a way to access the equity in your home and use it to pay for expenses, though it does mean taking on increased debt. The cash from this type of mortgage refinancing can be used any way you like, such as to pay for home renovations, college, or unexpected medical expenses.

When you opt for cash-out refinancing, your original mortgage is replaced by a larger mortgage. If interest rates are lower than when you took out your original mortgage, your monthly payments may go down, but it will take you longer to pay off the loan. Depending on how much cash you need, you can also consider a HELOC or a home equity loan to obtain the money you need.

Turn your home equity into cash with a cash-out refi. Pay down high-interest debt, or increase your home’s value with a remodel. Get your rate in a matter of minutes, without affecting your credit score.*

Our Mortgage Loan Officers are ready to guide you through the cash-out refinance process step by step.

FAQ

Is cash-out refinance tax-deductible?

Some of the interest you pay on a cash-out refinancing loan might be tax deductible if you use the money to make capital improvements on your home and you keep meticulous documentation to prove it. It’s best to consult with a tax professional to make sure the improvements you do on your home qualify for the deduction.

Do you pay taxes on a cash-out refinance?

No. The funds you receive from cash-out refinancing are not subject to tax because the IRS considers refinancing a form of debt restructuring, and the money isn’t categorized as income.

How do I report a cash-out refinance on my tax return?

You don’t need to report the cash you receive from a cash-out refi as income, so the refi would only show up if you record the interest you are paying on the new mortgage on an itemized return.

What are the tax implications of a cash-out refinance on a rental property?

Rental income is taxed as personal income by the IRS. The good news is that if cash from a refinancing is used to improve or repair a rental property, the expenses are tax-deductible. Also, closing costs, interest, and insurance paid on a rental property may also be deductible from your income as business expenses.

How does the timing of a cash-out refinance affect my taxes?

As long as you meet the requirements for capital improvements, you can deduct the interest paid on your refinanced loan every year that you make payments throughout the life of your refinance loan. So, if you refinance your mortgage to a 15-year term, you must spread your deductions over the 15 years. However, you can only deduct the interest you pay each year, and the amount of interest paid will become less as the loan matures and you pay more toward the principal.

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Source: sofi.com

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In the face of spiking interest rates and historically high home prices, $3,000 monthly mortgage payments are common in today’s housing market.

According to Black Knight’s mortgage monitor report, the average principal and interest payment among borrowers purchasing a home using a 30-year fixed-rate loan hit its highest point ever in July at $2,306. That’s before taxes and insurance are factored in (an average of $550 a month). It’s up 60% over the past two years. 

“Just two years ago, only 18% of homebuyers were facing that level of payment; as of the end of July that share had grown to 51%,” remarked Black Knight Vice President of enterprise research Andy Walden.

“Beyond that, nearly one in four July homebuyers has payments north of $3,000, up from just 5% in 2021. We’ve been talking about affordability for quite some time now, but this puts the situation in stark relief,” he added.

Beyond purchase affordability, rising interest rates prevent mortgage holders to tab into their home equity

In the second quarter of 2023, mortgage holders tapped $39B in equity through cash-out refis as well as home equity loans and lines of credit. It was up modestly from the first quarter of 2023 but just half the volume of the first quarter in 2022 ($79B), before rates began to rise.

Between 2010 and 2021, mortgage holders withdrew an average 0.92% of available tappable equity each quarter. That share fell to just 0.4% over the past three quarters, researchers found. Overall, it resulted in a roughly 55% decline in equity withdrawals

In other words, since rates began to climb in early 2022, nearly $200 billion in equity that might have otherwise been withdrawn and injected into the broader economy has remained untapped, according to Black Knight. 

Tappable equity levels remain elevated, Walden noted.

HELOC rates have risen along with Fed rate hikes, with the average HELOC offering now above 8.5% for the first time in the 15+ years Black Knight has been tracking that data.

Source: housingwire.com

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Buying and selling a home can be a confusing, intimidating process. From fine-tuning the initial listing to completing the mountains of paperwork needed for closing, homebuyers and sellers can find themselves juggling a wide range of issues. Real estate professionals can help by hosting educational workshops to help make the transaction easier. Here are 11 tips to make these workshops more effective.

1. Find your audience

Not every real estate transaction is the same because not all buyers and sellers are the same. Before you plan your workshop, consider who your target clients are. Do you specialize in helping first-time buyers and sellers, or are you leaning towards working with real estate investors? Maybe you are focusing on empty nesters looking to downsize or clients looking for vacation homes they want to rent out in the off-season.

Your audience will determine the focus of your workshop. It’s the first step to making your workshop a success, and also influences how you will market your event (more on that below).

2. Organize relevant topics

Your audience determines the topics you cover. Veteran investors don’t need a lecture on what to bring to the closing table, but first-time buyers do. First-time home sellers might be interested in learning how to prep their homes for sale, while rookie buyers might want a step-by-step outline of the entire process.

Start planning your event by making a list of the subjects that might be confusing or complicated, and plan your workshop itinerary from there. 

3. Choose a venue

Don’t plan to fail by failing to plan, especially when it comes to things like parking, accessibility, and capacity. The venue you select needs to be comfortable and accommodating for everyone. Consider things such as:

  • Parking (number of spaces and accessibility for those in wheelchairs)
  • Seating at the venue (tables, chairs, etc.)
  • Location (central to public transportation)

Some good workshop venue options include community centers, public libraries, and hotel conference rooms. If you’re hoping to reach clients who are relocating from out of state, consider hosting workshops online.

4. Market your event

You can plan a perfect event, but if your marketing strategy isn’t comprehensive, how will people know about it? Again, how you market will depend on your audience. Social media marketing is a great way to spread the word and can be coordinated so one post hits multiple platforms at a time.

Other ways to reach a wider audience include:

  • Posting on community bulletin boards (in physical locations or online)
  • Sending a note to your mailing list
  • Asking former clients to spread the word

Another way to market is to ask influencers on social media to help promote the event. They may also be able to attend the event, bringing their audience with them.

5. Provide take-home resources

Real estate transactions can be complicated, and some attendees may be overwhelmed by the amount of information you present. Help them better understand and retain information by providing resources they can take home. 

These handouts can include:

  • Checklists for the buying and selling process
  • Definitions of real estate terminology
  • Outlines of how to prepare a home to sell
  • A basic step-by-step guide to buying a home
  • Lists of related real estate professionals (i.e., mortgage lenders, home inspectors, etc.)

Very few people can attend an hour-long lecture and remember everything they heard. For best results, present information in many different ways. Use short videos, slideshows, and small-group discussions and activities to deepen their understanding of the topic.

7. Highlight guest speakers

Guest speakers provide two primary benefits to your workshop. They bring specialized expertise. Real estate transactions involve a variety of professionals, each experts in their field. Inviting these experts to speak is a great way to help workshop attendees better understand each step of the process. For example, a mortgage lender can describe different types of mortgages and explain which might be best for the buyer or the type of transaction. Guest speakers can also offer a neutral third-party perspective on sensitive topics, like how to save money at closing.

They cross-promote the event. Guest speakers will promote the event on their social media platforms. This increases your potential audience and introduces you to more people you might not otherwise reach.

8. Make it interactive

Very few people enjoy sitting in a chair for hours being lectured to. Give participants a chance to engage with speakers and other attendees. You can do this by facilitating small group discussions, encouraging questions, and organizing breakout sessions on specific topics of interest.

9. Ask for feedback

Getting a real estate workshop right the first time is hard, so asking participants for feedback is key. This helps refine planning for future events and helps build relationships with attendees. Additionally, positive feedback can be used (with permission) as testimonials to promote future workshops.

10. Follow up with participants

Asking for feedback is just the first level of follow-up after the workshop. Send out thank-you notes or emails the day after the workshop. On day three post-workshop, reach out again with an invitation to engage. This might look like:

  • Asking attendees if they have other questions
  • Providing additional resources
  • Sending listings based on interest
  • Offering incentives for continued collaboration

This is not the time for a hard sell, but following up with attendees is an opportunity to develop positive relationships that might lead to more business opportunities in the future.

11. Keep the most important thing the most important thing

Homeownership remains a crucial part of what is commonly referred to as the American Dream. The primary goal of these workshops is to educate people on how they can be involved in the pursuit of homeownership. For homeowners looking to sell, your workshop can be critical in their path to building generational wealth.

The most important thing? Educating attendees and demonstrating your knowledge, professionalism, and trustworthiness. By doing this, you position yourself as a valuable resource in your community who genuinely cares about their clients and wants the best for them. Ultimately, that will build a solid foundation for professional relationships that continue to grow as your clients’ needs evolve.

Luke Babich is the co-founder of Clever Real Estate.

Source: housingwire.com

Apache is functioning normally

Colorado Springs-area home sales fell again last month and prices remained flat as the local housing market continued to feel the effects of spiking mortgage rates.

According to a new Pikes Peak Association of Realtors market trends report that examined home sales last month that took place mostly in the Springs and surrounding El Paso County:

• Single-family home sales totaled 1,067 in August, a nearly 22% decline from the same month last year and the 15th consecutive month that local sales have fallen on a year-over-year basis.

• Homes spent an average of 29 days on the market in August before they sold, an increase from 17 days during the same month last year.

• The median price, or midpoint, of homes that sold in August was $480,000, a 0.1% drop from $480,592 in August 2022. Home prices had increased each month from December 2014 to November 2022, but began to slide late last year and now have declined on a year-over-year basis in eight out of the last nine months.  

• The supply of homes listed for sale totaled 2,420 in August, down 8.3% from the same month last year. On the one hand, August’s listings were the most for any month since November, yet they remained far below pre-Great Recession years, when August inventories often topped 3,000 and 4,000.

The Springs-area housing market, like that of many other cities, has done an about-face since the second half of last year because of higher long-term mortgage rates.

For years, historically low rates in the neighborhood of 3% for a 30-year, fixed-rate loan helped spur a furious demand for single-family homes. That demand, coupled with a shortage of properties for sale, sent Springs-area median home prices soaring over several years; in June 2022, they hit a record high of $495,000.

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After the Federal Reserve began to hike interest rates last year to tamp down surging inflation, mortgage rates rose, too, and roughly doubled to more than 6% for 30-year loans by the end of last year.

That trend of high rates continued through the first several months of this year. In mid-August, long-term mortgages topped 7%; last week, the national average for a 30-year, fixed rate mortgage was 7.18%, according to mortgage buyer Freddie Mac.

Higher rates have priced many homebuyers out of the market and sent sales plunging.

Local real estate agents, however, have said that the demand for homes remains relatively strong. As a result, and combined with tight inventories, prices haven’t plunged, though they are down from their record highs.   

The new home side of the Springs-area housing market also has felt the effects of higher mortgage rates.  

In August, 127 permits were issued for the construction of single-family, detached homes, according to a new Pikes Peak Regional Building Department report. August’s tally was up 15.5% compared with the same month last year.

But the pace of home construction through the first eight months of this year remains well behind the same period in 2022, Regional Building Department figures show. Through August of this year, single-family detached permits totaled 1,655, down 36.4% from 2,604 on a year-over-year basis.

Source: gazette.com