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As we head into peak home-buying season, signs of life have begun to spring up in the housing market.
Even so, still-high mortgage rates and home prices amid historically low housing stock continue to put homeownership out of reach for many.
Moreover, the National Association of Realtors agreed to a monumental $418 million settlement on March 15 following a verdict favoring home sellers in a class action lawsuit. Still subject to court approval, the settlement requires changes to broker commissions that will upend the buying and selling model that has been in place for years.
Housing Market Forecast for 2024
Elevated mortgage rates, out-of-reach home prices and record-low housing stock are the perennial weeds that experts say hopeful home buyers can expect to contend with this spring—and beyond.
“The housing market is likely to continue to face the dual affordability constraints of high home prices and elevated interest rates in 2024,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in an emailed statement. “Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we’d previously forecast.”
Despite ongoing affordability hurdles, Fannie Mae forecasts an increase in home sales transactions compared to last year. Experts also anticipate a slower rise in home prices this year compared to recent years, but price fluctuations will continue to vary regionally and depend strongly on local market supply.
U.S. home prices declined in January for the third consecutive month due to high borrowing costs, according to the latest S&P CoreLogic Case-Shiller Home Price Index. But prices year-over-year jumped 6%—the fastest annual rate since 2022.
Chief economist at First American Financial Corporation Mark Fleming predicts a “flat stretch” ahead.
“If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right,” Fleming said in his 2024 forecast.
Will the Housing Market Finally Recover in 2024?
For a housing recovery to occur, several conditions must unfold.
“For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” says Keith Gumbinger, vice president at online mortgage company HSH.com. “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”
And, of course, mortgage rates would need to cool off—which experts say is imminent despite rates edging back up toward 7%. For the week ending April 11, the 30-year fixed mortgage rate stood at 6.88%, according to Freddie Mac.
However, when mortgage rates finally go on the descent, Gumbinger says don’t hope they cool too quickly. Rapidly falling rates could create a surge of demand that wipes away any inventory gains, causing home prices to rebound.
“Better that rate reductions happen at a metered pace, incrementally improving buyer opportunities over a stretch of time, rather than all at once,” Gumbinger says.
He adds that mortgage rates returning to a more “normal” upper 4% to lower 5% range would also help the housing market, over time, return to 2014-2019 levels. Yet, Gumbinger predicts it could be a while before we return to those rates.
Nonetheless, Kuba Jewgieniew, CEO of Realty ONE Group, a real estate brokerage company, is optimistic about a recovery this year.
“[W]e’re definitely looking forward to a better housing market in 2024 as interest rates start to settle around 6% or even lower,” says Jewgieniew.
NAR Settlement Rocks the Residential Real Estate Industry
Following years of litigation, the National Association of Realtors (NAR) has agreed to pay $418 million to settle a series of antitrust lawsuits filed in 2019 on behalf of home sellers.
The plaintiffs claimed that the leading national trade association for real estate brokers and agents “conspired to require home sellers to pay the broker representing the buyer of their homes in violation of federal antitrust law.”
Though the landmark settlement is subject to court approval, most consider it a done deal.
The settlement requires NAR to enact new rules, including prohibiting offers of broker compensation on multiple listing services (MLS), the private databases that allow local real estate brokers to publish and share information about residential property listings. The rule is set to take effect in mid-July, once the settlement receives judge approval.
Moreover, sellers will no longer be required to pay buyer broker commissions and real estate agents participating in the MLS must establish written representation agreements with their buyer clients.
NAR denies any wrongdoing and maintains that its current policies benefit buyers and sellers. The organization believes it’s not liable for seller claims related to broker commissions, stating that it has never set commissions and that commissions have always been negotiable.
How Will the New Rules Impact the Buying and Selling Process?
Per the settlement’s terms, the costs associated with buying and selling a home are set to change dramatically.
“The primary things that will change are the decoupling of the seller commission and the buyer commission in the MLS,” says Rita Gibbs, a Realtor at Realty One Group Integrity in Tucson. “It’s gonna cause some chaos.”
While sellers will no longer be able to offer broker compensation in the MLS, there’s no rule prohibiting off-MLS negotiations. Because of this, Gibbs suspects buyers and sellers will continue offering broker compensation off the MLS.
The Department of Justice confirmed it will permit listing brokers to display compensation details on their websites. However, buyer agents will need to undergo the tedious task of visiting countless broker websites to find who’s offering what.
Michael Gorkowski, a Virginia-based real estate agent with Compass, is also trying to figure out how to manage the potential ruling.
“We often work with buyers for many months and sometimes years before they find exactly what they’re looking for,” Gorkowski says. “So in a case where a seller isn’t offering a co-broker commission, we will have to negotiate that the buyer pays an agreed-upon commission prior to starting their search.”
The Changes Will Impact These Home Buyers Most
“In the short term, it is absolutely going to injure buyers, especially FHA and VA buyers,” Gibbs says. “With rare exception, these buyers are not in a position to pay for their own agent.”
Gibbs says that if sellers don’t offer compensation, many buyers who can’t otherwise afford to pay a broker will choose to go unrepresented.
Gorkowski notes that veterans taking out VA loans face a unique challenge under the new rules. “[P]er the VA requirements, buyers cannot pay so it must be negotiated with the seller for now.”
As a result, NAR is calling on the U.S. Department of Veterans Affairs to revise its policies prohibiting VA buyers from paying broker commissions. Even so, there’s skepticism that the federal government will be able to implement changes in time for the July deadline.
Gibbs and Gorkowski are among the many agents especially concerned about first-time home buyers. After July, first-time and VA buyers will be required to sign a buyer-broker agreement stating that they will compensate their broker—but Gibbs says many won’t have the means to do so.
In this situation, agents would likely only show buyers homes where sellers are offering compensation.
“This is a very troubling situation,” Gorkowski says.
Housing Inventory Forecast for 2024
With many homeowners “locked in” at ultra-low interest rates or unwilling to sell due to high home prices, demand continues to outpace housing supply—and likely will for a while—even as some homeowners may finally be forced to sell due to major life events such as divorce, job changes or a growing family.
“I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low 5% range, so probably not in 2024,” says Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence and business advisory firm.
Housing stock remains near historic lows—especially entry-level supply—which has propped up demand and sustained ultra-high home prices. Here’s what the latest home values look like around the country.
Yet, some hopeful housing stock signs have begun to sprout:
Existing inventory is showing signs of loosening as impatient buyers and sellers have begun to accept the reality of mortgage rates oscillating between 6% and 7%.
Home-builder outlook also continues to get sunnier, trending back up amid declining mortgage rates and better building conditions.
The most recent National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which tracks builder sentiment, saw a fourth consecutive monthly rise, surpassing a crucial threshold with an increase from 48 to 51 in March. A reading of 50 or above means more builders see good conditions ahead for new construction.
At the same time, new single-family building permits ticked up 1% in February—the 13th consecutive monthly increase—according to the latest data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development (HUD).
Residential Real Estate Stats: Existing, New and Pending Home Sales
Though some housing market data indicates signs of growth are in store this spring home-buying season, persistently high mortgage rates may hinder activity from fully flourishing.
Here’s what the latest home sales data has to say.
Existing-Home Sales
Existing-home sales came to life in February, shooting up 9.5% from the month before, according to the latest data from the NAR. Sales dipped 3.3% from a year ago.
Experts attribute the monthly jump to a bump in inventory.
“Additional housing supply is helping to satisfy market demand,” said Lawrence Yun, chief economist at NAR, in the report.
Existing inventory rose 5.9%—logging 1.07 million unsold homes at the end of February. However, there are still only 2.9 months of inventory at the current sales pace. Most experts consider a balanced market falling between four and six months.
Meanwhile, existing home prices continue to soar to unprecedented heights, reaching $384,500, which marks the eighth consecutive month of yearly price increases and a February median home price record.
New Home Sales
Sales of newly constructed single-family houses ticked down by a nominal 0.3% compared to January, but outpaced February 2023 sales by 5.9%, according to the latest U.S. Census Bureau and HUD data.
Amid a high percentage of homeowners still locked in to low mortgage rates, home builders have been picking up the slack.
“New construction continues to be an outsized share of the housing inventory,” said Dr. Lisa Sturtevant, chief economist at Bright MLS, in an emailed statement.
Sturtevant notes that declining new home prices are coming amid a recent trend of builders introducing smaller and more affordable homes to the market.
The median price for a new home in February was $400,500, down 7.6% from a year ago.
Source: U.S. Census Bureau and U.S. Department of Housing and Urban Development
Pending Home Sales
NAR’s Pending Homes Sales Index rose 1.6% in February from the month prior even as mortgage rates approached 7% by the end of the month. Pending transactions declined 7% year-over-year.
A pending home sale marks the point in the home sales transaction when the buyer and seller agree on price and terms. Pending home sales are considered a leading indicator of future closed sales.
The Midwest and South saw monthly transaction gains while the Northeast and West saw declines due to affordability challenges in those higher-cost regions.
“While modest sales growth might not stir excitement, it shows slow and steady progress from the lows of late last year,” said Yun, in the report.
Ongoing Affordability Challenges Could Throw Cold Water on Spring Home-Buying Hopes
Though down from its 2023 high of 7.79%, the average 30-year fixed mortgage rate in 2024 remains well over 6% amid rising home values. As a result, home buyers continue to face affordability challenges.
According to data from its first-quarter 2024 U.S. Home Affordability Report, property data provider Attom found that median-priced single-family homes remain less affordable than the historical average in over 95% of U.S. counties.
For one, the data uncovered that expenses are eating up more than 32% of the average national wage. Common lending guidelines require monthly mortgage payments, property taxes and homeowners insurance to comprise 28% or less of your gross income.
At the same time, home prices and homeownership expenses continue to outpace wage growth.
Consequently, the latest expense-to-wage ratio is hovering at one of the highest points over the past decade, according to the Attom report, despite some slight affordability improvements over the last two quarters.
“Affording a home remains a financial stretch, or a pipe dream, for so many households,” said Rob Barber, CEO at Attom.
Pro Tips for Buyers and Sellers
Here are some expert tips to increase your chances for an optimal outcome in this tight housing market.
Pro Tips for Buying in Today’s Real Estate Market
Hannah Jones, a senior economic research analyst at Realtor.com, offers this expert advice to aspiring buyers:
Know your budget. Instead of focusing on price, figure out how much you can afford as a monthly payment. Your monthly housing payment is influenced by the price of the home, your down payment, mortgage rate, loan term, home insurance and property taxes.
Be flexible about home size and location. Perhaps your budget is sufficient for a small home in your perfect neighborhood, or a larger, newer home further out. Understanding your priorities and having some flexibility can help you move quickly when a suitable home enters the market.
Keep an eye on the market where you hope to buy. Determine the area’s available inventory and price levels. Also, pay attention to how quickly homes sell. Not only will you be tuned in when something great hits the market, you can feel more confident moving forward with purchasing a well-priced home. A real estate agent can help with this.
Don’t be discouraged. Purchasing a home is one of the largest financial decisions you’ll ever make. Approaching the market confidently, armed with good information and grounded expectations will take you far. Don’t let the hustle of the market convince you to buy something that’s not in your budget, or not right for your lifestyle.
Pro Tips for Selling in Today’s Real Estate Market
Gary Ashton, founder of The Ashton Real Estate Group of RE/MAX Advantage, has this expert advice for sellers:
Research comparable home prices in your area. Sellers need to have the most up-to-date pricing intel on comparable homes selling in their market. Know the market competition and price the home competitively. In addition, understand that in some price points it’s a buyer’s market—you’ll need to be prepared to make some concessions.
Make sure your home is in top-notch shape. Homes need to be in great condition to compete and create a strong “online curb appeal.” Well-maintained homes and attractive front yards are major features that buyers look for.
Work with a local real estate agent. A real estate agent or team with a strong local marketing presence and access to major real estate portals can offer significant value and help you land a great deal.
Don’t put off issues that require attention. Prepare the home by making any repairs or improvements. Removing any objections that buyers may see helps focus the buyer on the positive attributes of the home.
Will the Housing Market Crash in 2024?
Despite some areas of the country experiencing monthly price declines, the likelihood of a housing market crash—a rapid drop in unsustainably high home prices due to waning demand—remains low for 2024.
“[T]he record low supply of houses on the market protects against a market crash,” says Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions, a non-QM lender.
Moreover, experts point out that today’s homeowners stand on much more secure footing than those coming out of the 2008 financial crisis, with many borrowers having substantial home equity.
“In 2024, I expect we’ll see home appreciation take a step back but not plummet,” says Orphe Divounguy, senior macroeconomist at Zillow Home Loans.
This outlook aligns with what other housing market watchers expect.
“Comerica forecasts that national house prices will rise 2.9% in 2024,” said Bill Adams, chief economist at Comerica Bank, in an emailed statement.
Divounguy also notes that several factors, including Millennials entering their prime home-buying years, wage growth and financial wealth are tailwinds that will sustain housing demand in 2024.
Even so, with fewer homes selling, Dan Hnatkovskyy, co-founder and CEO of NewHomesMate, a marketplace for new construction homes, sees a price collapse within the realm of possibility, especially in markets where real estate investors scooped up numerous properties.
“If something pushes that over the edge, the consequences could be severe,” said Hnatkovskyy, in an emailed statement.
Will Foreclosures Increase in 2024?
In February, total foreclosure filings were down 1% from the previous month but up 8% from a year ago, according to Attom.
“These trends could signify evolving financial landscapes for homeowners, prompting adjustments in market strategies and lending practices,” said Barber, in a report.
Lenders began foreclosure on 22,575 properties in February, up 4% from the previous month and 11% from a year ago. Meanwhile, real estate-owned properties, or REOs, which are homes unsold at foreclosure auctions and taken over by lenders, spiked year-over-year in three states: South Carolina (up 51%), Missouri (up 50%) and Pennsylvania (up 46%).
Despite foreclosure activity trending up nationally and certain areas of the country seeing notable annual increases in REOs, experts generally don’t expect to see a wave of foreclosures in 2024.
“Foreclosure activity is still only at about 60% of pre-pandemic levels … and isn’t likely to be back to 2019 numbers until sometime in mid-to-late 2024,” says Sharga.
The biggest reasons for this, Sharga explains, are the strength of the economy—we’re still seeing low unemployment and steady wage growth—along with excellent loan quality.
Massive home price growth in homeowner equity over the past few years has also helped reduce foreclosures.
Sharga says that some 80% of today’s homeowners have more than 20% equity in their property. So, while there may be more foreclosure starts in 2024—due in part to Covid-era mortgage relief programs phasing out—foreclosure auctions and lender repossessions should remain below 2019 levels.
When Will Be the Best Time To Buy a Home in 2024?
Buying a house—in any market—is a highly personal decision. Because homes represent the largest single purchase most people will make in their lifetime, it’s crucial to be in a solid financial position before diving in.
Use a mortgage calculator to estimate your monthly housing costs based on your down. But if you’re trying to predict what might happen next year, experts say this is probably not the best home-buying strategy.
“The housing market—like so many other markets—is almost impossible to time,“ Divounguy says. “The best time for prospective buyers is when they find a home that they like, that meets their family’s current and foreseeable needs and that they can afford.”
Gumbinger agrees it’s hard to tell would-be homeowners to wait for better conditions.
“More often, it seems the case that home prices generally keep rising, so the goalposts for amassing a down payment keep moving, and there’s no guarantee that tomorrow’s conditions will be all that much better in the aggregate than today’s.”
Divounguy says “getting on the housing ladder” is worthwhile to begin building equity and net worth.
Frequently Asked Questions (FAQs)
Will declining mortgage rates cause home prices to rise?
Declining mortgage rates will likely incentivize would-be buyers anxious to own a home to jump into the market. Expect this increased demand amid today’s tight housing supply to put upward pressure on home prices.
What will happen if the housing market crashes?
Most experts do not expect a housing market crash in 2024 since many homeowners have built up significant equity in their homes. The issue is primarily an affordability crisis. High interest rates and inflated home values have made purchasing a home challenging for first-time homebuyers.
Is it smart to buy real estate before a recession?
If you’re in a financial position to buy a home you plan to live in for the long term, it won’t matter when you buy it because you will live in it through economic highs and lows. However, if you are looking to buy real estate as a short-term investment, it will come with more risk if you buy at the height before a recession.
The most anticipated economic report of the month showed that inflation has not just stalled, but increased. The news almost certainly rules out a rate cut in June, and traders are increasingly skeptical there will be more than a couple cuts in 2024, if any at all.
Consumer prices in March were up 3.5% from a year earlier, up from 3.2% in February, according to data released by the Bureau of Labor Statistics on Wednesday. This marks the second month in a row of rising inflation and represents the biggest jump since August.
Core inflation, the Fed’s preferred inflation measure, stayed at 3.8% annually in March, unchanged from February. The Fed’s target for core inflation remains 2%. On a monthly basis, the index increased by 0.4% in March, unchanged from February’s rate.
This month’s inflation reading is the last set of price data officials will see before their April 30-May 1 meeting. While officials are on track to hold rates steady at the next Federal Open Markets Committee meeting, the next inflation data, set for release on April 26, could shape the debate over what to do at the subsequent meeting in June.
“Inflation is down from the high of 9.1% in June 2022, but it is not down far enough for the Federal Reserve to begin cutting interest rates,” Bright MLS Chief Economist Lisa Sturtevant, said in a statement. “The Fed is looking for core inflation to be at 2% before it lowers the federal funds rate. The rationale is that prices are increasing too fast because demand is still too strong, and higher interest rates are needed to cool that demand and bring prices down.”
Uncertainty looms over the Federal Reserve’s timeline for initiating cuts to its benchmark federal-funds rate. Many traders predicted up to seven rate cuts at the beginning of 2024, now many are betting on one or two—or none, especially after the release of the latest jobs report.
The index for shelter and gasoline accounted for 50% of the monthly increase in the index for all items in March. The annual rent inflation in March was 5.7%, unchanged from last month and still high enough to help keep inflation elevated.
“Rents have been coming down in many parts of the country as record levels of new apartments were delivered in 2023,” Sturtevant said. “However, data on rents enter the CPI calculation with a lag—sometimes by as much as 12 to 18 months. So, we might not see the effect of lower rents in the CPI until this summer or fall, which means hitting a 2% target won’t be possible until at least then.”
Since the strong March labor market reading, interest rates have posted a general upswing, with the 10-year moving toward 4.4%, its highest yield since November. Meanwhile, mortgage rates have steadied recently.
Shelter costs are known for keeping inflation artificially high, the consumer price index minus shelter stood at 1.9% in March, thesixth month in a row below 2%.
“By sticking hard-and-fast to its inflation target, the Fed risks waiting too long to lower interest rates and is not taking into account the particular way in which the housing market is driving inflation,” Sturtevant said.
RICHLAND TWP., Pa. – Phillies, Eagles, Flyers and 76ers fans have a new spot to score jerseys, hats and other gear in upper Bucks County.
Rally House, a specialty sports store chain offering an expansive selection of apparel, gifts, home decor and other types of merchandise representing local NCAA, NFL, NBA, MLB, NHL and MLS teams, opened its newest location last week at 244 N. West End Blvd. in Richland Township.
The new store fills the space previously occupied by Tuesday Morning, a home goods retailer, in the Trainer’s Corner shopping center, just outside Quakertown.
Rally House Trainers Corner, located between Petco and Harbor Freight, is the company’s 15th store in the Philadelphia region and first location in the Quakertown area.
“Fans have been coming by all week and couldn’t wait to see us open!” said Ashley Bear, Rally House’s district manager, in a news release. “Once we opened, customers were in awe right when they stepped in about the size of the store and selection of product and teams to shop.”
Rally House traces its origins to 1989, when Tim and Mabel “Peg” Liebert started “Mabel’s Kitchen,” a catalog featuring Kansas-related apparel, gifts and other merchandise.
Mabel’s Kitchen evolved into another business, “Kansas Sampler,” which featured five Kansas City area stores selling Kansas Jayhawks, Kansas State Wildcats, Kansas City Chiefs and Kansas City Royals gear.
The company experienced great success, and the Lieberts eventually decided to expand the business to other markets under the “Rally House” name in 2008, according to a company description.
Today, the Kansas-based Rally House has more than 190 locations across 18 states.
The new Quakertown area store supplements more than a dozen other regional locations, including a Lehigh Valley shop in Lower Macungie Township, two other Bucks County stores and several locations in Montgomery County.
Rally House stays true to its roots by providing “an impeccable selection of local and team-related apparel and gifts, including exclusive designs available only at Rally House,” according to the company’s website.
Regional stores offer a wide array of merchandise, including clothing, blankets, glassware and signs, featuring logos and designs of local NCAA, NFL, MLB, NBA, NHL, and MLS teams in addition to locally inspired apparel, gifts and food.
“Customer satisfaction is a top priority for Rally House Trainers Corner, so this location carries only the best brands available, including big names such as ’47, Antigua, New Era, Nike, and Tommy Bahama,” the news release states.
“Fans will also appreciate the vast selection of teams in stock, like the Philadelphia Phillies, Flyers, 76ers, Union, and Eagles, as well as area college teams with Penn State, Temple, Villanova, and more.
Customers can browse apparel such as T-shirts, sweatshirts, coats and shorts, along with footwear and fashion accessories such as slippers, hats, scarves and jewelry.
A wide variety of other gifts and home decor include items such as glassware, coasters, stickers, magnets, wall plaques, license plate frames, plush toys, socks and baby items.
No two Rally House stores are identical.
“They each carry merchandise customized and tailored to the specific collegiate and professional teams in that area,” a message on the company’s website reads.
“In additional to team apparel, Rally House offers a wide selection of local styles. This includes our very own exclusive line of RALLY Brand™ merchandise. The same items we have in our stores can also be found online at any time. We want to make things as easy and seamless as possible for fans who want to show their unique team spirit, regardless of wherever they live or shop.”
In addition to selling items relating to local sports teams, Rally House also works in conjunction with local sports stars and celebrities. These partnerships manifest themselves in the form of ticket giveaways, autograph sessions, radio remote contests and meet-and-greet events.
The Rally House Trainers Corner store is open 10 a.m. to 9 p.m. Monday through Saturday and 11 a.m. to 6 p.m. Sundays.
For more information, call 215-804-4298 or visit the store’s website.
LOS ANGELES (AP) — Home loan borrowing costs fell for the second week in a row, pulling the average long-term U.S. mortgage rate to its lowest level since early February — good news for prospective home shoppers as the spring homebuying season gets underway.
The average rate on a 30-year mortgage dropped to 6.74% from 6.88% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.60%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, pulling the average rate down to 6.16% from 6.22% last week. A year ago it averaged 5.90%, Freddie Mac said.
“Despite the recent dip, mortgage rates remain high as the market contends with the pressure of sticky inflation,” said Sam Khater, Freddie Mac’s chief economist. “In this environment, there is a good possibility that rates will stay higher for a longer period of time.”
The recent pullback in rates follows a string of rate increases. Mortgage rates rose for most of February as stronger-than-expected reports on inflation and the economy fueled speculation among bond investors that the Federal Reserve would have to hold off on cutting interest rates longer than expected.
The Fed has signaled that it will likely cut its key interest rate this year, once it sees more evidence that inflation is falling sustainably back to its 2% target. The Fed’s main interest rate is at its highest level since 2001.
Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.
Economists expect that mortgage rates will ease further this year, though most forecasts have the average rate on a 30-year mortgage going no lower than 6% by the end of the year. But that’s not likely to happen until the Fed begins cutting its short-term interest rate, something Wall Street is largely betting won’t happen until June, according to data from CME Group.
Despite the choppy trajectory in mortgage rates this year, the average rate on a 30-year home loan is still down from the 23-year high of 7.79% it reached in late October.
“Rates are much lower than they were last fall when they hovered near 8%,” said Lisa Sturtevant, chief economist at Bright MLS. “Any downward trend in rates later this spring will bring more buyers and sellers into the market.”
The decline in rates since their peak last fall has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale.
Lower rates helped lift sales of previously occupied U.S. homes by 3.1% in January versus the previous month to the strongest sales pace since August.
Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 4.16%. That large gap between rates now and then has helped limit the number of previously occupied homes on the market by discouraging homeowners who locked in rock-bottom rates from selling.
Are you looking for the best low stress jobs? If you currently dread going to work and are looking for something new, here’s where to start. If your current job is too stressful, you may be thinking about switching to something less intense. Lots of jobs pay well without making you feel anxious or burned…
Are you looking for the best low stress jobs? If you currently dread going to work and are looking for something new, here’s where to start.
If your current job is too stressful, you may be thinking about switching to something less intense. Lots of jobs pay well without making you feel anxious or burned out all the time.
Whether you’re making online content, helping people get fit as a personal trainer, or organizing medical records, there are many options for a job that helps you stay calm and relaxed.
Recommended reading: 40 Best Jobs Where You Work Alone
Best Low Stress Jobs
There are many low stress jobs listed below. If you want to skip the list, here are some jobs that you may want to start learning more about first:
Below are the best low stress jobs.
Note: While these jobs are low stress for some, they may not be for all. There may be a certain aspect of it that may make it low stress for you, such as being able to work alone, being able to work from home, having a flexible schedule, or doing something that you enjoy. But, nearly all jobs have some sort of stress that is a part of the job, so that is something to keep in mind. And, that doesn’t mean that these jobs are easy. Many of the jobs below are still quite difficult, requiring schooling (even getting your doctorate degree!) and hard work.
1. Blogger
If you enjoy writing and sharing ideas, becoming a blogger might be the perfect low stress job for you.
As a blogger, you have the freedom to create content on topics that interest you. Whether it’s personal finance, cooking, travel, tech, or any hobby, your blog is a space to express yourself.
I started my blog, Making Sense of Cents, in 2011 without much planning. I just wanted to talk about my own experiences with money. Surprisingly, since then, I’ve made over $5,000,000 from it. And now, blogging is my main job!
I really enjoy being able to blog full-time, and it’s much less stressful than the previous day job I had. But, it is still running my own business, so there are other stresses that come along with that, of course.
But, there are many positives as well! I can work alone, I get to make my own schedule, I am my own boss, I get to do the work that I choose to do, and I can work from home. I have an amazing work-life balance, and I wouldn’t trade this job for anything else.
So, what’s a blog? Well, it’s like what you’re reading now – it’s writing on a website. You can write a blog about something you really like, something you know a lot about, or even something you want to learn more about. People like to read blogs because they get to follow along with someone’s real experiences and journeys!
You can learn how to start a blog with my free How To Start a Blog Course (sign up by clicking here).
2. Sell printables
Selling digital printables online is a great way to work from home with less stress and make money.
Creating printables can be a less stressful job because you only need to make one digital file for each product, and then you can sell it many times. It’s also not expensive to start because all you need is a laptop or computer and an internet connection.
Plus, you can do all of this from home and on your own time.
Printables are things you can get on the internet and print at home. They could be games for a bridal shower, lists for groceries, planners for managing money, invites for events, quotes you can hang on your wall, or designs you can use for crafting.
I recommend signing up for Free Training: How To Earn Money Selling Printables. This free workshop will give you ideas on what types of printables you can sell, how to get started, the costs of starting a printables business, and how to make money.
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
3. Bookkeeper
Bookkeepers handle money matters for businesses, and they write down sales, keep track of expenses, and create financial reports.
This job allows you to work independently, earning a typical salary of $40,000 or more each year. You’ll mainly work with numbers instead of interacting with people.
Many bookkeepers like their jobs because they work regular hours and don’t have as much pressure as some other jobs.
You don’t need a college degree to start as a bookkeeper either. This is something that you can learn to get started, as there are no education requirements.
You can join the free workshop that focuses on finding virtual bookkeeping jobs and how to begin your own freelance bookkeeping business by signing up for free here.
Recommended reading: How To Find Online Bookkeeping Jobs
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This free training will teach you what you need to know to become a virtual bookkeeper and make money from home.
4. Proofreader
If you already enjoy reading articles or books and spotting errors, then you may find this job interesting.
A proofreader’s main task is to read content and look for mistakes in spelling, grammar, and punctuation. They’re the last line of defense, ensuring that everything reads perfectly before it goes out into the world. Many proofreaders enjoy the flexibility this job has, as they can often set their own hours and work from where they feel most comfortable.
Many writers, website owners, and students hire proofreaders to improve their work. There’s a big demand for proofreaders, and you can find jobs on different sites.
Even the best writers can make errors in grammar, punctuation, and spelling. That’s why hiring a proofreader can be extremely helpful for almost everyone.
In fact, I have a proofreader for my blog. Even though I write all day long, I know that it is very important to have a proofreader go through everything that I write.
If you want to become a proofreader, I recommend joining this free 76-minute workshop focused on proofreading. In this workshop, you’ll learn how to begin your own freelance proofreading business.
Recommended reading: 20 Best Online Proofreading Jobs For Beginners (Earn $40,000+ A Year).
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This free 76-minute workshop answers all of the most common questions about how to become a proofreader, and even talks about the 5 signs that proofreading could be a perfect fit for you.
5. Transcriptionist
Transcriptionists listen to recordings and type out what they hear.
Becoming a transcriptionist is a low stress job if you’re looking for flexibility in terms of work schedules and the comfort of working from your own space.
Online transcriptionists typically earn between $15 to $30 per hour on average, with new transcribers usually starting at the lower end of that range.
A helpful free training to take is Free Workshop: Is a Career in Transcription Right for You? You’ll learn how to get started as a transcriptionist, how you can find transcription work, and more.
Recommended reading: 18 Best Online Transcription Jobs For Beginners To Make $2,000 Monthly
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
6. Software developer
A software developer is a person who designs, creates, tests, and keeps up software applications, systems, and programs. They’re good at programming languages and frameworks, using their skills to make solutions that meet specific needs or solve problems.
Software developers work in different fields like technology, finance, healthcare, and entertainment. They work with other team members like designers, engineers, and project managers to finish software projects well and meet the needs of users.
I know many software developers who enjoy what they do. While it is a hard job, many of them are able to work from home, travel whenever they want, and they tend to enjoy solving complex technical issues.
Other less stressful jobs in a related field include becoming a computer systems analyst, software architect, computer hardware engineer, and web developer. For these jobs, you may need a bachelor’s degree in software engineering, computer science, or a related field.
7. Massage therapist
If you’re looking for a stress-free job that lets you help others, think about being a massage therapist. Massage therapists use their hands to ease pain, help people relax, and help people feel less stressed.
Massage therapy might be a little less stressful for you because the atmosphere at work is usually calm (after all, that’s why people are going there – to relax!), and you don’t bring work home with you (so, no late night phone calls from clients!).
Massage therapists usually work in places like spas, wellness centers, or chiropractic clinics. Some may also have their own private businesses or have mobile services, which lets them have a more flexible schedule and be their own boss.
To become a massage therapist, you will need to go to school for massage therapy and pass a state exam. This typically takes around 6 months to 2 years to complete (it depends on the state you live in).
8. Personal trainer
Personal trainers help people with their fitness and being more healthy, which can mean creating workout plans, motivating them to work out, or showing the right way to lift weights.
Personal trainers work in a gym, hospital, or even go solo as a freelancer.
This job has some flexibility, which is something that many personal trainers like. You get to choose who you train, where you work, and when you have sessions. Plus, you’re not stuck at a desk all day, which keeps things fresh and fun.
9. Dental hygienist
Dental hygienists clean teeth, check for things like cavities or gum disease, and teach patients the best ways to brush and floss.
You can start this career with an associate’s degree, which usually takes about two years to finish. Plus, you may be able to make over $75,000 a year as a dental hygienist.
10. Medical records technician
If you’re in the job search for low stress jobs in healthcare, then becoming a medical records technician may be for you.
Medical records technicians handle health information data, and they make sure that all the records (both electronic health records and paper files), such as patient history, test results, and treatments, are accurate, accessible, and secure.
It’s low stress because, unlike some roles in medicine, you won’t be on the front lines dealing with emergencies. Your work environment is typically calm, allowing you to focus on your tasks without the pressure of patient care.
To become a medical records technician, you typically only need a high school diploma, but some employers may want to see a certificate related to the field or higher education.
11. Optometrist
An optometrist is an eye doctor who helps people see better. They check your eyes, find out if you need glasses, and help keep your eyes healthy.
You may like being an eye doctor because:
You usually work regular hours. People don’t typically have optometrist emergencies.
The pay is great.
It’s usually a relatively calm job.
Plus, according to the Bureau of Labor Statistics, the median salary for optometrists is over $125,000 a year, and there is expected to be a 9% job growth outlook over the next decade.
12. Physicist
Physicists study the laws and principles that govern the universe, like gravity and motion, and how they apply to everyday life.
Most physicists work in research and development. Some work in offices, while others spend time in laboratories. There are also those who teach at universities.
The job comes with a reasonable stress level, as physicists frequently engage in deep thinking rather than dealing with tight deadlines or high-stress situations, and they typically conduct research. This can make for a fulfilling and low-pressure work environment if you enjoy physics.
To be a physicist, you will likely need a Ph.D. That means a lot of school, but it’s worth it if you love science and discovery.
13. Statistician
Being a statistician might be a perfect choice for your career if you love numbers and data.
Statisticians analyze data and identify patterns, such as by taking a bunch of numbers and turning them into useful information that companies can use to make decisions. Statisticians also might collect data from surveys and experiments.
Statisticians usually have pretty regular hours and it’s normally a quiet place to work, so you can focus just on your tasks without a bunch of noise. Plus, it’s not a job that is typically rushed, so you can take your time.
14. Mathematician
If you love numbers and problems that make you think, a related field to the above may be becoming a mathematician.
Mathematicians use mathematics to unravel patterns and address significant questions.
Mathematicians are needed in many different fields like academia, government, finance, and technology.
In academia, they work as professors and researchers, studying both theoretical and practical math ideas. Government agencies like NASA and the NSA hire mathematicians for jobs like exploring space and analyzing statistics. Financial companies hire mathematicians to make algorithms for things like evaluating risk, pricing items, and creating trading strategies. Also, big tech companies like Google and Microsoft use mathematicians to develop algorithms and analyze data.
15. Librarian
Becoming a librarian is a great job for someone who likes quiet places and books.
Being a librarian is not just about checking out books. It’s a role that’s all about helping people find information and enjoy reading.
Your main job as a librarian would be to help people find the books or online resources they need. You also get to put together fun programs, like story time for kids or book clubs. Keeping the library in tip-top shape is part of your work too, like putting books back on the shelves, managing schedules for employees and volunteers, and making sure everything is where it belongs.
Libraries are usually calm and quiet, which can make it stress-free for you. This makes your workplace quite relaxing, which is great if loud and busy spots make you feel stressed. Plus, you get to have a regular schedule.
Most librarian jobs need a bachelor’s degree at the minimum and sometimes, you will most likely need a master’s degree in library science (MLS) from an accredited program.
Librarians work in many places, such as public libraries, schools, law firms, universities, and more.
16. Orthodontist
One of the best high-paying jobs for people who don’t like stress is becoming an orthodontist.
An orthodontist is a specialized dentist who focuses on fixing teeth and jaw alignment problems. They help patients get straighter smiles and better oral health using treatments like braces, clear aligners, and retainers.
Orthodontists get extra training after dental school to become experts in diagnosing and treating issues like misaligned bites and other dental problems.
By carefully checking each patient, orthodontists make personalized plans to straighten teeth properly, leading to better-looking smiles and improved function of the teeth and jaws.
Being an orthodontist can be pretty low stress since they usually have a set schedule, seeing patients for regular appointments instead of dealing with sudden dental emergencies.
17. Groundskeeper/gardener
Becoming a groundskeeper or a gardener could be a great fit for you if you like being outside and want a stress-free job. You get to work with plants and make outdoor spaces look beautiful. This job is perfect if you’re looking for something that lets you enjoy fresh air and doesn’t have you sitting at a desk all day.
Here are some things that a groundskeeper or gardener may do:
Take care of plants and grass by watering, weeding, and trimming.
Make sure gardens look neat and are healthy.
Sometimes work with tools and machines, like lawn mowers and trimmers.
Shovel snow or take care of indoor plants.
This is one of the best low stress jobs because it is usually quiet, which makes it great for people who get overwhelmed by noisy places.
Recommended reading: 15 Outdoor Jobs For People Who Love Being Outside
18. Audiologist
Audiologists help people with their hearing, and this includes testing hearing, picking out hearing aids, and teaching people how to use them.
This is typically a low stress career choice because you get to work in an office and do similar tasks each day. You are not usually rushing around, instead you have a lot of calm one-on-one time with patients.
Audiologists work in different places like hospitals, clinics, private practices, schools, and research institutions.
19. Pet sitter
Becoming a pet sitter is a great job if you like animals and enjoy caring for them. This is a job that doesn’t typically have a lot of stress because it is not fast-paced. Plus, if you like pets, then you probably enjoy being around them, which can make the job fun.
A pet sitter’s main job is to look after pets while their owners are away. This might mean feeding them, giving them water, and playing with them. It’s important to make sure the pet feels happy and safe when their owner isn’t home.
You might have pets come to your home, or you can go to their owners’ place (this is something that is agreed upon beforehand). Dog walkers typically earn around $20 for every hour they spend walking a dog. Taking care of someone’s pet overnight can earn a person around $25 to $100 or even more each day.
I have used many pet sitters over the years for my dogs, and they all seemed to love what they do. Plus, my mother-in-law is a pet sitter as well, and she enjoys her time with the dogs that she takes care of.
20. Stock photo photographer
Stock photo photographers take photos of things like people, businesses, animals, and more, and sell them for other people to use.
Stock image sites are some of the most popular platforms for photographers to sell their pictures. These websites allow customers to purchase images for purposes such as websites, TV shows, books, and social media accounts. You can take a look at some of the stock photos I’ve purchased within this blog post as examples.
Stock photo photographers typically work by themselves, and this job can be done without much interaction with others. Most of the tasks involve using a camera and then uploading photos to a website.
As a stock picture photographer, you get to set your own schedule. This means you can choose when and where you work.
One great thing about stock photo sites is that they can be a great form of passive income. You can take pictures, upload them, and continue to earn money from those photos for months or even years into the future. Since everything is online and mostly automated, there’s no need to talk with anyone directly.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
21. Freelance writer
Freelance writers create content for clients, including blog posts, advertising materials, and more.
It’s common for freelance writers to work independently, receiving topics from clients and submitting their completed work. Occasionally, they may receive feedback, such as suggestions for improvement, but this is usually the extent of human interaction they’ll have.
This is one of the best low stress jobs from home where you work alone.
I have been a freelance writer for many years and I enjoy this job a lot. I get to work from home, make my own hours, work alone, and choose the topics that I write about.
Recommended reading: 14 Places To Find Freelance Writing Jobs As A Beginner
22. Graphic designer
A graphic designer is someone who creates designs for individuals and businesses.
They create things such as images, printables, planners, T-shirt designs, calendars, business cards, social media graphics, stickers, logos, and more.
Graphic designers tend to have the freedom to set their own schedules, especially if they work as a freelancer. This job allows you to work at your own pace, and most of the time, you don’t have to deal with rush hour traffic or crowds since a lot of graphic designers can work from home.
23. Hairstylist
We’ve all been to a hairstylist, so I don’t think I need to describe this job too, too much. Hairstylists cut, style, and take care of hair.
Hair styling is lower stress because you work with clients in a relaxed setting. Also, you don’t have to sit at a desk all day – you move around and talk with people.
Plus, you can set up your day the way you like it. If you want, you can take breaks between clients. This means you won’t feel rushed and can enjoy your work more.
24. Social media manager
Social media managers engage with people online and share news, pictures, and videos on behalf of a company.
You may find this to be a low stress job because you mostly type on a computer or phone as a social media manager. So, if talking in front of people makes you nervous, this could be the perfect job. Plus, you can often work from home.
25. Virtual assistant
One of my first side gigs was working as a virtual assistant, and it was both enjoyable and flexible for earning income.
While you have a boss as a VA, many of the tasks you handle will require you to take the lead and complete them independently, usually from your own home.
A virtual assistant is someone who assists people with office tasks remotely, whether from home or while traveling. This could involve tasks such as responding to emails, scheduling appointments, and managing social media accounts.
Recommended reading: Best Ways To Find Virtual Assistant Jobs
26. Litter cleanup worker
This is one of the least stressful jobs.
If you have a business, it’s important to keep it clean and neat. No one likes seeing trash scattered about when they’re shopping, correct?
That’s why some business owners pay someone to tidy up before their business opens. A clean space makes the place look inviting and pleasant for customers.
This low stress job without a degree can be started all by yourself, and you can earn around $30 to $50 for every hour you work. It’s quite straightforward too. All you’ll need is a broom, a dustpan, and some tools to help you pick up litter more easily.
People like this job because they can work alone and it’s easy to clean an area up.
Recommended reading: How I Started A $650,000 Per Year Litter Cleanup Business
27. Economist
Economists examine how goods and services are made, shared, and used within an economy. They use different tools, like math and stats, to grasp and predict economic patterns and actions.
Economists might work for the government, giving advice to policymakers on things like money policies and taxes. They also help businesses by explaining market trends, so they can make good decisions about prices, production, and investments.
A somewhat related field to this would be becoming an economics professor.
28. Astronomer
Astronomers study objects and events in space beyond Earth’s atmosphere, like stars, planets, galaxies, and cosmic happenings such as black holes and supernovas.
They use a mix of observations, data analysis, and theoretical models to learn about the origins, changes, and behaviors of these objects. Astronomers usually use advanced telescopes, both on the ground and in space, to observe and gather data from far-off parts of the universe.
They also work with physicists, mathematicians, and engineers to create new technologies and tools for exploring space. Through their work, astronomers help us understand big questions about the universe, like how old it is, what it’s made of, and what will happen to it in the future.
Unlike many jobs, being an astronomer means regular hours with few surprises. Plus, the quiet of a lab or observatory is perfect for staying focused and calm.
29. Actuary
Actuaries assess and handle financial risks by using math and stats to analyze data and forecast future events.
They mainly work for insurance companies, pension funds, and financial consulting firms. Actuaries examine how likely events like death, illness, accidents, and natural disasters are to happen, and what impact they could have on insurance policies and pension plans.
Based on their analysis, they help create insurance policies, decide on premiums, and suggest investment plans to make sure these financial products stay stable and have enough coverage for customers.
If you enjoy numbers and are looking for a job that’s pretty easy on stress, becoming an actuary could be a smart move. Actuaries help businesses look into the future and protect against loss.
30. Radiologist
If you’re interested in a career in the medical field that is both high-paying and considered to have lower stress, you might want to think about becoming a radiologist.
Radiologists specialize in diagnosing and treating diseases and injuries using medical imaging techniques like X-rays, CT scans, MRI scans, ultrasound, and nuclear medicine. They analyze images to find any abnormalities and give detailed reports to other doctors, helping with patient diagnosis and treatment plans.
Radiologists work closely with other healthcare professionals to make sure they understand the imaging results and can provide the best care for patients.
31. Data entry clerk
Data entry is one of the easiest low stress jobs without a degree needed.
Data entry clerks input, edit, and verify data in databases or spreadsheets. They enter details like numbers and names into computers to maintain organization and records.
This job can often be done remotely and independently, with little supervision or interaction with customers. For some people, this is key to having a stress-free job, and I completely get it – this is what I want as well!
Data entry positions generally pay around $15 to $20 per hour.
Recommended reading: 15 Places To Find Data Entry Jobs From Home
32. Yoga instructor
If you love helping others relax and stay fit, being a yoga instructor could be the perfect job for you if you want to find fun low stress jobs.
Yoga instructors lead classes and sessions in practicing yoga, a holistic discipline involving physical postures, breathing exercises, relaxation techniques, and meditation.
They help students through different yoga poses, focusing on correct alignment, breath control, and mindfulness. Yoga instructors create a welcoming environment where students of all levels can explore and improve their practice.
33. Dietitian
A dietitian talks to clients about their eating habits and helps figure out the best way to eat healthy.
Being a dietitian is usually not too stressful. You get to chat with people one-on-one or in small groups. You don’t have to rush around or handle dangerous equipment.
They can work in places such as hospitals, clinics, schools, community health centers, and food service establishments.
Frequently Asked Questions
Below are answers to common questions about how to find low stress jobs.
What’s the least stressful job?
The least stressful job will depend on your personality, as everyone is different. Some less stressful jobs include writing online, gardening, selling printables, and data entry. For me, I really like blogging, and I think it’s a great stress-free career that you can do at home.
How do I find a peaceful job?
If you want a peaceful job that doesn’t have a lot of stress, then I recommend first thinking about what you would find peaceful in a career, such as by looking for jobs with fewer deadlines and less contact with lots of people. Jobs where you can set your own pace, like a blogger or a freelancer, tend to have a peaceful workday. Think about what makes you feel calm, and then look for jobs that match that feeling.
What job is the easiest and pays the most?
Some jobs that are pretty easygoing and also pay well include orthodontist and optometrist. These jobs usually have regular hours and don’t need you to rush around. Plus, they pay more than enough to help you save for those things you love to buy.
What types of work-from-home jobs are low stress?
Working from home can be really laid back when you’re doing something like freelance writing, blogging, transcribing, or graphic design. You can pick the jobs you want and work when it suits you best.
What are the best low stress jobs for introverts?
If you’re quiet or introverted, then you might be interested in jobs where you can work solo or with just a few people. Jobs like a bookkeeper, transcriptionist, or data entry let you focus on your work without having to talk to many people.
What are high-stress jobs?
Some of the most stressful jobs include being a nurse, police officer, surgeon, social worker, anesthesiologist, firefighter, lawyer, airline pilot, paramedic, and in the military.
Best Low Stress Jobs – Summary
I hope you enjoyed this article on the best low stress jobs.
Nowadays, people are realizing how important it is to balance work and personal life and to take care of their mental health while lessening their anxiety about work. Some occupations, like software development and data entry, have this balance and a sense of calm.
Professionals such as dental hygienists, librarians, and dietitians also enjoy low stress roles with predictable schedules.
You don’t have to give up peace of mind to have a career. By thinking about what you’re good at and what you enjoy, you can find jobs that meet your goals while keeping stress levels low.
For me, I personally love having a career that has low stress. While it is still hard, I love that I can work from home, choose the work I do, and have a flexible schedule – all things that help me be less anxious and happier about the work that I do.
The National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA) are asking federal housing officials to confirm their treatment of interested party contributions (IPCs) to home purchase transactions.
In a letter addressed to Federal Housing Finance Agency (FHFA) director Sandra Thompson, Fannie Mae CEO Priscilla Almodovar, Freddie Mac CEO Michael DeVito, and Federal Housing Administration (FHA) commissioner Julia Gordon on Wednesday, the NAR and MBA wrote that it was important for the agencies and government-sponsored enterprises (GSEs) to review NAR’s commission lawsuit settlement agreement.
They asked the federal officials to “provide guidance to market participants that will ensure these new arrangements will continue to be supported by” FHA and GSE underwriting standards.
At the moment, IPCs “include concessions from the seller to the buyer for items that are traditionally paid by the buyer such as loan closing costs or rate buy-downs,” but as buyer agents are customarily paid by the listing agent, their fees are excluded from caps on the IPCs.
Under existing FHA policy, for example, if sellers continue to pay buyer-side real estate agent commissions and fees as a matter of state or local laws or customs — and if the commissions and fees are reasonable in amount — these payments would not be treated as interested party contributions provided all other requirements are met.
Under the terms of NAR’s settlement agreement, the practice of cooperative compensation is still allowed, but it cannot be offered through a Multiple Listing Service (MLS). Sellers or buyers can pay the buyer’s agent’s fees.
“Consequently, once the settlement is in effect, we believe that FHA and GSE policy should continue to exclude seller or listing agent payment of buyer agents’ commission from IPCs,” the NAR and MBA wrote. “Confirming your policies and maintaining this practice will sustain the current flow of mortgage capital to home buyers without change or delay.”
The two trade organizations urge federal officials to provides this certainty now, as they feel it is needed “to prevent disruptions that may cost homebuyers and sellers money and potentially their home purchases.”
NAR also sent a letter to the U.S. Department of Veteran Affairs (VA) on Wednesday, urging it to revise policies that prohibit veterans from paying buyer broker commissions.
The current VA rule states that a borrower using a VA loan cannot pay fees or commissions to a real estate agent unless determined “by the Under Secretary for Benefits as appropriate for inclusion … as proper local variances.”
NAR told John Bell, the executive director of VA’s Loan Guaranty Service, that the current policy would put VA buyers at a disadvantage, as they would potentially be forced to forego professional representation.
Mortgage rates surged closer to 7% this week, a blow to hopeful homebuyers this spring.
The rate on the 30-year fixed mortgage increased to 6.87% from 6.74% the week prior, according to Freddie Mac. Rates tilted higher as inflation remained hotter than expected, leading to the Fed putting off any potential rate cuts until summer.
The uptick in rates caused some rate-sensitive homebuyers to retreat from the market, as affordability remains a top concern for the entry-level pool. Those looking to refinance also backed away from their plans as the chances of grabbing a lower rate slipped away.
Still, housing experts remain hopeful about the direction of affordability as more inventory trickles into the market.
“The housing market continues to face elevated mortgage rates, high prices, and low for-sale inventory,” said Hannah Jones, senior economic research analyst at Realtor.com. “As the spring season approaches, many buyers and sellers are getting warmed up to enter the housing market.”
Demand falters as rates jump higher
As mortgage rates rebounded, both refinance and purchase activity faltered — a recurring theme this season.
The volume of applications to refinance a home fell 3% for the week ending March 15 and was 3% lower than the same week a year ago, according to the Mortgage Bankers Association (MBA).
Demand for refinance had gained surprising momentum in the weeks leading up to March 8, with applications up 12%. The sudden jump in activity was due to a larger 24% increase in the government refinance index, the MBA noted, as homeowners who purchased at top rates last year were closely attuned to any opportunity to snatch a lower rate.
But as rates rebounded this week, that window of opportunity closed.
Read more: Mortgage rates hover around 7% — is this a good time to buy a house?
Purchase applicants also retreated from the market, with the volume of applications to buy a home down 1% for the week and 14% lower than the same week a year ago.
“Most homebuyers are sensitive to interest rates, which is why we see mortgage applications increase when rates fall and decline with rates increase,” said Bright MLS chief economist Dr. Lisa Sturtevant.
“However, not all homebuyers are equally sensitive to interest rates,” she added. “The number of cash buyers has increased. In many markets, these cash buyers are not investors but regular home buyers who have accrued significant equity in an existing home that they can roll over into the purchase of a new home.”
Just getting into a home has become more expensive. Mortgage News Daily, which tracks rates daily, revealed that rates surpassed 7% last week and have remained above that threshold as of March 20.
For first-time homebuyers, in particular, the fluctuation of rates has been a tough blow — especially as inventory of entry-level homes remains scarce and competition for homes within their price point is picking up.
According to the National Association of Realtors, the average price of a previously owned home increased to $384,500 in February, marking the eighth consecutive month of year-over-year price gains. The median price was also 5.7% higher than a year earlier.
“Additional housing supply is helping to satisfy market demand,” said NAR chief economist Lawrence Yun. “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”
Buyers and sellers need to adjust to ‘new normal’ in rates
Mortgage rates were elevated after data last week showed inflation and payroll numbers came in stronger than expected, which fueled concerns about the timing of the Fed’s plans to issue rate cuts this year.
Federal Reserve officials expect three interest rate cuts this year, which should help ease pressure on overall borrowing costs when they come to pass. However, when those rate cuts will happen remains to be seen.
“There is some uncertainty in the housing market as we head into spring,” said Sturtevant. “The Federal Reserve likely will put off rate cuts until the summer, which suggests that mortgage rates will not come down much in the first half of the year. Buyers and sellers seem to be adjusting to the ‘new normal’ of mortgage rates above 6.5%.”
Still, there’s some hope that buyers will see mortgage rates start to ease sooner rather than later.
“As we enter the spring homebuying season, we still anticipate rates will decrease in the coming months,” said MBA president and CEO Bob Broeksmit.
Gabriella Cruz-Martinez is a personal finance and housing reporter at Yahoo Finance. Follow her on X @__gabriellacruz.
Click here for real estate and housing market news, reports, and analysis to inform your investing decisions.
LOS ANGELES — The average long-term U.S. mortgage rate climbed back to nearly 7% this week, pushing up borrowing costs for home shoppers.
The average rate on a 30-year mortgage rose last week from 6.74% to 6.87%, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.42%. The average rate is now just below where it was two weeks ago.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing the average rate last week from 6.16% to 6.21% . A year ago it averaged 5.68%, Freddie Mac said.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans.
“After decreasing for a couple of weeks, mortgage rates are once again on the upswing,” said Sam Khater, Freddie Mac’s chief economist.
Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Federal Reserve does with its short-term interest rate can influence rates on home loans.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage has remained below 7% since early December. Rates eased amid expectations that inflation was cooling enough for the Fed to begin lowering its short-term interest rate by this spring. But a spate of stronger-than-expected reports on inflation, the job market and the economy in recent weeks dimmed that outlook, sending mortgage rates higher through most of February.
Many economists expect that mortgage rates will ultimately ease moderately this year, but that’s not likely to happen before the Federal Reserve begins cutting its benchmark interest rate. On Wednesday, the central bank kept its rate unchanged and signaled again that it expects to make three rate cuts this year, but not before it sees more evidence that inflation is slowing.
“The Fed’s announcement that it is holding interest rates steady for now was not unexpected, but it does mean that mortgage rates are going to remain higher for longer,” said Lisa Sturtevant, chief economist at Bright MLS.
The U.S. housing market is coming off a deep, 2-year sales slump triggered by a sharp rise in mortgage rates and a dearth of homes on the market. The overall decline in rates since their peak last fall has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale this year.
Sales of previously owned U.S. homes rose in February from the previous month to the strongest pace in a year. That followed a month-to-month home sales increase in January.
Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 4.42%. That large gap between rates now and then has helped limit the number of previously owned homes on the market by discouraging homeowners who locked in rock-bottom rates from selling.
Hedging, Client Retention Tools; STRATMOR on the ICE 24 Event; MBA on the NAR Settlement; Dual Compensation
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Hedging, Client Retention Tools; STRATMOR on the ICE 24 Event; MBA on the NAR Settlement; Dual Compensation
By: Rob Chrisman
7 Hours, 19 Min ago
I saw a sign recently: “Psychic Fair Cancelled Due to Unforeseen Circumstances.” No one can see into the future, or can read minds, and communication is always a good thing. But if I had to predict something, mortgage-related fees (what is disclosed, and how, at closing) will be something in which the CFPB would become increasingly interested. The CFPB believes that “junk” fees are driving up housing costs, and wants to hear from you. Regarding costs, many lenders are wondering about the proposed NAR settlement, its costs, and even dual licensing. Will we see an increase in the number of dual licenses with the recent NAR settlement, and what about the states that do not allow a person to maintain both NMLS licenses and Realtor Licenses simultaneously? Attorney Brian Levy addressed dual compensation in one of his Musings. (Found here, this week’s podcast is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Today’s has a roundtable discussion from the ICE conference in Vegas with Brett Brumley, Matt Kovac, Justin Demola, and Rob Chrisman on automation and its benefits to lenders and vendors.)
Lender and Broker Services, Products, and Software
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With the recent commissions’ settlement, loan officers must now reevaluate their engagement strategies with their agent network. The key ingredient in long-term success boils down to something so simple, yet very impactful: building closer relationships with homeowners. That’s why loan officers are turning to the Milestones “Super App,” a powerful platform that delivers white-labeled portals to manage the home, build wealth, and everything in between. The value loan officers can bring to homeowners NOW, in close partnership with their agent network, can help them build profitable, long-term relationships for years. Want to start serving your homeowners better? Talk to Sales.
STRATMOR on Customer Experience
When it comes to customer experience, STRATMOR Group covered all angles this week at ICE Experience 24 in Las Vegas. STRATMOR advisors were a common sight on the conference stages, with Brett McCracken sharing his characteristic bombshell secret shopping insights, Mike Seminari revealing some eye-opening truths about the critical importance of having a clean and simple loan process, Sue Woodard challenging tech vendors to look for ways to add value not only to the lender, but the borrower as well, and Garth Graham encouraging lenders to take a hard look at their compensation models to make sure they “get what they pay for.” Looking to refine your organization’s strategies? Contact STRATMOR today.
MBA’s Role in NAR Settlement
No one wants to harm the fragile first-time home buyer, or further dampen the activity in real estate sales and inventory. The Mortgage Bankers Association weighed in on last week’s announced proposed National Association of Realtors’ settlement. Remember that, despite the furor of news and conjecture, the Settlement is subject to court approval although the MBA states we’re likely see changes to go into effect mid-July 2024. “There is also a possibility that the Department of Justice may weigh in on whether the settlement goes far enough, which could result in changes, delays, or abandonment of the settlement. NAR will continue to update its site with the latest information.
“The MBA will work with NAR and other trade associations to limit possible disruption from the settlement and ensure that its provisions are not overly disruptive to home financing. It is important to understand how a change to buyer paid commissions might impact seller contribution limits and we have already advocated for the Department of Veterans Affairs (VA) to lift its prohibition on veterans’ payment for the buyer side agent.
“The proposed nationwide class of home sellers has reached a $418 million joint settlement with NAR that will resolve claims in some of the antitrust class actions against NAR. The Settlement with NAR is in addition to prior settlements (totaling $208.5 million) reached with defendants Anywhere Real Estate, RE/MAX, and Keller Williams.
“Under the terms of the Settlement, NAR will be responsible for paying $418 million in four annual installments along with interest, for the benefit of home sellers across the United States, as well as $3 million toward settlement notices. It also provides for far-reaching changes to NAR’s rules governing real estate broker compensation and the MLS system.
“NAR’s release does not cover agents affiliated with HomeServices of America and its related companies as they are still litigating. And firms that have a total transaction volume of $2 billion or above are not covered by the Settlement. However, the Settlement creates a framework for these larger firms to opt-in to the Settlement to resolve actual or potential claims against them. A firm that wishes to opt-in to the settlement route must deposit into an escrow account an amount equal to 0.0025 multiplied by its average annual ‘Total Transaction Volume’ over the most recent four calendar years and agree to not to engage in the certain prohibited practices. It is unclear at this stage whether the larger firms will in fact opt-in to the Settlement. A similar opt- in provision exists for independent MLS, with the payment being 100 multiplied by their 2023 subscribers.
“In the Settlement, NAR has agreed to various practice changes which are to begin 120 days after the plaintiffs seek preliminary approval of the Settlement. It will eliminate and prohibit any requirement by NAR and NAR MLSs that listing brokers or sellers must make offers of compensation to cooperating brokers or other buyer representatives, and prohibit and eliminate any requirement that such offers, if made, must be blanket, unconditional or unilateral (effectively, eliminating its rules requiring “cooperative” commissions as a condition of listing a home on the MLS).
“It requires MLS participants working with a buyer enter into a written agreement before the buyer tours a home with the following: (a) specify and conspicuously disclose the amount or rate of compensation to be received or how the amount will be determined, (b) the amount of compensation must be objectively ascertainable… It cannot be open-ended such as ‘buyer broker compensation shall be whatever amount the seller is offering to the buyer,’ (c) MLS participants may not receive compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer.”
The language, “Prohibits NAR MLS participants, subscribers, other real estate brokers, other real estate agents, and sellers from making offers of compensation on the multiple listing service to cooperating brokers or other buyer representatives (either directly or through buyers) or disclosing on the multiple listing service listing broker compensation or total brokerage compensation. It eliminates and prohibits any requirements conditioning participation or membership in a NAR MLS on offering or accepting offers of cooperative compensation.
“Agree not to create, facilitate, or support any non-MLS mechanism for listing brokers or sellers to make offers of compensation to cooperating brokers or other buyer representatives. Require NAR MLS participants acting for sellers to conspicuously disclose to sellers and obtain seller approval for any payment or offer of payment that the listing broker or seller will make to another broker, agent, or other representative acting for buyers. And require MLS participants to disclose to prospective sellers and buyers in conspicuous language that broker commissions are not set by law and are fully negotiable.”
The MBA warned that cooperative commission is not banned; listing brokers and sellers can continue to offer compensation for buyer broker services, just not through the MLS. And the Settlement does not prevent sellers from offering seller concessions through the MLS (e.g., for general buyer closing costs), so long as such concessions are not limited to or conditioned on the use of or payment to a buyer broker.”
The settlement does nothing, unfortunately, to address incompetent, inexperienced real estate agents that do little to promote professionalism, often a complaint from the agent representing the opposite side of the transaction.
Capital Markets
As we mark four years since the big shake-ups caused by the COVID-19 pandemic, the mortgage industry continues to navigate its aftermath, especially in the MBS market. Despite the challenges, there’s been remarkable progress and resilience shown. Vice Capital Markets is one company that has stood firm in the face of adversity, consistently providing steadfast support and innovative strategies to its clients throughout these uncertain times. The company recently shared this video reflecting on the tremendous impact of the pandemic on our industry. If, like me, you’ll be on-site next week at TMC’s The Mane Event in Louisville, Vice Capital President Troy Baars will be on hand to chat about all things capital markets. Drop him a line if you’d like to meet.
Yesterday granted market participants more time to digest the results of this week’s Federal Open Market Committee meeting. As a reminder, the Fed maintained the fed funds rate at current levels and signaled that it would begin cutting this year, which kicked off a post-meeting rally in markets. There’s now more confidence that rate cuts are coming in the second half of the year than there was prior to the meeting. The revised “dot-plot” continues to show the majority of the committee believes that three 25 basis point cuts is the most likely outcome before we close the books on 2024. That said, there were more votes for two 2024 cuts than there were in December.
As far as economic releases, yesterday’s release of flash Manufacturing and Services PMI reading from major economies showed that most pointing to a continued contraction in both sectors. The U.S. was an outlier as both Manufacturing and Services PMI readings indicated an ongoing expansion. Those reports contributed to the early pressure, as did another solid jobless claims reading and a strong existing home sales report.
But existing home sales easily beat expectations and rose 9.5 percent during February. Although historically slow, the 4.38-million-unit pace marks the strongest pace since February 2023, and is likely due to the dip in mortgage rates that occurred at the beginning of the year. Inventory remains tight, but a small swell of new supply hitting the market was another factor driving the faster sales pace.
There is no notable data scheduled for release today but plenty of Fed speakers no doubt reinforcing the message from earlier this week: Chair Powell, Governor Bowman, Fed Vice Chair Jefferson, Fed Vice Chair for Supervision Barr, and Atlanta Fed President Bostic are all scheduled to deliver remarks. We begin the day with Agency MBS prices better .125-.250 than Thursday night, the 10-year yielding 4.22 after closing yesterday at 4.27 percent, and the 2-year at 4.60.
Jobs
“At Evergreen Home Loans, we’re proud of our strong female leadership, with 68 percent of our team being women, including 11 branch managers. We’re on a mission to expand our team with talented Loan Officers who are eager to work in an empowering, supportive environment. Here, you’ll join a group of industry-leading professionals who thrive under the guidance of skilled women leaders. We offer a nurturing space for growth, innovation, and success. If you’re a Loan Officer aspiring to excel in a company that values diversity and leadership, Evergreen Home Loans is your destination. Join us and shape a brighter future in the mortgage industry. To view all job listings, visit Mortgage Jobs.”
“Looking to thrive in the mortgage game? Northpointe Bank has been crushing it for 25 years, leading the charge with a robust product line of traditional, non-QM, and portfolio loans. We’re looking for loan officers and sales teams to join our retail lending team nationwide. Why us? Because we’re not just any bank! Northpointe is like finding a unicorn in the mortgage world: a bank with home lending at its core. Plus, since we’re a bank, there’s no need for loan officers to deal with pesky state licensing. You can originate in all 50 states on day one! Ready to join our winning team? Contact Cody Archer today to hear why Northpointe Bank should be your home.”
As mentioned in yesterday’s Commentary, AmeriHome’s Chief Operating Officer John Hedlund is leaving the company. Also effective April 7, Chief Risk Officer Mark Miller, and Chief Information Officer Dave Andersen, will also be leaving AmeriHome. AmeriHome (the nation’s largest bank-owned correspondent investor) has promoted the following, effective today: Anthony Ho, Managing Director, Chief Credit Officer, Greg McElroy, Managing Director, Chief Operations Officer, Steve Kolker, Managing Director, Correspondent Sales, and Peter Roeske, Managing Director, Retail Lending. AmeriHome Mortgage is a Western Alliance Bank company.
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Dual licensing is one of the opportunities being opened to the mortgage industry by the National Association of Realtors’ (NAR) pending nationwide settlement of commission lawsuits, according to Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA).
“There will be market reactions to this settlement, and it will create openings for other business models where we want the buyer represented, but the seller may not want to pay 3% for a buyer’s agent,” Broeksmit said on Tuesday morning during the MBA’s National Advocacy Conference in Washington, D.C.
“One of those models could be that you, as lenders, license your loan officers as real estate agents and offer the buying agent service for less than a 3% fixed fee point. And some of you will say I want nothing to do with that. Others of you will say that is a great retention opportunity for my loan officers and the market will figure all this out,” Broeksmit added.
On Friday, NAR announced a settlement that includes a $418 million payment for damages, along with a ban on rules that allow a seller’s agent to set compensation for a buyer’s agent.
The settlement also includes eliminating fields that display broker compensation on Multiple Listing Services (MLSs) and ending the blanket requirement that agents subscribe to an MLS to offer or accept compensation. In addition, buyers’ agents must have written agreements.
If approved by a court, the changes will go into effect in mid-July.
On Friday, HousingWire reported that Absolute Home Mortgage is testing out a dual-licensing structure. Matthew VanFossen, CEO of the New Jersey-based lender, said in an interview that loan officers may start getting real estate licenses, and/or buyer agents may become licensed LOs.
It would “bridge the gap in lower commission” by these professionals “starting to take both sides of the deal,” VanFossen said. But if real estate agents transition to becoming lenders, the dual-license trend would also have an “unintended consequence” for marketing servicing agreements (MSAs) between mortgage companies and real estate brokerage firms.
Tax credit, ‘junk fees,’ Marcia Fudge
Broeksmit was critical of President Joe Biden’s housing plan announced during the 2024 State of the Union address on March 7. He said the proposals would “stimulate demand on the single-family side.”
“Any lender in the audience knows that they have a huge list of people who are qualified and able to buy a house; there’s just no inventory. So, we really need to focus on the supply,” Broeksmit said.
During the State of the Union address, Biden called for a $10,000 tax credit for first-time homebuyers and people selling their starter homes.
Broeksmit said that people selling their homes would buy another, so the tax credit would not be enough to improve supply. In addition, people sell houses based on their own circumstances, not because of government tax incentives.
“So, you’re giving money to people who would have sold anyway,” Broeksmit said. “I think a smarter thing to do would be to raise the exemption for the capital gain when you sell your house.”
Broeksmit also reacted to the decision by the Consumer Financial Protection Bureau (CFPB) to closely scrutinize what it described as “junk fees” imposed on borrowers when closing a mortgage.
A recent CFPB blog post stated that families closing a mortgage “often get an unwelcome surprise: closing costs that all too often are full of junk fees.”
According to Broeksmit, the CFPB can only review fees by reopening the TILA-RESPA Integrated Disclosure (TRID) rules, which the industry spent $1 billion to implement. “There’s no such thing as a surprise at closing,” Broeksmit said.
Regarding the resignation of U.S. Department Housing and Urban Development (HUD) Secretary Marcia Fudge, Broeksmit said it’s not unusual for a cabinet secretary to leave before the end of a four-year term. In this case, “it’s a grueling job,” he added.