It is safe to say that purchasing a home is quite possibly the single largest investment most consumers will make during their lifetime. So, it is natural for them to be a bit cautious, ensuring they understand all the market nuances before making an offer on a home.
Unfortunately, that is not always the case. Some buyers purchase on impulse without checking the current market conditions, often times costing themselves money or purchasing the wrong property in the process.
When you are ready to start looking for a new house (after getting pre-approved and choosing an agent to represent you), it is a smart idea to do your due diligence to determine if the local market favors buyers or sellers.
Buying a home during a seller’s market is not ideal but it is still possible to get a great deal if you know what you are looking for and have patience in the process.
As a reminder, a seller’s market is one where there is 5 months (or less) of available inventory for consumers to choose from. Obviously, the less homes available, the fewer options both buyers and investors have. It can also mean a lot more competition for the existing properties as there are less homes to pick from. It is simple supply and demand!
In this guide, we will explore some of the strategies buyers should employ and provide essential tips on how to find the right home in a seller’s market.
Get Ready To Buy
The easiest way to lose out on the home of your dreams is to not be adequately prepared to purchase a home when you start actively looking for a property. You can avoid that concern by getting your finances in order quickly.
Start talking with a mortgage broker, lender, or financial institution before you hit the pavement to go look at homes. Getting a loan pre-approval will show you your loan ceiling (how high of a mortgage you qualify for) and will also tell sellers that you are serious about buying a house.
Once you have your pre-approval, your agent should be able to provide a list (many are automated) of all the properties that meet your search criteria.
In many instances, they can provide a drill-down to a specific home style, price point, particular amenity (i.e. pool, 3-car garage, acreage, etc.), school district, and a host of other key features that may be important to you.
The more specific your list is, the less time you will waste looking at properties you have no interest in, and the faster you will be able to check out the houses on your short list that interest you the most.
View Homes As Quickly As Possible
When there is a high demand for homes, do not be the buyer who waits until the weekend to view those properties. The faster you can see the home, the better chance you have of getting it contracted.
If you wait, others may are also interested in it and the property may already be off the market by the time you get around to seeing it.
As always, ensure you have an agent that represents you assist with all your real estate needs, including getting educated on anything you do not completely understand or need more clarification about.
When you can, have your agent schedule a visit as soon as the home is available for showings. This is especially important, critical even, for houses where the viewing times are limited.
Getting in quickly for a preview could be the difference between writing an offer on the house and continuing your search because another buyer beat you to it.
Eliminate Buyer Drama
When there are more buyers than homes to choose from some consumers can become overly aggressive. It is understandable that low inventory makes for a more competitive marketplace but you need to do everything in your power to steer clear of conditions that drive bad behavior and poor decision-making.
With the potential for bidding wars, above list price offers, cash proposals, and no/low home contingencies, you can easily get caught in a minefield without a solid exit strategy.
For instance, the vast majority of buyers will be looking for a good deal that includes a decent location and a home that is in reasonably good shape. The competition to see these homes can cause some buyers to act rashly when the same homes are being previewed and viewing overlap is occurring.
To the best of your ability, remove yourself from any situation where an altercation may occur, and you will minimize the risk of making a hasty decision to “beat the competition”.
Avoid Overpaying
Home prices often go up slightly during a seller’s market because the supply of homes is limited.
Whenever possible, buyers need to remove as much emotion as possible from their purchasing decision to ensure they do not get into a bidding war or rationalize why it is a good idea to pay beyond what the home is worth, especially if that amount is over the appraised value.
Remember, overpaying today could backfire as the market could become a buyer’s market by the time you get ready to sell.
This is why it is critical to have a buyers agency agreement to work with a real estate agent who understands the local market. Your agent can advise you on the price and provide other relevant information about the community as a whole.
They can also provide tips and information about similar homes in the area that have recently sold or are up for sale.
Once you find a home you want, do not rush into making an offer, even at the risk of losing the home to buyers who are willing to make a quicker decision. Re-look all the numbers and have patience through the process.
You may find you will get the home you want at a price you are comfortable with. When ready, always make a strong offer that will pique seller interest and perhaps get the home before others have an opportunity to bid.
Do Not Ask For Special Treatment
When there is minimal inventory, it is not always a good idea to put too many demands on sellers. This is especially true if the home is getting a lot of activity.
When the market is calm, it is normal for buyers to ask for various appliances like washers and dryers, refrigerators, lawn mowers, etc. as a sort of “freebie” with the home purchase.
You should not apply the same principle in a seller’s market because the odds are stacked in the seller’s favor. If there is more than one offer, you can bet the sellers will take the one with conditions that are most favorable to them.
Often times that is the offer without stipulations so keep that in mind when considering what to ask for as a condition of purchasing the property.
Negotiate In Good Faith
Savvy home buyers will attempt to negotiate for a lower price and favorable conditions any chance they get. You can expect sellers to use their leverage to get the most money for the home they can while giving up fewer concessions.
Being able to bridge the gap and find common ground will help the negotiation process go much more smoothly.
Some of the ways you can accomplish this are to avoid haggling over inconsequential items, determining if the items on your must-have list are really worth potentially losing the home over, ensuring you make a fair offer upfront (fair does not always mean your best offer, but a low-ball offer will typically get you nowhere, especially in a fast paced sellers market), and learning to compromise on issues that appear to be slowing down progress (i.e. closing costs, high cost maintenance/upgrade items, and closing dates).
Buying In A Sellers Market Parting Shots
Buying in a seller’s market is not an ideal situation. However, there are still plenty of opportunities to make it through the home purchase process without much fanfare and still buy the home of your dreams!
If you have a little patience, avoid being bullheaded, and keep your wits about you, the chances of getting conditions and a price favorable to you go up dramatically.
By following the tips provided above you will give yourself every opportunity to turn the home buying experience into a positive one that nets you exactly the type of property you are seeking.
Respect and adhere to the advice your buyers agent provides, while staying within your financial means, and the process of buying a home in a sellers market becomes much less daunting to navigate. Happy house hunting!
As the new week begins, mortgage rates are almost perfectly in line with those seen on Friday afternoon. Putting that in context, last Thursday and Friday marked the highest rates in weeks although Friday was quite a bit better. In both cases and again today, the average lender is just over 7% for a top tier conventional 30yr fixed scenario.
Last Thursday’s drama stemmed from strong economic data. That sort of data is a key consideration for rate movement in general, but especially right now. The Fed is scrutinizing data to determine whether it’s time to hold rates steady after hiking at the fastest pace since the early 80s.
While the Fed Funds Rate doesn’t dictate mortgage rates, the expectations for future movement in the Fed Funds Rate is much more correlated. Even then, the general notion of “friendly vs unfriendly” Fed policy tends to align with “down vs up” for interest rates. Bottom line: weak data = friendly Fed. Strong data = unfriendly Fed.
With all that in mind, we have some of the month’s most important economic data coming up this week, culminating in Friday’s big jobs report–typically considered to be the most important report for bonds/rates.
The share of refinances in mortgage origination volume dipped below 50% for the first time in 15 months in March, according to Black Knight‘s new monthly data report, the Originations Market Monitor. With interest rates continuing to tick up, the purchase mortgage market is where most lenders will focus operations over the next year.
Since December 2019, millions of homeowners have been able to save hundreds of dollars a month in mortgage payments by refinancing to record-low mortgage rates, often in the 2% range. Thanks to the Fed’s intervention to lower the cost of borrowing, many homeowners shaved 125 basis points or more on their mortgages over the past year. That was a boon for mortgage lenders, the vast majority of which rode the refi wave to historic origination volume and record profits in 2020.
But the strengthening U.S. economy and acceleration of COVID-19 vaccines has pushed interest rates back up dramatically over the last quarter. By mid-January, mortgage rates began to rebound from historic lows, and by the end of March, Black Knight estimated the average 30-year mortgage rate sat near 3.34%. That was up 60 basis points from February, though still down 20 basis points from the same time last year.
In March, the share of refinancings fell to 48%, forcing many lenders to quickly pivot away from refis and toward the purchase market.
“Recent – and sharp – upward movements in interest rates have shifted the mortgage originations landscape very quickly,” said Scott Happ, Black Knight’s president of secondary marketing technologies. “The wave of refinance activity of the last year and some months has suddenly given way to a purchase-heavy mix. The implications of this shift touch nearly every area of mortgage lending, which in turn has implications for the wider economy.”
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Despite refi activity in freefall, overall rate lock volume was up 2.5% in March, with purchase locks jumping 32% from February. Cash-out refinance locks also rose 4% month-over-month.
The three metropolitan areas with the greatest percentage of lock volume was the Los Angeles-Long Beach-Anaheim metro, New York-Newark-New Jersey metro and the Washington-Arlington-Alexandria metro. In the NY-NJ-PA metro in particular, rate lock data was up 11.7% month-over-month, and refis still took more than half of the origination volume.
But the top 20 metros were neck-and-neck for whether purchases or refis made up more of the lending pie.
“This marks the first time – but almost certainly not the last – that purchase loans have made up a majority share of monthly mortgage lending since December 2019,” said Happ. “We also saw credit scores pull back, a trend that’s likely to continue among refis as high-credit borrowers, who have been largely driving record volumes, exit the market.”
If these homeowners do slowly exit the market, credit availability will continue to open up for borrowers with lower credit scores and options for higher LTV products. Zillow‘s senior economist Jeff Tucker estimates this next wave of buyers will be millennials.
“More affordable, medium-sized metro areas across the Sun Belt saw significantly more people coming than going – especially from more expensive, larger cities farther north and on the coasts,” said Tucker. “The pandemic has catalyzed purchases by millennial first-time buyers, many of whom can now work from anywhere.”
On average, Black Knight estimated a typical credit score for a conforming loan was around 751 in March, six points lower than a year ago. On the other hand, credit scores averaged close to 666 for FHA loans, around four points higher year-over-year. According to the report, Black Knight said it’s seen year-to-date increases in the share of FHA and non-conforming originations, while conforming volumes – though still representing the lion’s share of March lending – are down.
The Jefferson Avenue commercial district in Buffalo, New York, is anchored by a supermarket.
There are dozens of other businesses and services along the 12-block corridor — a couple of bank branches, a library, a coffee shop, gas stations, a small plaza with a dollar store and a primary care clinic and a business incubator for entrepreneurs of color.
But Tops Friendly Markets, the only grocery store on Buffalo’s vast East Side, is the center of activity. More than just a place to buy food, pick up medications and use an ATM, the store is a communal gathering space in a predominantly Black neighborhood that, for generations, has been segregated, isolated and disenfranchised from the wealthier — and whiter — parts of the city.
Which explains how it came to be the site of a mass shooting on a spring day in May of last year. On that Saturday, a gunman, who lived 200 miles away in another part of the state, drove to Jefferson Avenue and went into Tops, and in just a few minutes killed 10 people, injured three and inflicted mass trauma across the community.
It is a scenario that has sadly, and repeatedly, played out in other parts of the country that have experienced mass shootings. But this one came with a twist: The gunman’s intention was to kill as many Black people as possible.
To achieve that, he specifically targeted a ZIP code with one of the highest percentages of Black residents in New York state. All 10 who died that day were Black.
“The mere fact that someone can research, ‘Where will the greatest number of Black people be … on a Saturday morning,’ that’s not by chance,” said Franchelle Parker, a community organizer and executive director of Open Buffalo, a nonprofit focused on racial, economic and ecological justice. “That’s not a mistake. It’s a community that’s been deeply segregated for decades.”
The day of the shooting, Parker, who grew up in nearby Niagara Falls, was driving to Tops, where she planned to buy a donut and an unsweetened iced tea before heading into the Open Buffalo office, which is located a block away from Tops. The mother of two had intended to complete the mundane task of cleaning up her desk — “old coffee cups and stuff” — after a busy week.
She saw the news on Twitter and didn’t know if she should keep driving to Jefferson Avenue or turn around and go back home. She eventually picked the latter.
When she showed up the next day, there were thousands of people grieving in the streets. “The only way that I could explain my feeling, it was almost like watching an old war movie when a bomb had gone off and someone’s in, like, shell shock. That’s how it felt,” said Parker, vividly recounting the community’s collective trauma in a meeting room tucked inside of Open Buffalo’s second-story office on Jefferson Avenue.
Almost immediately following the May 14, 2022, massacre, which was the second-deadliest mass shooting in the United States last year, conversations locally and nationally turned to the harsh realities of the East Side and how long-standing factors that affect the daily life of residents — racism, poverty and inequity — made the community an ideal target for a white supremacist.
Now, more than a year after the tragedy, there is growing concern that not enough is being done fast enough to begin to dismantle those factors. And amid those conversations, there are mounting calls for the banking industry — whose historical policies and practices helped cement the racial segregation and disinvestment that ultimately shaped the East Side — to leverage its collective power and influence to band together in an effort to create systemic change.
The ideas about how banks should support the East Side and better embed themselves in the neighborhood vary by people and organizations. But the basic argument is the same: Banks, in their role as financiers and because of the industry’s history of lending discrimination, are obligated to bring forth economic prosperity in disinvested communities like the East Side.
I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.
Chiwuike Owunwanne, corporate responsibility officer at KeyBank
“Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that,” said The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity, a four-year-old enterprise focused on racial, geographic and economic health disparities. “But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.”
To be sure, banks’ ability to reverse the course of the community isn’t guaranteed — and there is no formula to determine how much accountability they should hold to fix deeply entrenched problems like racism. Several Buffalo-area bankers said that while the Tops shooting heightened the urgency to help the East Side, the industry itself cannot be the sole driver of change.
“There are a lot of institutions … that can certainly play a part in reversing the challenges that we see today,” said Chiwuike “Chi-Chi” Owunwanne, a corporate responsibility officer at KeyBank, the second-largest bank by deposits in Buffalo. “I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.”
A long history of segregation
How the East Side — and the Tops store on Jefferson Avenue — became the destination for a racially motivated mass murderer is a story about racism, segregation and disinvestment.
Even as it bears the nickname “the city of good neighbors,” Buffalo has long been one of the most racially segregated cities in the United States. Of the 114,965 residents who live on the East Side, 59% are Black, according to data from the 2021 U.S. Census American Community Survey. The percentage is even higher in the 14208 ZIP code, where the Tops store is located. In that ZIP code, among 11,029 total residents, nearly 76% are Black, the census data shows.
The city’s path toward racial segregation started in the early 20th century when a small number of job-seeking Black Americans migrated north to Buffalo, a former steel and auto manufacturing hub at the far northwestern end of New York state. Initially, they moved into the same neighborhoods as many of the city’s poorer immigrants and lived just east of what is today the city’s downtown district. As the number of Blacks arriving in Buffalo swelled in the 1940s, they were increasingly confronted with various housing challenges, including racist zoning laws and restrictive deed covenants that kept them from buying homes in more affluent white areas.
Black Buffalonians also faced housing discrimination in the form of redlining, the practice of restricting the flow of capital into minority communities. In 1933, as the Great Depression roiled the economy, a temporary federal agency known as the Home Owners’ Loan Corporation used government bonds to buy out and refinance mortgages of properties that were facing or already in foreclosure. The point was to try to stabilize the nation’s real estate market.
As part of its program, HOLC created maps of American cities, including Buffalo, that used a color coding scheme — green, blue, yellow and red — to convey the perceived riskiness of making loans in certain neighborhoods. Green was considered minimally risky; other areas that were largely populated by immigrant, Black or Latino residents were labeled red and thus determined to be “hazardous.”
“The goal was to free up mortgage capital by going to cities and giving banks a way to unload mortgages, so they could turn around and make more mortgage loans,” said Jason Richardson, senior director of research at the National Community Reinvestment Coalition, an association of more than 750 community-based organizations that advocates for fair lending. “It was kind of a radical concept and it has evolved over the decades into our modern mortgage finance system.”
The Federal Housing Administration, which was established as a permanent agency in 1934, used similar methods to map urban areas and labeled neighborhoods from “A” to “D,” with “A” considered to be the most financially stable and “D” considered the least. Neighborhoods that were largely Black, even relatively stable ones, were put in the “D” category.
The result was that banks, which wanted to be able to sell mortgage loans to the FHA, were largely dissuaded from making loans in “risky” areas. And Buffalo’s East Side, where the majority of Blacks were settling, was deemed risky. Unable to get loans, Blacks couldn’t buy homes, start businesses or build equity. At the same time, large industrial factories on the East Side were closing or moving away, limiting job opportunities and contributing to rising poverty levels.
“Today what we’re left with is the residue of this process where we’ve enshrined … a pattern of economic segregation that favors neighborhoods that had fewer Black people in them and generally ignores neighborhoods that had African Americans living in them,” Richardson said.
Case in point: Research by the National Community Reinvestment Coalition shows that three-quarters of neighborhoods that were once redlined are low- to moderate-income neighborhoods today, and two-thirds of them are majority minority communities.
Adding to the division between Blacks and whites in Buffalo was the construction of a highway called the Kensington Expressway. Built during the 1960s, the below-grade, limited-access highway proved to be a speedy way for suburban workers to get to their downtown jobs. But its construction cut off the already-segregated East Side even more from other parts of the city, displacing residents, devaluing houses and destroying neighborhoods and small businesses.
As a result of those factors and more, many Black residents have become “trapped” on the East Side, according to Dr. Henry Louis Taylor Jr., a professor of urban and regional planning at the University at Buffalo. In 1987, Taylor founded the UB Center for Urban Studies, a research, neighborhood planning and community development institute that works on eliminating inequality in cities and metropolitan regions. In September 2021, eight months before the Tops shooting, the Center for Urban Studies published a report that compared the state of Black Buffalo in 1990 to present-day conditions. The conclusion: Nothing had changed for Blacks over 31 years.
As of 2019, the Black unemployment rate was 11%, the average household income was $42,000 and about 35% of Blacks had incomes that fell below the poverty line, the report said. It also noted that just 32% of Blacks own their homes and that most Blacks in the area live on the East Side.
“Those figures remain virtually unchanged while the actual, physical conditions that existed inside of the community worsened,” Taylor told American Banker in an interview in his sun-filled office at the center, located on the University at Buffalo’s city campus. “When we looked upstream to see what was causing it, it was clear: It was systemic, structural racism.”
Banks’ moral obligations
As the East Side struggled over the decades with rampant poverty, dilapidated housing, vacant lots and disintegrating infrastructure, banks kept a physical presence in the community, albeit a shrinking one. In mid-2000, there were at least 20 bank branches scattered across the East Side, but by mid-2022, the number had fallen to around 14, according to the Federal Deposit Insurance Corp.’s deposit market share data. The 14 include four new branches that have opened since early 2019 — Northwest Bank, KeyBank, Evans Bank and BankOnBuffalo.
The first two branches, operated by Northwest in Columbus, Ohio, and KeyBank, the banking subsidiary of KeyCorp in Cleveland, were requirements of community benefits agreements negotiated between each bank and the National Community Reinvestment Coalition. In both cases, Northwest and KeyBank agreed to open an office in an underserved community.
Evans Bank opened its first East Side branch in the fall of 2021. The office is located in the basement of an $84 million affordable senior housing building that was financed by Evans, a $2.1 billion-asset community bank headquartered south of Buffalo in Angola, New York.
Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that. But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.
The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity
On the community and economic development front, banks have had varying levels of participation. Buffalo-based M&T Bank, which holds a whopping 64% of all deposits in the Buffalo market and is one of the largest private employers in the region, has made consistent investments in the East Side by supporting Westminster Community Charter School, a kindergarten through eighth-grade school, and the Buffalo Promise Neighborhood, a nonprofit organization focused on improving access to education in the city’s 14215 ZIP code.
Currently, Buffalo Promise Neighborhood operates four schools. In addition to Westminster, it runs Highgate Heights Elementary, also K-8, as well as two academies that serve children ages six weeks through pre-kindergarten. Twelve M&T employees are dedicated to the program, according to the Buffalo Promise Neighborhood website. The bank has invested $31.5 million into the program since its 2010 launch, a spokesperson said.
Other banks are making contributions in other ways. In addition to the Jefferson Avenue branch and as part of its community benefits plan, Northwest Bank, a $14.2 billion-asset bank, supports a financial education center through a partnership with Belmont Housing Resources of Western New York. Meanwhile, the $198 billion-asset KeyBank gave $30 million for bridge and construction financing for Northland Workforce Training Center, a $100 million redevelopment project at a former manufacturing complex on the East Side that was partially funded by the state.
BankOnBuffalo’s East Side branch is located inside the center, which offers KeyBank training in advanced manufacturing and clean energy technology careers. A subsidiary of $5.6 billion-asset CNB Financial in Clearfield, Pennsylvania, BankOnBuffalo’s office opened a month after the shooting. The timing was coincidental, but important, said Michael Noah, president of BankOnBuffalo.
“I think it just cemented the point that this is a place we need to be, to be able to be part of these communities and this community specifically, and be able to build this community up,” Noah said.
In terms of public-private collaboration, some banks have been involved in a deeper way. In 2019, New York state, which had already been pouring $1 billion into Buffalo to help revitalize the economy, announced a $65 million economic development fund for the East Side. The initiative is focused on stabilizing neighborhoods, increasing homeownership, redeveloping commercial corridors including Jefferson Avenue, improving historical assets, expanding workforce training and development and supporting small businesses and entrepreneurship.
In conjunction with the funding, a public-private partnership called East Side Avenues was created to provide capital and organizational support to the projects happening along four East Side commercial corridors. Six banks — Charlotte, North Carolina-based Bank of America, the second-largest bank in the nation with $2.5 trillion of assets; M&T, which has $203 billion of assets; KeyBank; Warsaw, New York-based Five Star Bank, which has about $6 billion of assets; Northwest and Evans — are among the 14 private and philanthropic organizations that pledged a combined $8.4 million to pay for five years’ worth of operational support, governance and finance, fundraising and technical assistance to support the nonprofits doing the work.
Laura Quebral, director of the University at Buffalo Regional Institute, which is managing East Side Avenues, said the banks were the first corporations to step up to the request for help, and since then have provided loans and other products and education to keep the program moving.
Their participation “is a signal to the community that banks cared and were invested and were willing to collaborate around something,” Quebral said. “Being at the table was so meaningful.”
Richard Hamister is Northwest’s New York regional president and former co-chair of East Side Avenues. Hamister, who is based in Buffalo, said banks are a “community asset” that have a responsibility to lift up all communities, including those where conditions have arisen that allow it to be a target of racism like the East Side.
“We operate under federal charters, so we have an obligation to the community to not only provide products and services they need but also support when you go through a tragedy like that,” Hamister said. “We also have a moral obligation to try to help when things are broken … and to do what we can. We can’t fix everything, but we’ve got to fix our piece and try to help where we can.”
In the wake of a tragedy
After the massacre, there was a flurry of activity within banks and other organizations, local and out-of-town, to respond to the immediate needs of East Side residents. With the community’s only supermarket closed indefinitely, much of the response centered around food collection and distribution. Three of M&T’s five East Side branches, including the Jefferson Avenue branch across the street from Tops, became food distribution sites for weeks after the shooting. On two consecutive Fridays, Northwest provided around 200 free lunches to the community, using a neighborhood caterer who is also the bank’s customer. And BankOnBuffalo collected employee donations that amounted to more than 20 boxes of toiletries and other items that were distributed to a nonprofit.
At the same time, M&T, KeyBank and other banks began financial donations to organizations that could support the immediate needs of the community. KeyBank provided a van that delivered food and took people to nearby grocery stores. Providence, Rhode Island-based Citizens Financial Group, whose ATM inside Tops was inaccessible during the store’s temporary closure, installed a fee-free ATM near a community center located about a half-mile north of Tops, and later put a permanent ATM inside the center that remains there today. And M&T rolled out a short-term loan program to provide capital to East Side small-business owners.
One of the funds that benefited from banks’ support was the Buffalo Together Community Response Fund, which has raised $6.2 million to address the long-term needs of the East Side.
Bank of America and Evans Bank each donated $100,000 to the fund, whose list of major sponsors includes four other banks — JPMorgan Chase, Citigroup, M&T and KeyBank. Thomas Beauford Jr., a former banker who is co-chair of the response fund, said banks, by and large, directed their resources into organizations where the dollars would have an immediate impact.
“Banks said, ‘Hey, you know … it doesn’t make sense for us to try to build something right now. … We will fund you in the work you’re doing,'” said Beauford, who has been president and CEO of the Buffalo Urban League since the fall of 2020. “I would say banks showed up in a big way.”
Fourteen months later, banks say they are committed to playing a positive role on the East Side. For the second year, KeyBank is sponsoring a farmers’ market on the East Side, an attempt to help fill the food desert in the community. Last fall, BankOnBuffalo launched a mobile “bank on wheels” truck that’s stationed on the East Side every Wednesday. The 34-foot-long truck, which is staffed by two people and includes an ATM and a printer to make debit cards, was in the works before the shooting, and will eventually make four stops per week around the Buffalo area.
Evans has partnered with the city of Buffalo to construct seven market-rate single family homes on vacant lots on the East Side. The relationship with the city is an example of how banks can pair up with other entities to create something meaningful and lasting, more than they might be able to do on their own, said Evans President and CEO David Nasca.
The bank has “picked areas” where it can use its resources to make a difference, Nasca said.
“I don’t think the root causes can be ameliorated” by banks alone, he said. “We can’t just grant money. It has to be within our construct of a financial institution that invests and supports the public-private partnership. … All the oars [need to be] pulling together or this doesn’t work.”
‘Little or no engagement with minorities’
All of these efforts are, of course, welcomed by the community, but there is still criticism that banks haven’t done enough to make up for their past contributions to segregating the city. And perhaps more importantly, some of that criticism centers on banks failing to do their most basic function in society — provide credit.
In 2021, the New York State Department of Financial Services issued a report about redlining in Buffalo. The regulator looked at banks and nonbank lenders and found that loans made to minorities in the Buffalo metro area made up 9.74% of total loans in Buffalo. Overall, Black residents comprise about 33% of Buffalo’s total population of more than 276,000, census data shows.
The department said its investigation showed the lower percentage was not due to “excessive denials of loan applications based on race or ethnicity,” but rather that “these companies had little or no engagement with minorities and generally made scant effort to do so.”
“The unsurprising result of this has been that few minority customers or individuals seeking homes in majority-minority neighborhoods have made loan applications … in the first instance.”
Furthermore, accusations of redlining persist today, even though the practice of discriminating in housing based on race was outlawed by the Fair Housing Act of 1968.
In 2014, Evans was accused of redlining by the New York State Attorney General, which said the community bank was specifically avoiding making mortgage loans on the East Side. The bank, which at the time had $874 million of assets, agreed to pay $825,000 to settle the case, but Nasca maintains that the charges were unfounded. He points to the fact that the bank never had a fair lending or fair housing violation, no specific incidents were ever claimed and that the bank’s Community Reinvestment Act exam never found evidence of discriminatory or illegal credit practices.
The bank has a greater presence on the East Side today, but that’s because it has grown in size, not because it is trying to make up for previous accusations of redlining, he said.
“Ten years ago, our involvement [on the East Side] certainly wasn’t what you’re seeing today,” Nasca said. “We were looking to participate more, but we were participating within our means and our reach. As we have grown, we have built more resources to be able to do more.”
Shortly after accusations were made against Evans, Five Star Bank, the banking arm of Financial Institutions in Warsaw, New York, was also accused of redlining by the state Attorney General. Five Star, which has been growing its presence in the Buffalo market for several years, wound up settling the charges for $900,000 and agreeing to open two branches in the city of Rochester.
KeyBank is currently being accused of redlining by the National Community Reinvestment Coalition. In a 2022 report, the group said that KeyBank is engaging in systemic redlining by making very few home purchase loans in certain neighborhoods where the majority of residents are Black. Buffalo is one of several cities where the bank’s mortgage lending “effectively wall[ed] out Black neighborhoods,” especially parts of the East Side, the report said.
KeyBank denied the allegations. In March, the coalition asked regulators to investigate the bank’s mortgage lending practices.
Beyond providing more credit, some community members believe that banks should be playing a larger role in addressing other needs on the East Side. And the list of needs runs the gamut from more grocery stores to safe, affordable housing to infrastructure improvements such as street and sidewalk repairs.
Alexander Wright is founder of the African Heritage Food Co-op, an initiative launched in 2016 to address the dearth of grocery store options on the East Side, where he grew up. Wright said that while banks’ philanthropic efforts are important, banks in general “need to be in a place of remediation” to fix underlying issues that the industry, as a whole, helped create. (After publication of this story, Wright left his job as CEO of the African Heritage Food Co-Op.)
Aside from charitable donations, banks should be finding more ways to work directly with East Side business owners and entrepreneurs, helping them with capital-building support along the way, Wright said. One place to start would be technical assistance by way of bank volunteers.
“Banks are always looking to volunteer. ‘Hey, want to come out and paint a fence? Want to come out and do a garden?'” Wright said. “No. Come out here and help Keshia with bookkeeping. Come out here and do QuickBooks classes for folks. Bring out tax experts. Because these are things that befuddle a lot of small businesses. Who is your marketing person? Bring that person out here. Because those are the things that are going to build the business to self-sufficiency.
“Anything short of the capacity-building … that will allow folks to rise to the occasion and be self-sufficient I think is almost a waste,” Wright added. “We don’t need them to lead the plan. What we need them to do is be in the community and [be] hearing the plan and supporting it.”
Parker, of Open Buffalo, has similar thoughts about the role that banks should play. One day, soon after the massacre, an ATM appeared down the street from Tops, next to the library that sits across the street from Parker’s office. Soon after the ATM was installed, Parker began fielding questions from area residents who were skeptical of the machine and wanted to know if it was legitimate. But Parker didn’t have any information to share with them. “There was no outreach. There was no community engagement. So I’m like, ‘Let me investigate,'” she said. “I think that’s a symptom of how investment is done in Black communities, even though it may be well-intentioned.”
As it turns out, the temporary ATM belonged to JPMorgan Chase. The megabank has had a commercial banking presence in Buffalo for years, but it didn’t operate a retail branch in the region until last year. Today it has four branches in operation and plans to open another two by the end of the year, a spokesperson said.
After the Tops shooting, the governor’s office reached out to Chase asking if the bank could help in some way, the spokesperson said in response to the skepticism. The spokesperson said that while the Chase retail brand is new to the Buffalo region, the company has been active in the market for decades by way of commercial banking, private banking, credit card lending, home lending and other businesses.
In addition to the ATM, the bank provided funding to local organizations including FeedMore Western New York, which distributes food throughout the region.
“We are committed to continuing our support for Buffalo and helping the community increase access to opportunities that build wealth and economic empowerment,” the spokesperson said in an email.
In the year since the massacre, there has been some progress by banks in terms of their interest in listening to the East Side community and learning about its needs, said Nicholas. But he hasn’t felt an air of urgency from the banking community to tackle the issues right now.
“I do experience banks being a little more open to figuring out what their role is, but it’s slow. It’s slow,” said Nicholas. The senior pastor of the Lincoln Memorial United Methodist Church, located about a mile north from Tops, Nicholas is part of a 13-member local advisory committee for the New York arm of Local Initiatives Support Coalition, or LISC. The group is focused on mobilizing resources, including banks, to address affordable housing in Western New York, specifically in the inner city, as well as training minority developers and connecting them to potential investors, Nicholas said.
Of the 13 members, seven are from banks — one each from M&T, Bank of America, BankOnBuffalo, Evans and KeyBank, and two members from Citizens Financial Group. One of the priorities of LISC NY is health equity, and the fact that banks are becoming more engaged in looking at health disparities is promising, Nicholas said. Still, they have more work to do, he said.
“I need them to think more on how to strengthen and build the economy on the East Side and provide leadership around that, not only to provide charitable things, but using sound business and banking and community development principles to say, ‘OK, if we’re going to invest in this community, these are the types of things that need to happen in this community,’ and then encourage their partners and other people they work with … to come fully in on the East Side.”
Some bankers agree with the community activists.
“Putting a branch in is great. Having a bank on wheels is great,” said Noah of BankOnBuffalo. “But if you’re not embedded in the community, listening to the community and trying to improve it, you’re not creating that wealth and creating a better lifestyle for everyone.”
What could make a substantial difference in terms of banks’ impact on the community is a combination of collaboration and leadership, said Taylor. He supports the idea of banks leading the charge on the creation of a comprehensive redevelopment and reinvestment plan for the East Side, and then investing accordingly and collaboratively through their charitable foundations.
“All of them have these foundations,” Taylor said. “You can either spend that money in a strategic and intentional way designed to develop a community for the existing population, or you can spend that money alone in piecemeal, siloed, sectorial fashion that will look good on an annual report, but won’t generate transformational and generational changes inside a community.”
Banks might be incentivized to work together because it could mean two things for them, according to Taylor: First, they’d have an opportunity to spend money in a way that would have maximum impact on the East Side, and second, if done right, the city and the banks could become a model of the way to create high levels of diversity, equity and inclusion in an urban area.
“If you prove how to do that, all that does is open up other markets of consumption all over the country because people want to figure out how to do that same thing,” Taylor said.
Some of that is already happening, at least on a bank-by-bank case, said KeyBank’s Owunwanne. Through the KeyBank Foundation, the company is able to leverage different relationships that connect nonprofits to other entities and corporations that can provide help.
“I see this as an opportunity for us to make not just incremental changes, but monumental changes … as part of a larger group,” Owunwanne said “Again, I say that not to absolve the bank of any responsibility, but just as a larger group.”
Downstairs from Parker’s office, Golden Cup Coffee, a roastery and cafe run by a husband and wife team, and some other Jefferson Avenue businesses are trying to build up a business association for existing and potential Jefferson-area businesses. Parker imagined what the group could accomplish if one of the banks could provide someone on a part-time basis to facilitate conversations, provide administrative support and coordinate marketing efforts.
“In the grand scheme of things, when we’re talking about a multimillion dollar [bank], a part-time employee specifically dedicated to relationship-building and building out coalitions, it sounds like a small thing,” Parker said. “But that’s transformational.”
The weekly applications report from the Mortgage Bankers Association (MBA) wasn’t positive, but it was certainly consistent. MBA said its Market Composite Index, a measure of mortgage loan application volume, was down by 3.0 percent across the board during the week ended July 28. The composite index decreased 3.0 percent on both a seasonally adjusted and unadjusted basis. The same percentage decline held for the Refinance Index and both the adjusted and unadjusted Purchase Indices.
Applications for refinancing were 32 percent lower than the same week in 2022 and the Purchase Index was down 26 percent year-over-year.
“Mortgage rates edged higher last week, with the 30-year fixed mortgage rate [increasing] to 6.93 percent and leading to another decline in overall applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The purchase index decreased for the third straight week to its lowest level since the beginning of June and remains 26 percent behind last year’s levels. The decline in purchase activity was driven mainly by weaker conventional purchase application volume, as limited housing inventory and rates still close to 7 percent are crimping affordability for many potential homebuyers. The refinance market continues to feel the impact of these higher rates, and applications trailed last year’s pace by over 30 percent with many homeowners not looking for refinance opportunities.”
Highlights from MBA’s Weekly Mortgage Applications Survey
Loan sizes yo-yoed again, dropping from last week’s spike of $383,100 to $375,100. Purchase loan sizes, which averaged $432,700 the prior week, retreated to $423,400.
The FHA share of applications increased to 13.3 percent from 12.7 percent and the VA share decreased to 11.6 percent from 12.1 percent. The USDA share of total applications increased to 0.7 percent from 0.5 percent the prior week.
The refinance share of mortgage activity increased to 28.9 percent from 28.7 percent week-over-week.
The 6.93 percent average interest rate for conforming 30-year fixed-rate mortgages (FRM) was a 6-basis point increase from the prior week. Points grew to 0.68 from 0.65.
The rate for jumbo 30-year FRM dipped to 6.89 percent from 6.90 percent,with points decreasing to 0.58 from 0.64.
Thirty-year FRM with FHA guarantees had an average rate of 6.85 percent, up from 6.80 percent the prior week. Points ticked up 2 basis points to 1.05.
The rate for 15-year FRM rose to 6.39 percent from 6.37 percent, with points increasing to 0.78 from 0.75.
The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) averaged 6.18 percent, a 17 basis point surge, while points dropped to 1.16 from 1.25.
The adjustable-rate mortgage (ARM) share of applications jumped from 5.9 percent to 6.5 percent.
An old tool is back as mortgage rates rise: Seller financing often occurs when buyers hope to save on closing costs and sellers want top dollar for their home.
NEW YORK – Real estate professionals report an increasing interest in seller financing for transactions involving residential properties after the rise in interest rates.
Seller financing was almost nonexistent when mortgage rates hit record lows, but it’s not a new tool. It’s used most often when buyers seek to increase their purchasing power by saving on closing costs or paying lower interest rates – and, at the same time, by sellers who want buyers to make a full-price or higher offer on the home.
However, sellers who give buyers the title upfront face significant risk if they provide financing.
David Dweck, a private investor from Boca Raton whose portfolio consists of single-family homes in Florida and North Carolina, says he carefully vets his buyers when he agrees to provide financing.
“I underwrite it as if I’m a bank,” he says. “I want to have a reasonable expectation that the borrower will pay me back.”
Dweck requires a down payment of at least 20% and will only consider seller financing if the buyer pays full price or above.
Danny Hertzberg, an agent with The Jills Zeder Group at Coldwell Banker in Miami Beach, says that while owner financing is often discussed between buyers and sellers, it is rarely consummated. He noted its most likely to occur when the house has either been languishing on the market without any offers, or the offers come in too low.
“There has to be some carrot for the seller to consider it,” he said. “Usually that carrot is a buyer offering full asking price or close to it.”
Source: Wall Street Journal (07/26/23) Friedman, Robyn
As the Federal Open Markets Committee raised interest rates by 25 basis points last Thursday, mortgage rates ticked up and mortgage applications fell. For the week that ended July 28, mortgage applications fell 3% from the prior week, according to data from the Mortgage Bankers Association.
“Mortgage rates edged higher last week, with the 30-year fixed mortgage rate’s increase to 6.93% and leading to another decline in overall applications,” said Joel Kan, MBA’s vice president and deputy chief economist.
The purchase index kept decreasing for the third straight week, hitting its lowest level since the beginning of June. Meanwhile, it remains 26% behind last year’s levels. The decline in purchase activity was driven mainly by weaker conventional purchase application volume, said Kan.
He added : “The limited housing inventory and rates still close to 7% are crimping affordability for many potential homebuyers.”
On the other hand, the refinance market continues to suffer from these higher rates with many homeowners not looking for refinance opportunities. The refinance index decreased 3% since last week and is 32% lower than it was the same week a year ago.
At Mortgage News Daily, 30-year fixed-rate mortgage rates were at 7.10% on Tuesday. At HousingWire’s Mortgage Rates Center, Optimal Blue had rates at 6.88% on Monday.
The Federal Housing Administration loans’ share increased to 13.3% from 12.7% the week prior. The U.S. Department of Veteran Affairs loans’ share dropped to 11.6% from 12.1%. And the U.S. Department of Agriculture loans’ share ticked up to 0.7% from 0.5%.
Adjustable-rate mortgages increased to 6.5% of total loan applications last week, the MBA said. The average contract interest rate for 5/1 ARMs climbed to 6.18% from 6.01% a week prior.
A “share certificate” is the credit union equivalent of a bank certificate of deposit (CD).
Share certificates have a fixed annual percentage yield (APY) for a fixed period.
Share certificates can offer better rates than “share accounts,” which correspond with bank savings accounts.
A share certificate can be a good option for earning interest on cash you’ll want to use in the future.
Share certificates: Credit union version of CDs
A share certificate is a type of savings account with a fixed APY for a fixed period. Credit unions offer share certificates. They’re equivalent to certificates of deposit (CDs), which you can get at banks. Think of a share certificate as a credit union CD.
Share certificates vs. share accounts
While share certificates are equivalent to CDs, share accounts at a credit union are similar to savings accounts at a bank. Here are some critical differences between share certificates and share accounts:
Higher APYs. Share certificates usually offer a higher APY than share accounts, but a share certificate requires that you keep your money in the account for the entire period you selected.
Fixed APYs. For that period, your share certificate will earn a fixed APY. On the other hand, the APY of a share account can change from time to time, so the rate of earnings (called “dividends”) you get can change.
No access to funds. If you withdraw your money from a share certificate before the end of its fixed term, you may have to pay a penalty fee. With a share account, you can add or withdraw funds when you need.
Why do credit unions call it a share certificate?
Credit unions use the term “share” because members (that is, depositors) at a credit union are part owners of the institution. Just as stockholders have a share of stock in a company, credit union members have share accounts or share certificates in a credit union. Your earnings from a share certificate are called “dividends,” equivalent to “interest” earned from a bank.
In the context of investing, a share certificate is a legal document that proves you own some stock (that is, a share of ownership) of a company. The company issues it to the shareholder; a “share certificate” is synonymous with a “stock certificate” in investing terms.
How do share certificates work?
A share certificate works this way: You choose a term (length of time) to open and deposit money into the account. Sometimes a minimum opening deposit is required.
Once you’ve deposited funds and the term begins, you cannot add or withdraw any funds until the term has ended (or “matured”). You may have to pay a penalty if you withdraw your money before the certificate term ends.
While your money is kept with the credit union, the credit union will pay you dividends. Dividends may be compounded daily or monthly (learn more about compound earnings).
When your share certificate matures at the end of the term, you can either roll your certificate funds into another share certificate (using the CD ladder strategy), transfer your money to a checking or share account, or withdraw your money.
June 21 (Reuters) – Commonwealth Bank of Australia (CBA.AX) on Wednesday cut its buffer rate for some borrowers refinancing their existing home loan to 1% from the industry standard of 3%, providing relief to many clients who would otherwise fail to qualify due to high interest rates.
The country’s prudential regulator advises lenders to refinance home loans only if they believe the customer could repay at 3% higher than current market rates.
While CBA’s alternate buffer is not in line with the regulator’s recommendation, it does not break the serviceability buffer, the regulator said, as it allows exceptions to the policy but warns against high volumes.
CBA has a quarter of the Australian mortgage market, where thousands of borrowers are expected to end their fixed rate loans this year, forcing them to shop around for new loans at current rates.
The Australian Prudential Regulation Authority (APRA) in a letter earlier this month said banks could face heightened supervisory attention if they report large volumes of policy exceptions which could pose risks to the banks’ loan books.
Starting Friday, CBA will allow select customers who meet some “strict eligibility criteria” to refinance their loans if they are capable of repaying at 1% above current market rates, the bank said, adding that a track record of no missed payments for at least a year was among several criteria for customers to be considered eligible.
“We know that due to the current interest rate environment some home owners are facing challenges refinancing their home loans so we are introducing an alternate interest rate serviceability buffer,” CBA’s Michael Baumann, executive general manager home buying said.
Westpac Banking Corp (WBC.AX), the country’s second-biggest mortgage provider, also offers modified serviceability assessment rate to customers unable to meet the industry standard.
The Reserve Bank of Australia has raised interest rates by 400 basis points to an 11-year high of 4.1% since May last year.
Reporting by Sameer Manekar in Bengaluru and Byron Kaye in Sydney ; Editing by Nivedita Bhattacharjee
Our Standards: The Thomson Reuters Trust Principles.
When it comes to home decor, it takes a certain level of assuredness to commit to color. Whether it is painting your walls green or investing in a bright blue couch, staying safe seems like the only option with neutrals like grays, beiges, and greiges.
But anyone can gain confidence designing their own space by adding low-stakes, vibrant touches in noncommittal ways. Here, five experts offer their best tips to brighten up your living room—each impermanent and cost-effective—sure to leave you inspired. Once you’ve got an idea in mind, head over to homedepot.com/decor to shop top trends and brands, and find your personalized pops of color.
1. Vibrant Rugs
“Look down on the ground. All you need is a new rug and voila, your space is totally transformed,” says Brad Ramsey, principal designer and founder of his own studio in Nashville. “Rugs can provide a room with texture, pattern, or color—and sometimes all three in one. Depending on your style, you can go for modern patterns, saturated solids, soft organic textures, or muted antiques to change the feel of your home.”
BALTA, Merril Pink Geometric Area Rug
BALTA, Levine Burnt Orange Geometric Shag Area Rug
Rug Branch, Savannah Collection Modern Geometric Area Rug
2. Contrasting Textures and Elements
“Think of your upholstery like good basics in your wardrobe: You can always layer underneath or on top of those base pieces—and change the feel of a space without a substantial renovation,” says Ramsey.
For example: If you have a leather or velvet couch, opt for an oversized natural jute or sisal rug that takes up the majority of the space. Then, add a brighter and smaller rug over top. “Scale the colorful rug to ground the seating area and then let the natural rug provide more texture,” he adds. “Then you can contrast and accessorize with fun art and metal accents.”
David Tsay
3. Powerful Pillows
All of our experts could agree on this: Never underestimate the power of pillows. “I love to add a color accent to a room with throw pillows. But don’t settle for two of the exact same,” says Ramsey. “Instead opt for a collection of coordinating pillows.”
If you want to revitalize your oatmeal or charcoal sofa, “selecting a fun, colorful print fabric for pillows will bring it back to life,” says Susan Spath, principal designer of Kern & Co in San Diego.
Mina Victory, Coral Abstract Rectangle Throw Pillow
New Heights, Augustine Slope Arm Linen Blend Sofa
LR Home, Pom Pom Textured Decorative Throw Pillow
4. Lively Curtains and Blinds
“What will give you the biggest bang for your buck are colorful drapes,” says Mimi Meacham, founder and principal designer of Marian Louise Designs. “Frame your windows with a fun, colorful print, or choose a solid color fabric with a chic trim.” Meacham prefers darker, heavier tones paired with velvet and wool textures, which “add a soft, yet impactful statement to the space.” If you prefer something more open, linen or sheer fabrics can create a light and airy feel.
5. Natural Accents
“A natural way to liven up any room is to incorporate plants,” says Ramsey. “If you get great light, try a fiddle-leaf fig tree in the window. They love to sunbathe and cast gorgeous shadows from their large, waxy leaves.” Colorful planters can also infuse a joyful atmosphere in any space. In an area where sunlight isn’t abundant, try something lower maintenance, like a snake plant, or add dried or faux flowers to empty shelves, bookcases, stairwells, and entryways.
Litton Lane, Yellow Metal Modern Planter
Pure Garden, Artificial Fiddle Leaf Fig Tree
CosmoLiving, Blue Metal Geometric Vase
6. Subtle Lamps and Lights
Whether you’re adding decorative lighting over a piece of artwork or a stand-alone lamp for added ambiance, seize the opportunity to shake things up. “A lamp or sconce with a white lampshade is boring,” says Meacham. “Invest in some fun, colorful lampshades” that project their hues around the room.
7. Bold Bookcases
Adding wallpaper to built-in or freestanding bookcases “will add depth, layering and interest to the living room. Plus, it’s much simpler and a more minimal investment than covering your walls,” says Mindy O’Connor of Melinda Kelson O’Connor Architecture & Interiors in Philadelphia.
Alternatively, add a coat of fresh paint to your shelves. “If your living room is mostly neutral, changing the color of your customized built-in or freestanding shelves to a darker tone, such as navy, black, chocolate brown, or forest green creates a striking visual contrast against white walls,” says the principal designer at Miss Alice Designs, Alice Chiu. “Your eye will be drawn to the visual weight of the contrast, which presents a nice focal point.”
David Tsay
8. Refreshed Knickknacks
Ramsey recommends swapping outdated tchotchkes for items that feel more current. “We can get stuck with the same decorative items in our homes for years out of fear that it’s wasteful to discard them. But I say donate those items and look for new ones that speak to you! Would you wear the same shoes for 10 years and expect to still like them? In most cases, no! So don’t treat your decor like it’s too precious,” he says. “As styles and trends change, you can update along with them.”
Teal Elephant Book Ends, Carved Gorara Soapstone
“Enclosed Circles” by Marmont Hill Framed Abstract Art Print
A & B Home, Effra Rectangular Blue Trays
Feeling inspired? Find colorful accents for your home at homedepot.com/decor.
Photographer: David Tsay; Art Direction and Production: Armine Altiparmakian and Sabrina Contratti; Prop Stylist: Olga Grigorenko; Merch Team: Two Coast Productions; Local Production: Right Arm Productions