Opportunity in the current mortgage market may be challenging to find — and that could arguably be truer for those who offer reverse mortgage products for clients. Still, reverse mortgage professionals are always keeping their eyes peeled, and a group of them shared what they’re looking out for in 2024 for their businesses.
To get the lay of the land, RMD spoke to front-line reverse mortgage originators Jim Cullen in Green Bay, Wisconsin; David Heilman in Mount Pleasant, South Carolina; and Bruce Simmons in Denver.
Each professional already said that business is off to a promising start in 2024, but maintaining that momentum will be dependent on their individual skills, referral partnerships and borrower outreach, they said.
Wisconsin: No proprietary but plenty of opportunity
Cullen, who works at University Bank, explained that while he occasionally gets business opportunities from outside Wisconsin, he prefers to remain within his home state since he likes to conduct business face to face as much as possible. While he only has access to the Federal Housing Administration (FHA)-sponsored Home Equity Conversion Mortgage (HECM) product, that doesn’t dampen the possibilities.
“Wisconsin is one of the states where we have no proprietary products — everything is strictly HECM,” he said. “So, for me, the HECM is the go-to product. The biggest thing in my area still seems to be the folks with existing mortgages that are finding a way to get that mortgage out of their hair and get that monthly payment off the books.”
His referral partnerships are primarily focused on banks, credit unions and other lenders that may have existing clients who could be served well by a reverse mortgage, but the interest rate environment makes things tricky in some cases.
“Folks that come to them looking for payment relief, or [asking] what can they do to lower or get rid of their payment [may bring them to me],” Cullen said said. “Interest rates, of course, have gone up since they were at historic lows, so for a lot of people, they can’t give that customer payment relief because a refi is not going to do anything for them.”
That leaves a reverse mortgage option, which would then eliminate the existing forward mortgage payment, and such clients remain key for Cullen’s business, he said.
“That’s probably the No. 1 area, and what I really look at,” he said. “And then after that, it’s the financial planners with folks that are looking for ways to increase cash flow and preserve other assets. Because that’s the biggest fear people have. They ask, ‘Am I going to run out of money? And then what am I going to do?’ So, preserving other assets by utilizing home equity is the other big thing.”
South Carolina: Referrals are the name of the game
Referral partnerships are also important for David Heilman, principal for HomeGrown Financial in Mount Pleasant, South Carolina. When asked about opportunities he is most keeping an eye out for, referral partnerships were at the top of the list.
“I’m continuing to foster relationships with financial professionals, CPAs and investment advisers,” he said. “All those types of resources are really good for me. Elder law attorneys are another one, and bankers as well. I’ve concentrated on banking ever since I really got in this industry.”
Keeping open lines of communication with banks and credit unions in his part of the country helps the partners by adding another potential tool to their kit of solutions, Heilman explained, and it fosters positive relationships in the community.
“Talking to banks and credit unions that obviously don’t offer the product, and trying to get in front of their staff [allows them to learn about] a reliable, noncompeting referral source,” he said. “That’s proved to be beneficial for me over the years, and that’s something I’m going to continue to do in 2024.”
Reverse mortgage clients are typically focused on the contacts with whom they have a well-developed relationship, which often makes their bank or credit union the first stop for any financial need that may arise.
“I’ve always kind of been able to piggyback on banks and credit unions, and foster relationships there [at institutions] that don’t offer the product,” Heilman said.
Colorado: Expanded partnerships
Bruce Simmons of American Liberty Mortgage is also keeping his eye open for new referral partnerships at banks and credit unions, but he has also started to expand his list to those who provide home-based care in his community of Denver.
“I’m trying to reach out to home care providers and even contractors too,” he said. “Because if it’s affecting people’s income, they need the people to pay them. And if the people don’t have the money to pay for home care or contracting, the work that they need done on their home, [then they may be potential clients]. So, I’m trying to reach out to those kinds of folks, but we’re also trying to do more direct-to-consumer education.”
Those efforts, Simmons said, are primarily focused on digital platforms such as video creation and social media posts — particularly on Facebook.
“We’re trying to do some more of these ads with landing pages that have a brief video about reverse mortgages on Facebook, things like that,” he said. “We’re just in the very early stages of that, and will hopefully be rolling that out in February or March at the latest. But we’re hopeful about it.”
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Top Guaranteed Rate LO Shant Banosian joins board of Healing Realty Trust
The nation’s top loan officer, Guaranteed Rate’s Shant Banosian, joined the board of directors at Healing Realty Trust, a healthcare-focused real estate investment company.
Established in 2022, the real estate venture carved out a niche focusing on healthcare properties in the $1 million to $15 million price range – including those for behavioral, physical and mental health care.
Aiming to take the company public next year, Healing Realty Trust will tap into Banosian’s network of big banks as well as investors to grow its portfolio.
“Shant has an incredible network. We have a $25 million open series A funding round right now. So we’ll look for him to leverage his relationships into access to investors. That’ll be a big part. As we continue to grow our portfolio, we’ll use equity as well as debt … a lot of the banks that he works with also do commercial lending. So he’ll have access to commercial lines of credit for us,” Joe Caltabiano, CEO of HRT, said in an interview.
Banosian, branch manager and senior loan officer at Guaranteed Rate, is one of the top LOs in the country with more than 40,000 closed units and $9 billion in funded loans throughout his 20-year career.
In 2023, he closed $925 million in loan origination volume, with 1,617 loans, which put him as the top originator on Scotsman Guide’s top originators list.
Shant is the seventh member to join Healing’s board following the recent addition of another board member earlier this month. Healing Realty Trust brought on Jared Chupaila, a former CEO of Brookfield Properties‘ retail real estate vertical where he oversaw the company’s U.S. portfolio of more than 150 retail centers.
“We want to improve the board to look more like a public company along the way,” noted Caltabiano.
The company has been adding board members with expertise in commercial real estate, insurance and capital markets and plans to add a board member with experience in a large health network.
“We want to build a billion-dollar real estate portfolio that’s filled with quality tenants that kicks off an above average yield to our investors … Understanding the financial markets and how that interlays with real estate is critically important. So making sure that we’re buying properties at the right time [is] a real opportunity for us for the next couple years,” said Caltabiano.
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Reverse mortgage originators on the referral opportunities they’re watching in 2024
Opportunity in the current mortgage market may be challenging to find — and that could arguably be truer for those who offer reverse mortgage products for clients. Still, reverse mortgage professionals are always keeping their eyes peeled, and a group of them shared what they’re looking out for in 2024 for their businesses.
To get the lay of the land, RMD spoke to front-line reverse mortgage originators Jim Cullen in Green Bay, Wisconsin; David Heilman in Mount Pleasant, South Carolina; and Bruce Simmons in Denver.
Each professional already said that business is off to a promising start in 2024, but maintaining that momentum will be dependent on their individual skills, referral partnerships and borrower outreach, they said.
Wisconsin: No proprietary but plenty of opportunity
Cullen, who works at University Bank, explained that while he occasionally gets business opportunities from outside Wisconsin, he prefers to remain within his home state since he likes to conduct business face to face as much as possible. While he only has access to the Federal Housing Administration (FHA)-sponsored Home Equity Conversion Mortgage (HECM) product, that doesn’t dampen the possibilities.
“Wisconsin is one of the states where we have no proprietary products — everything is strictly HECM,” he said. “So, for me, the HECM is the go-to product. The biggest thing in my area still seems to be the folks with existing mortgages that are finding a way to get that mortgage out of their hair and get that monthly payment off the books.”
His referral partnerships are primarily focused on banks, credit unions and other lenders that may have existing clients who could be served well by a reverse mortgage, but the interest rate environment makes things tricky in some cases.
“Folks that come to them looking for payment relief, or [asking] what can they do to lower or get rid of their payment [may bring them to me],” Cullen said said. “Interest rates, of course, have gone up since they were at historic lows, so for a lot of people, they can’t give that customer payment relief because a refi is not going to do anything for them.”
That leaves a reverse mortgage option, which would then eliminate the existing forward mortgage payment, and such clients remain key for Cullen’s business, he said.
“That’s probably the No. 1 area, and what I really look at,” he said. “And then after that, it’s the financial planners with folks that are looking for ways to increase cash flow and preserve other assets. Because that’s the biggest fear people have. They ask, ‘Am I going to run out of money? And then what am I going to do?’ So, preserving other assets by utilizing home equity is the other big thing.”
South Carolina: Referrals are the name of the game
Referral partnerships are also important for David Heilman, principal for HomeGrown Financial in Mount Pleasant, South Carolina. When asked about opportunities he is most keeping an eye out for, referral partnerships were at the top of the list.
“I’m continuing to foster relationships with financial professionals, CPAs and investment advisers,” he said. “All those types of resources are really good for me. Elder law attorneys are another one, and bankers as well. I’ve concentrated on banking ever since I really got in this industry.”
Keeping open lines of communication with banks and credit unions in his part of the country helps the partners by adding another potential tool to their kit of solutions, Heilman explained, and it fosters positive relationships in the community.
“Talking to banks and credit unions that obviously don’t offer the product, and trying to get in front of their staff [allows them to learn about] a reliable, noncompeting referral source,” he said. “That’s proved to be beneficial for me over the years, and that’s something I’m going to continue to do in 2024.”
Reverse mortgage clients are typically focused on the contacts with whom they have a well-developed relationship, which often makes their bank or credit union the first stop for any financial need that may arise.
“I’ve always kind of been able to piggyback on banks and credit unions, and foster relationships there [at institutions] that don’t offer the product,” Heilman said.
Colorado: Expanded partnerships
Bruce Simmons of American Liberty Mortgage is also keeping his eye open for new referral partnerships at banks and credit unions, but he has also started to expand his list to those who provide home-based care in his community of Denver.
“I’m trying to reach out to home care providers and even contractors too,” he said. “Because if it’s affecting people’s income, they need the people to pay them. And if the people don’t have the money to pay for home care or contracting, the work that they need done on their home, [then they may be potential clients]. So, I’m trying to reach out to those kinds of folks, but we’re also trying to do more direct-to-consumer education.”
Those efforts, Simmons said, are primarily focused on digital platforms such as video creation and social media posts — particularly on Facebook.
“We’re trying to do some more of these ads with landing pages that have a brief video about reverse mortgages on Facebook, things like that,” he said. “We’re just in the very early stages of that, and will hopefully be rolling that out in February or March at the latest. But we’re hopeful about it.”
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Homeowners are staying in place twice as long as they did 20 years ago: Redfin
The preference that older Americans have for aging in place in their own homes is showing up in broader trend data, according to a new report from Redfin.
While “homeowner tenure” has fallen slightly since its 2020 peak, the length of time that homeowners are remaining in their properties doubled to 11.9 years last year, up from 6.5 years in 2005, according to a Redfin analysis of median U.S. homeowner tenure by year using county records.
The trend is driven primarily by older Americans, particularly baby boomers, who are electing to stay in their homes longer.
“Nearly 40% of baby boomers have lived in their home for at least 20 years, and another 16% have lived in their home for 10-19 years,” the report reads. “For Gen Xers, more than one-third (35%) have lived in the same home for at least 10 years.”
Millennials are a bit of a different story, since members of that generation tend to change jobs more often than prior generations. Less than 7% of millennials have been in their homes for at least 10 years.
Older generations have an outsized level of influence over the U.S. housing market for multiple reasons, Redfin said.
“One, the American population is aging: Roughly 17% of people in the U.S. were 65 and older as of 2020, up from 13% in 2010,” the report reads. “Two, they’re most likely to own homes: Nearly 80% of baby boomers and 72% of Gen Xers own their home, compared to 55% of millennials and 26% of Gen Zers.”
Older Americans also have financial incentives attached to staying in their homes, since 54% of the baby boomer cohort own their homes free and clear without making monthly mortgage payments.
“For that group, the median monthly cost of owning a home — which includes insurance and property taxes, among other things — is just over $600 (similar to the monthly cost for other generations with no outstanding mortgage, but other generations are far less likely to own homes free and clear),” the report stated.
Baby boomers who continue to make a mortgage payment are also doing so at a lower interest rate when compared with more recent homebuyers, making the prospect of buying another home less attractive than it would be if they entered the market again in the current rate environment.
Regarding its sources and methodology, Redfin defines homeowner tenure as “the number of years between the most recent sale date of a home and December 1, 2023.” It added that data on homeowner tenure by generation is compiled by analysis of the U.S. Census Bureau’s one-year American Community Survey in 2022, the most recent year for which data is available.
Homeowner tenure is projected to remain flat, but a larger share of homeowners remaining in place is also contributing to an inventory shortage, according to the report.
“Long homeowner tenure, particularly among baby boomers, is an obstacle for young first-time buyers trying to break into the market,” the report read. “A recent Redfin analysis found that empty-nest baby boomers own twice as many three-bedroom-plus homes than millennials with kids. Some young families are turning to new construction, and others are renting homes.”
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How to become a luxury real estate agent
Working in real estate sales for a few years, and now you want to challenge yourself and raise the stakes? You might be ready to take on the luxury real estate market! I’ll show you what it takes to succeed as a luxury real estate agent in any market.
If you’re known in your market as the expert who successfully sells properties between $1 to $3 million, how do you start getting clients looking for homes valued at $10 million+? How do you convince the sellers of $15 million homes to work with you? As with any challenge, it’s essential to prepare well and have the correct tools to have the best chance of success.
Diving into the world of luxury real estate sales requires a nuanced understanding of the market and a strategic approach to stand out among your competitors. First, let’s define the parameters of the “luxury real estate market” for our purposes and review my top five tips for success.
Defining the luxury real estate market
The luxury real estate market has become more and more difficult to define. Depending on your market location, luxury properties might be priced at $500,000 or $50 million! What we would like to focus on for the purposes of this article are the top 10-20% premium properties in your market.
However, the luxury real estate market isn’t just about high-priced properties; it’s an experience, a lifestyle, and an investment in exclusivity. Typically, luxury properties command a premium value due to their unique features, prime locations, and the level of customization and service associated with them. In this market, clients aren’t just buying a home; they’re investing in a lifestyle that reflects their status, tastes, and aspirations
Top 5 expert tips for success as a luxury real estate agent
1. Niche specialization
To succeed in luxury real estate, it’s best to define your expertise by specializing in a niche. Identify a specific property type that aligns with your interests and local market demands. Whether it’s historic townhomes with timeless charm, contemporary penthouses with panoramic views, or beachfront homes or villas offering a private escape — becoming a specialist sets you apart. Develop in-depth knowledge, showcase your expertise, and position yourself as the go-to authority in that property or market niche. Don’t try to do everything or be everything to everyone!
Use this tool: Coffee & Contracts
Thoughtfully designed by former real estate agent Haley Ingram, Coffee & Contracts offers a suite of upscale social media templates for every social platform. Bring polish and consistency to your social media branding with this $54 monthly subscription service that lets you customize your message without having to fret over branding and design.
Visit Coffee & Contracts
2. Polished branding and online presence
Luxury clients expect excellence in every aspect, including the presentation of their potential homes. Invest in a polished personal brand that exudes sophistication and professionalism.
You must correctly brand yourself – your personal appearance, your mannerisms, your presentation, your website, etc., should be a showcase of your professionalism, expertise and attention to detail. Use high-quality visuals, professional photography, and engaging content to create an online presence that mirrors the luxury lifestyle you represent. Consistency in branding across all platforms reinforces your credibility in the luxury real estate market.
Use this tool: Agent Image
Agent Image offers an array of beautifully designed, luxury website templates to choose from, with seamless CRM and IDX integration. Customization and completely done-for-you packages with unparalleled web support make branding yourself as a luxury real estate agent a breeze.
Visit Agent Image
3. Exceptional client service
In the luxury real estate market, exceptional client service isn’t just a bonus – it’s a requirement — in fact, it’s a prerequisite.
Go above and beyond to cater to the unique needs and desires of high-net-worth clients. Offer services like property staging, personalized property tours, and concierge-level assistance. By providing an unparalleled experience, you not only satisfy your clients but also secure referrals and repeat business in this tight-knit community. The top luxury market requires top-quality service.
4. Network like a pro
Networking is the heartbeat of success in luxury real estate. Attend exclusive events, join prestigious clubs, and build relationships with influential individuals. Your network isn’t just a source of potential clients; it’s a valuable asset for gaining insights into market trends, understanding the desires of affluent buyers, and staying ahead of the curve. Cultivate genuine connections, and let your network be the driving force behind your success.
Affluent clients like to know that you have other high-end clientele and have had success in the luxury real estate market.
5. Continuous learning and adaptation
The luxury real estate market is dynamic, with trends evolving and client preferences shifting rapidly. Stay at the forefront of industry knowledge by engaging in continuous learning. Attend workshops, seminars, and training programs to understand the latest market trends and incorporate innovative practices into your approach. Adaptability is a key trait that ensures you remain a trusted advisor, capable of navigating the ever-changing landscape of luxury real estate.
Getting to the top — How to become a luxury real estate agent
Successfully navigating the luxury real estate market requires expertise, strategic branding, unparalleled service, influential connections, and a commitment to ongoing learning. By embracing these tips, you’ll define your place in this exclusive market and build a lasting and successful career in luxury real estate sales.
Cheers to your journey toward becoming a distinguished expert in the world of opulent property transactions!
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Colorado county creates alert system to warn of potential property fraud
Pueblo County, Colorado, which encompasses an estimated population of about 170,000 people in and around the city of Pueblo, is sounding the alarm over potential fraud by creating a new alert system designed specifically to protect property owners.
The announcement was made by the Pueblo County Clerk and Recorder’s Office and reported on by the Pueblo Chieftain newspaper and a local NBC News affiliate.
“Across the nation, there has been a recent increase in mortgage and property fraud, where a person files fraudulent deeds, mortgages, or other liens against a property without the owner’s knowledge or consent,” county clerk and recorder Candace Rivera said in an interview with the Chieftain.
Property owners will now be notified whenever the clerk’s office receives an application for any kind of property lien, which will give owners the opportunity to respond if fraudulent activity is suspected.
“In Pueblo, we just started implementing this new process. (Locally) it hasn’t become an issue just yet, although we’ve had a couple since I’ve been in office,” Rivera told the newspaper. “We can’t prevent the fraud, but it will add a layer of protection for citizens.”
Tenth Judicial District Attorney Jeff Chostner added that the most likely victims of these kinds of property fraud are elected officials, who are often targeted by “discontented political activists,” including so-called “sovereign citizens” who believe the laws of the U.S. do not apply to them.
The reporting explicitly mentions reverse mortgages as a potential source of a fraudulent lien.
“Discuss with your trusted family members before making any decisions that affect ownership of your property, such as adding or removing someone from a deed or taking out a new mortgage, reverse mortgage or second mortgage,” the Chieftain reported. “If you feel it prudent, you may want to consult a lawyer.”
Sources of fraud can come in the form of investment opportunities or scams that specifically target senior homeowners, including from bad actors who claim to be reverse mortgage proprietors, according to a report issued by the U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General.
Seniors are typically targets of bad actors, something that is often highlighted by U.S. government agencies including HUD, the Federal Housing Administration (FHA) and the Consumer Financial Protection Bureau. The CFPFB maintains a dedicated office to examine instances of elder financial abuse.
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U.S. foreclosure activity ticked up significantly in January: Attom
In January, the number of properties with a foreclosure filing inched up on both a monthly and a yearly basis, according to a report released Tuesday by Attom Data.
In total, 33,270 U.S. properties received a default notice, were scheduled for auction or were undergoing bank repossession last month, up 10% from December and up 5% compared to a year ago. Nationwide, one in every 4,236 housing units had a foreclosure filing in January 2024.
“We observed a slight uptick in foreclosure filings, which may be partially attributed to the typical post-holiday progression of filings through the legal system,” Rob Barber, CEO at Attom, said in a statement. “However, other external factors may be at play such as escalating interest rates, inflation, employment shifts, and other market dynamics. We remain vigilant in monitoring these trends to understand their full impact on foreclosure activity.”
Foreclosure completions increased in 19 states
Lenders repossessed 3,954 U.S. properties through completed real estate-owned (REO) foreclosures in January. That’s up 1% from one year ago and up 13% from last month, the first monthly increase recorded since July 2023.
Nineteen states saw an increase in completed foreclosures from December to January. Michigan, Minnesota, California, Pennsylvania, and Missouri posted the largest monthly increases.
Meanwhile, Detroit, Chicago, New York, Philadelphia and San Francisco posted the highest number of REOs completed among the 224 metropolitan statistical areas with a population of at least 200,000 people in the analysis.
Delaware, Nevada and Indiana had the highest foreclosure rates in the country.
Lenders started the foreclosure process on 21,770 properties in January, up 6% from December and up 5% from a year ago. California, Texas, Florida, New York and Illinois had the greatest number of foreclosure starts last month.
New York, Houston, Los Angeles, Miami and Chicago recorded the greatest number of foreclosure starts in January 2024.
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Hometap reaches $1B in home equity investments
Boston-based fintech company Hometap has deployed more than $1 billion in home equity investment (HEI) products since its launch in 2017, the company announced on Tuesday. Of the $1 billion total, $730 billion has been deployed since 2022, and the company has issued more than 10,000 HEIs in total as of January.
“This milestone is a testament to the momentum our platform has achieved over the last six years due to the increased awareness of and demand for home equity products, including home equity investments in particular, among both homeowners and investors,” Hometap co-founder and CEO Jeffrey Glass said in a statement.
“As Americans continue to amass record levels of equity in their homes, they need tools that increase access and reduce stress, particularly as they struggle to manage high interest rates, inflation, personal debt, and other obstacles to reach their long-term financial goals.”
For U.S. homeowners with outstanding mortgages, or some 63% of all homes, equity tied up in real estate jumped by 6.8% year over year as of third-quarter 2023, according to a recent report from real estate analytics firm CoreLogic.
In May 2023, Hometap launched an online portal called the Home Equity Dashboard. The platform offers homeowners a free centralized platform to understand their home equity. It features tools for data visualization of home value, mortgage debt and current equity, as well as estimates for up to 10 years.
The portal also displays forecasts based on different home appreciation scenarios and maintenance checklists that are broken out by season. And it boasts a home renovation calculator and home service offerings from Hometap’s partner network.
Home equity investments are relatively new products that serve as alternatives to other types of mortgages, such as home equity loans, home equity lines of credit (HELOCs) and cash-out refinances. The borrower is not required to repay the loan via monthly installments. The HEI provider typically recoups its initial investment and takes a percentage of the home’s future value when the property is sold.
Bain Capital, American Family Ventures, Iconiq Capital and Group 1001’s Delaware Life Insurance Co. are some of the partners who help Hometap fund its home equity investments.
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U.S. inflation hotter than expected in January
The Consumer Price Index rose more than forecasted in January, highlighting again the bumpy road to disinflation.
Consumer prices were up 3.1% in January from a year earlier, down from 3.4% in December, according to data released by the Bureau of Labor Statistics on Tuesday. On a monthly basis, the index increased by 0.3%, the biggest monthly increase since September.
Core inflation, the Fed’s preferred inflation gauge, changed little at 3.9% annually. The Fed’s target for core inflation remains 2%.
Shelter inflation was the biggest driver of higher overall costs while energy prices declined. Shelter costs rose 0.6% in January, up from 0.4% in December. It was their highest monthly jump since September 2023.
While rent prices are softening, consumers continue to feel the brunt of high prices when they go to the supermarket or the gas pump.
“Overall, the nation’s economy remains strong, so don’t expect an interest rate cut this half of the year unless consumer prices take a larger, downward trajectory,” CoreLogic Chief Economist Selma Hepp said in a statement.
When will the Fed start cutting rates?
During the last Federal Open Market Committee meeting, Fed officials reiterated their will to cut rates later this year if inflation stays under control. But, Federal Reserve Chair Jerome Powell wants to see more evidence confirming the economy’s path down to a 2% inflation.
Some analysts, chilled by Tuesday’s reading, think a May rate cut is now unlikely. According to HousingWire’s lead analyst Logan Mohtashami, there has been progress in inflation, which will yield three rate cuts in 2024.
“For timing, watch the jobless claims data more than inflation,” Mohtashami said. “If jobless claims start to rise every month, it is in plan; for now, jobless claims data is low. Look for May for the first Fed rate cut at the current trend.”
Bright MLS Chief Economist Lisa Sturtevant expects the Fed to cut rates later this year and forecasts mortgage rates to come down. However, she doesn’t anticipate homebuyers to feel that much of a relief as prices remain elevated, including home prices.
“The best advice for prospective homebuyers is not to wait for mortgage rates to come back down to where they were a couple of years ago, the super-low, pandemic-era rates are not coming back,” Sturtevant said in a statement. “Instead, buyers should take a close look at their finances, set realistic expectations about the home price they can afford, and, in many cases, expect to have to make compromises on the type or location of home that they can make an offer on.”
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Altos: Sellers are coming back to the housing market, can buyers keep up?
Each week — for several months now — inventory levels of unsold homes on the market has been expanding compared to last year. Even as inventory declined this week, it’s relatively growing compared to a year ago. This week, inventory fell by half a percent. A year ago it fell by 3% in the week.
New listings each week, which were record few last year, are growing now. There are still notably not a lot of sellers. But home sellers are gradually easing back into this housing market. Inventory this spring is looking much better for prospective homebuyers than any recent year.
Any time inventory rises, you start to see housing crash hyperbole on social media. And it’s important to keep watch on the demand side as well. We can see that homebuyer demand is also ticking up by most measures. There’s a lot to dive into here to see if we notice any signs of housing demand and supply getting out of balance. We’ll tackle some of that today.
New listings volume climbing
I want to start today with the new listings volume, which is notably finally climbing over last year’s anemic levels. There were 66,000 new listings this week, of which 14,000 are already in contract. That’s 14% more new listings than for the same week a year ago. Sellers are coming back to this housing market.
14,000 of those new listings are already in contract. That leaves 52,000 new listings unsold to add to inventory. That’s the most since 2020 — before the pandemic. In 2021 there were actually more total sellers, but at the peak of the frenzy, so many of those were immediate sales that they never get counted as active inventory. So the net result is that we can see sellers who sat on the sidelines a year ago, are starting to ease back in.
The takeaway here is: we can see new sellers, more than last year. It’s not a ton of sellers. But it is growing.
Immediate sales
If sellers are growing we need to know if buyers are growing too. We wouldn’t want supply and demand to get out of balance. When we watch new listings build, a key factor I track is the immediate sales. These are listings that hit the housing market and take offers within hours or a few days and then go immediately into contract. They essentially bypass the active market. These immediate sales were the defining characteristic of the pandemic real estate boom. Those included bidding wars and multiple offers. There are still immediate sales which happen in every market. We want to know how many because it tells us about housing demand.
Of the 66,000 new listings this week, 14,000 of those are already in contract. That’s 6% more immediate sales than last year at this time. So immediate sales are growing just a bit.
Inventory
We see more sellers entering the market, but that doesn’t mean inventory is jumping. In fact there are now 495,000 single family homes are on the market now. That’s half a percent fewer than last week. We have more buyers than sellers this time of year so the active inventory of unsold homes ticked down this week. The difference is that inventory ticked down half a percent. A year ago inventory fell by 3% in the same week. This is what I mean that home prices had more upward pressure a year ago.
Inventory declined this week but is now 12% more than last year at this time. While is it totally expected that we have more buyers than sellers in February, fewer homes on the market each week, that half a percent decline is pretty narrow. This implies that inventory will start growing week over week pretty soon. And the spring buying season will have improved selection for home buyers.
New Pendings
With more inventory and more sellers, comes the opportunity for more sales to happen. This week saw 61,000 new single family home sales transactions started. That’s 9% more than a week ago and 3% more than a year ago.
Last year was so restricted with so few home sellers that sales were ultra low. That is starting to change — at least the market is trying to — but 7% mortgage rates aren’t helping sales volumes. As I said, this week saw 3% more home sales transactions started than the same week a year ago. The last few weeks did not show any growth over the previous year. That’s discouraging because last year was so slow. But this week sales ticked up again, maybe people are coming out of their deep freeze. Unfortunately mortgage rates ticked up too and that held back some buyers for sure. So the sales rate growth is definitely weaker than the data was looking a month ago.
Prices
Median price of single family homes is $425,000 again this week. The price of the new listings is also unchanged at just under $400,000.
Homes are just a little more expensive now than last year at this time. Up until recently I’ve been expecting mostly positive pressure on home prices all year long. But we got hit by extra strong jobs news, which pushed the bond market higher and therefore mortgage rates jumped back to 7%. If that trend continues, that will keep home buyers at bay, and each buyer who doesn’t make an offer means slightly more downward pressure on home prices.
It can be hard to communicate all this with buyers and sellers. There are folks on the sidelines waiting for rates to drop so they can swoop in for sudden bargains. But they may not realize how much competition is waiting right along with them. Meanwhile, mortgage rates are actually rising.
Mike Simonsen is the president and founder of Altos Research.
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SERHANT. enters Orlando real estate market
Roughly 10 months since first expanding into Florida, Ryan Serhant’s eponymous brokerage is expanding into its third market in the state. In early February, SERHANT. announced the addition of the Orlando-based team, The Home Squad, to its roster.
The team’s 16 agents are SERHANT.’s first in Orlando. Previously, the brokerage only operated in the Miami and Palm Beach County markets.
“We’re excited to expand into the Orlando market,” Serhant said in a statement. “We welcome The Home Squad to SERHANT., and it’s a great example of the influx of talented, proven teams joining SERHANT. When we add agents from both traditional and non-traditional brokerages, it’s validating and a testament to how our model is working and unlike any other.”
The team is led by husband-and-wife team Sarah and Mark Raumaker. The Raumakers began their career in real estate in 2016 at Keller Williams before joining eXp Realty in 2018 and launching The Home Squad.
“In SERHANT., we’ve found much more than just a brokerage,” Mark Raumaker said in a statement. “The firm showed a genuine interest in supporting The Home Squad’s vision and growth and is a relationship based on mutual respect, investment, and a shared goal of achieving excellence in the real estate industry. A core focus for The Home Squad has always been agent development and empowerment, and we believe this mutual philosophy that we share with SERHANT. is essential for a thriving and sustainable real estate business.”
In 2023, The Home Squad closed $86 million in sales volume, according to the release.
In April of 2023, SERHANT. announced its expansion into six new markets, including Florida, however the firm’s expansion has not been all smooth sailing. The firm is facing multiple lawsuits alleging that agents and teams stole trade secrets when they moved to SERHANT. in violation of their contract.
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