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Expect 2024 to be mildly better than 2023 with mortgage rates falling in the second half of the year, housing experts opined in their forecasts at the end of the year. Cuts to the Federal funds rate (and subsequently to mortgage rates) are imminent, traders enthused after December’s meeting of the Federal Open Market Committee in which committee members predicted three rate cuts in 2024. Some experts forecasted as many as six rate cuts in the year based on this news. Rate cuts are still coming, just not in March , traders and market experts reasoned more recently as the economy continued to run hot. And now on the heels of reports of stronger than expected jobs growth and stickier than anticipated inflation , the market’s shift from optimism to pessimism over rate cuts is complete. Some even expect rate hikes before rate cuts. The pessimism is visible in mortgage rates. Freddie Mac‘s weekly Primary Mortgage Market Survey is climbing back towards 7%. HousingWire’s Mortgage Rate Center , which relies on data from Polly, is already above 7.2%. Rates were as low as 6.91% for Polly and 6.64% for Freddie as recently as February. On Tuesday, they reached 7.50% on Mortgage News Daily, a high for this year. Mortgage rates hold major power in the housing industry; most importantly, high rates exacerbate the current affordability crisis by walloping the buying power of would-be buyers and discouraging some would-be sellers – those with low, fixed-rate mortgages – from listing their homes, a drain on available inventories. All this leaves housing professionals once again fighting for their share of shrinking pies – as we have observed with recently released mortgage data and RealTrends Verified’s brokerage data , as well as deeper dives on the brokerage landscapes in Jacksonville and San Diego . It is unsurprising, then, that real estate stocks have suffered since the FOMC’s March meeting and the recent job and inflation reports. That includes the nation’s top homebuilders (DR Horton and Lennar), mortgage originators (United Wholesale Mortgage and Rocket Mortgage), brokerages (Anywhere and Compass) and residential search portals (Zillow and CoStar, which owns Homes.com). There are other dynamics at play for some of these companies, however. The brokerages are also contending with the rule changes included in a proposed settlement by the National Association of Realtors; some investors also believe those rule changes advantage CoStar at the expense of Zillow . UWM, meanwhile, is contending with a scathing investigative report by a hedge-fund-affiliated news organization whose hedge fund shorted UWM and went long on Rocket; it is also dealing with pending litigation . UWM denies the allegations made in the report.  High mortgage rates, fewer mortgage applications and fewer home sales are unfortunately not the only effects housing professionals could see from a more prolonged high-rate environment. There are also spillover effects from other industries, especially office real estate. Regional banks – which traditionally have been major residential mortgage originators – went big on commercial real estate loans as larger banks scaled back in this area in recent years. That increased their exposure to downtown office towers, which have seen an exodus of tenants and a bottoming out of appraised values just as a record $2.2 trillion in commercial real estate debt comes due over the next few years. That ties up capital that could otherwise flow to residential mortgages and in some cases stresses banks like New York Community Bank, parent of Flagstar Bank — the 7th-largest bank originator of residential mortgages, 5th-largest sub-servicer of mortgage loans and the 2nd-largest mortgage warehouse lender in the country. Homebuilders, too, feel the effects of prolonged high rates. Although homebuilder confidence is still up significantly since last fall, new housing starts are slowing . The dim prospects for homebuyers have turned some investors to the nascent build-to-rent sector , essentially a bet that high rates are here to stay for long enough that would-be buyers are now would-be renters.

Experts from the University of Texas at Austin and the University of Georgia are weighing in on recent federal attention that senior caregivers have received after President Joe Biden highlighted these issues in his State of the Union address last month. The experts say that adequately serving seniors who prefer to age in place will be a “challenge for generations.” Jacqueline Angel, the Wilbur J. Cohen professor of health and social policy at UT’s LBJ School of Public Affairs; and Toni P. Miles, the pope scholar in residence at the Rosalynn Carter Institute for Caregivers and professor emerita at UGA, co-authored an article that was published in the Waco Tribune-Herald that attempts to address these challenges and the need for more attention and resources. “In high-income countries, a smaller number of families can assume [the caregiving] burden, and in the United States it is increasingly relegated to either the federal or state governments through Social Security, Medicare and Medicaid,” the pair wrote. “In the future, the government will be forced to play an even greater role in the care of dependent citizens. Individuals who are not fully independent will need the intervention and support of several formal and informal sources of support.” The pair pointed out that attention paid to these issues in one of the highest-profile political speeches of the year helps underscore the need for “high-quality, affordable community-based care services to support family caregivers.” Most people do not understand that the Medicare program does not cover long-term care, and the pair contends that many in need of it are not prepared for its high costs . “It provides only a short period of care after discharge from the hospital,” the article reads. “This is far short of what would be needed for an impaired elder to remain at home. The national average cost of a semi-private room in a long-stay home is $105,000 a year, according to a 2023 Genworth Cost of Care Survey .” Because care burdens often fall on family members — particularly for seniors who overwhelmingly prefer to age in place — the pair contends that a “multifaceted approach is necessary and must involve all levels of government, as well as private and charitable organizations.”  Reverse mortgage professionals and retirement advisers have contended that older Americans could help fulfill some of their long-term care needs by using the proceeds from a reverse mortgage. “[A couple I previously profiled] considered a Home Equity Conversion Mortgage (HECM), also called a reverse mortgage, which can provide: 1. Additional cash income to pay for things like LTC premiums or other costs, and 2. Additional liquidity later in life if you pay interest on your HECM,” retirement adviser wrote Jerry Golden in a column published by Kiplinger, a personal finance website. This option helped the couple discover that their retirements could go further than they originally thought. “You might […] find that your retirement plan can pay for more than it could just a few years ago,” Golden said, referencing the couple’s use of a HECM product.

 Rates are moving up now and several factors could be contributing to it, the 1 trillion dollars that the gov't is printing every 100 days could be inflationary. so what I see happening is there will have to be an event that happens to drop rates like we experienced in 2020. We will be paying 1.6 trillion in interest expense annually starting at the end of this year and are said to grow to 3 trillion annually next year. I say rates will have to come down in order for the Gov't to pay the interest expense, kicking the can down the road so to speak. We will have an opportunity to refinance the higher rate we have on our home and also refinance all the credit card debt, installment loans, car loans, and even student loan debt. The probability is great sometime down the road. Continue to watch the videos and when rates do make a significant drop will let my viewers know. Then it comes down to what is the cost vs the savings on a refinance. Opportunities will come just the timing not sure about. tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Baby boomers are exhibiting an overwhelming desire to age in place in their own homes, but their children — largely members of Generation X — are also making their desires felt by seeking out homes that can accommodate their needs as they get older, according to a recent report from the New York Times. Citing 2021 data from the Harvard University Joint Center for Housing Studies that showed 88% of adults 65 and older are aging in place, many members of the following generation — primarily born between the mid-1960s and early-1980s — are already taking proactive steps to by thinking “about where they will live in their 70s, 80s and even 90s,” the Times reported. Homebuilders are observing a rise in demand for homes that can accommodate natural aging from Gen X buyers. David O’Reilly, CEO of Howard Hughes Holdings which constructs planned communities, describes the market being “at the cusp,” saying that the demand appears to be coinciding with more members of Gen X nearing a time where they will become “empty nesters.” “That’s normally the tipping point,” O’Reilly told the Times. Gen X buyers are also more likely to have more financial means and control over their potential options, and are keeping access to necessary later-life services in mind when choosing where to live as they get older, the story explained. “In new developments, [Gen X buyers] are seeking access to health and wellness amenities, like hiking trails and tennis courts, as well as opting for home features like showers instead of bathtubs, for instance, and asking for the latest gadgets to help them as they age,” the reporting said. A report released last week by the National Association of Realtors (NAR) said that Gen X homebuyers have a median income of $126,900, and are still years away from retirement. That additional working time will allow them to amass further wealth according to Jessica Lautz, deputy chief economist and vice president of research at NAR. Members of Gen X are also benefiting from the pandemic and post-pandemic run-up in home prices, carrying significantly more home equity than their millennial counterparts and dwarfing millennial homeownership rates 72% to 55% as of 2023. One analyst said that Gen X buyers are motivated to act now for aging-appropriate housing due to the state of the housing market.  “If they are shopping for homes, given the tightness of the market and remote work, I do believe you see more Gen X-ers seeing a home purchase as a home for the rest of their lives,” said Cristian deRitis, deputy chief economist at Moody’s Analytics to the Times.

VA mortgages, also known as VA loans, are home loans offered to veterans, active-duty service members, and, in some cases, eligible surviving spouses. Here's what you need to know about VA mortgages: Eligibility: VA loans are available to active-duty military personnel, veterans, reservists, National Guard members, and some surviving spouses. Eligibility requirements may vary based on the length and nature of service. No Down Payment: One of the most significant benefits of VA loans is that they typically do not require a down payment, allowing eligible borrowers to purchase a home with 100% financing. Funding Fee: While VA loans do not require mortgage insurance, they do require a funding fee. This fee can be rolled into the loan amount and varies depending on factors such as the down payment amount and whether the borrower has used the VA loan benefit before. No Private Mortgage Insurance (PMI): Unlike conventional loans, VA loans do not require private mortgage insurance, which can save borrowers money on their monthly mortgage payments. Competitive Interest Rates: VA loans often offer competitive interest rates compared to conventional loans, making them an attractive option for eligible borrowers. Flexible Credit Requirements: VA loans typically have more flexible credit requirements compared to conventional loans, making them accessible to borrowers with less-than-perfect credit. Loan Limits: VA loans do have loan limits, which vary by county and are set by the Department of Veterans Affairs. Borrowers can still use a VA loan for a home purchase that exceeds the county loan limit, but they may need to make a down payment for the portion of the purchase price that exceeds the limit. Assumption: VA loans are assumable, which means that if a borrower sells their home, the buyer can take over the VA loan if they are also eligible for VA loan benefits. This can be an attractive feature when selling a home. Refinancing Options: VA loans offer various refinancing options, including the Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA streamline refinance, which allows borrowers to refinance their existing VA loan to obtain a lower interest rate with minimal paperwork and no appraisal in most cases. Property Requirements: VA loans have specific property requirements, including minimum property standards to ensure the home is safe, sanitary, and structurally sound. Preapproval Process: Borrowers interested in obtaining a VA loan should begin by obtaining a Certificate of Eligibility (COE) from the Department of Veterans Affairs. Lenders may also require additional documentation for loan approval. Overall, VA loans can be an excellent option for eligible veterans, active-duty service members, and their families to achieve homeownership with favorable terms and benefits. Didier Malagies nmls212566 DDA Mortgage nmls324329 tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Older Americans who own their home are financially incentivized to stay put, which is likely to worsen the ongoing inventory shortage, two Redfin studies found. In one recent survey , Redfin found that over three-quarters (78%) of older American homeowners (ages 60 and up) are planning to stay in their current home as they age. Meanwhile, about one in five baby boomers (19%) are considering moving into a community with older people or have already done so. Smaller shares of baby boomers are considering moving in with an adult child, moving to an assisted-living facility or moving in with friends. The inertia of baby boomers is making it harder for young Americans to find a family home, according to a Redfin analysis. In fact, empty-nest baby boomers own 28% of three-bedroom homes in the U.S., while millennials with kids own just 14%. Furthermore, nearly 80% of boomers own the home they live in, compared to 55% of millennials. Additionally, 54% of boomers carry no mortgage, and for those who do have a mortgage, nearly all of them have a much lower interest rate than they would if they sold and bought a new home today. According to the April 2024 Mortgage Monitor report from Intercontinental Exchange (ICE), homeowners who took out mortgages with near-record-low rates in 2020 and 2021 face much higher monthly payments even if they move to an equivalently priced home. A “lateral move” of this type would cost 60% more per month, ICE reported. There are now 517,000 single family homes on the market, up by 26% from a year ago, according to data from Altos Research . Inventory has been expanding steadily for 20 weeks in a row but still remains at historically low levels. Mike Simonsen, founder and president of Altos Research, forecasts that there will be 700,000 homes on the market by August or September of this year, the most homes available since 2019. “Older Americans are aging in place because it makes financial sense, but also because it’s human nature to avoid thinking about challenging scenarios such as needing help as you get older,” Redfin chief economist Daryl Fairweather, said in a statement. “In reality, many homeowners and renters will need to move somewhere that better meets their needs as they age, like a senior-living community or a one-story home in an accessible neighborhood. “But the government isn’t prioritizing building housing for seniors, which is further encouraging older Americans to stay put, exacerbating the inventory shortage. Politicians should focus on expanding housing stock that meets the needs of older Americans, which could help with housing affordability and availability for all.” In certain states like California or Texas, tax systems make it advantageous for people to stay in their homes as they age. Medical and technological advancements have also made it increasingly easy for people to stay in their home as they get older.  More than half (51%) of baby boomers who don’t plan to move say that they like their home and see no reason to move, according to Redfin’s survey. The real estate brokerage conducted this survey in February 2024, collecting 838 responses from baby boomers (ages 60 to 78) and 62 responses from members of the Silent Generation (ages 79 and older).

With More homes going on the market, people losing jobs and the cost of everything going up, when a home comes on the market it may need a New Roof, A/c, floors, kitchen, and or bathroom. With an FHA 203k or a Conventional renovation loan, you can have that done when buying the home. An opportunity to include that in the mortgage so you do not have to do the out-of-pocket expense. Maybe the home will not pass inspections and this way you can buy your home and get the work completed. You must have a licensed contractor who is insured and bonded, the first thing is to get them approved with the lender. Then when the appraiser goes to appraise the home they have your contractor's bid looking at the after-value. At closing the seller gets their funds and the lender has the escrowed funds ready to pay the contractor once the work is done. Rates are usually a .25% higher and there are a few more fees with inspections to check and make sure the work is completed. Let me know how I can help you tune in and learn at https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329

Home equity levels among homeowners aged 62 and older are at record levels following the end of the pandemic. As a result, reverse mortgages may no longer be considered a “loan of last resort” as financial planners aim to highlight their uses as part of a comprehensive financial plan in retirement. This is according to a column published this week by Investment News, soliciting input from planner professionals well known to the reverse mortgage business, including Wade Pfau. But other data suggests convincing borrowers of the benefits remains very challenging. Reverse mortgage use as part of a broader financial plan “is really the intention in the financial planning space,” Pfau told the outlet. While reverse mortgage customers benefit greatly from low rates, the current high-rate environment doesn’t fully cancel out their potential use as a planning tool, he explained. “It’s all about the sequence-of-returns risk in retirement planning […] Spending from the home equity helps you preserve more investments, so there is going to be a bigger legacy at the end,” Pfau told the outlet. “The beneficiaries can get more. They can pay off the loan and still have a net windfall.” This perspective is consistent with prior statements Pfau has provided to other outlets, including to RMD . Other financial planners adjacent to the reverse mortgage space offered their own thoughts, including Steve Resch, vice president of retirement strategies at Finance of America Reverse (FAR). “The goal is for the client or the family to always retain an equity position in that property. […] Years ago, that wasn’t the case,” Resch said in the story, describing the housing crisis of 2008 as a “reckoning” for the reverse mortgage industry as well as the larger housing ecosystem. Resch explained that the ballooning length of retirement in America contributes to the potential utility of a reverse mortgage for qualifying borrowers. “It’s simply a matter of demographics,” he told Investment News. “We have an enormous population that is moving into retirement. We’ve got a massive amount of equity available. We’re looking at 20- to 30-year retirements. Bringing home equity into that plan really makes sense.” Another financial planner, Gateway Wealth Management founder David Foster, cited Pfau’s work in particular as helping to bring him around on the product category as a planning tool for clients, but convincing them to take a closer look at a reverse mortgage remains a major challenge. “I think reverse mortgages might be the single most underutilized retirement planning tool,” he told the outlet. “I have found it extremely difficult to have a rational conversation with my clients about reverse mortgages. Most people who’ve paid off their house just cannot fathom the idea of going back into debt. “No amount of logic will be able to convince them that it is wise to borrow against their house in retirement after having worked so hard to pay off their home prior to retirement,” Foster added. “I’ve even had people get borderline angry with me for even suggesting the idea.” Last year, Mutual of Omaha Mortgage released survey data suggesting that education hurdles remain very steep for the reverse mortgage industry when aiming to connect with a variety of different borrowers on multiple potential use cases.