06.10.24

Written by Chase Majerus

Mortgages Have Been Around

Hello! Welcome! It’s Week 2 of National Homeownership Month and we have a wonderful newsletter for you! Did you know that mortgages became common only after the U.S. banking system came into being after the 1860s National Bank Acts?

Or that in its 87 years of existence, the Federal Housing Administration (FHA) has saved America an almost $4 trillion loss of household wealth? Neither did I! Look at us learning together. It’s going to be a good time today, I can feel it!

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Today's Agenda:

S1L Home Equity Loan

Use Your Home For The Best Future Gains

A home equity line of credit, or HELOC, lets you borrow against your home’s available equity. Applying for a HELOC with Synergy One Lending is fast and easy. Our application is fast, easy, and all online. If pre-approved, you’ll be instantly presented with your offer options.

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"Evil Dead" Properties

The foreclosure doomsday predictions are here. And the zombies are out in broad daylight. But there’s good news everyone!

According to Attom Data Solutions, “Zombie properties” (a.k.a. vacant, empty homes) are not very common in the U.S. which means people don’t need to worry too much about lots of homes being taken back by banks after the special rules from the pandemic ended. Let’s read some cold hard dead facts:

Stable Vacancy and Foreclosure Rates: About 1.29 million U.S. residential properties, or 1.3% of existing stock, are vacant in Q2 2024, a stable rate from Q1. There are 237,000 properties in foreclosure, down 2.3% quarterly and 23.9% yearly, with 6,945 being “zombie foreclosures.”

Low Zombie Foreclosure Numbers: Zombie foreclosures have decreased by 5.4% quarterly and 20.6% yearly, now representing one in every 14,724 homes, the lowest level since early 2021.

Foreclosure Crisis Predictions Unmet: Predictions of a foreclosure crisis post-pandemic moratorium have not materialized. Foreclosures remain low, with CoreLogic data showing a stable 0.3% foreclosure impact on U.S. mortgages and a 2.8% national delinquency rate.

State and Metro Vacancy Rates: The highest state vacancy rates in Q2 2024 were in Oklahoma (2.27%), Kansas (2.18%), Missouri (2.06%), Alabama (2.04%), and Michigan (2.02%). The lowest were in New Hampshire (0.36%), New Jersey (0.41%), Vermont (0.44%), Idaho (0.47%), and California (0.64%). Peoria, Illinois, had the highest metro zombie foreclosure rate at 18.6%, with St. Louis leading large metros at 7.8%.

Read more about zombie properties here!

Major Manor

Art Collection Included

We’re not focusing on a specific manor today, but on a CNBC article that pointed out that when buying a luxury home, you can now get an art collection as part of the deal! Sounds like Major Manor material to me

Paul Lester, a real estate maestro at The Agency, decided that selling luxury homes in Los Angeles was too mundane, so he threw in an art exhibit. Makes sense. I mean, why not sell million-dollar homes with million-dollar art? This strategy began over a decade ago when Lester successfully sold a Beverly Hills property, along with its displayed artwork, for a premium.

ENow, he showcases contemporary art and designer furniture in high-end homes, which are all for sale. Buyers love these “turnkey” homes, where you can just waltz in and say, “I’ll take the house, the sofa, and that abstract painting in the hall!”

Lester’s genius plan includes collaborations with art consultants who make sure the art matches the house (or intentionally doesn’t, because nothing says luxury like a clash of styles). Some properties come with art collections worth more than the houses themselves, because why not?

Meanwhile, his colleagues in London’s “golden postcode” also get in on the action, advising sellers to keep their pricey art on the walls during viewings. After all, nothing helps a buyer appreciate a mansion like a multimillion-dollar painting staring back at them. Turns out, selling homes with art is like offering fries with a burger — everyone wants the full combo!

Read about the art of selling art here!

Social Space

Our Top Social Links of the week

Read:
This is how every Millennial feels these days – Read here!

Video:
Growth Mode: Synergy One Lending – Watch here!

Read:
A Twitter/X thread about inflation and rent – Read here!

Read:
The oldest home on the market in America (1669) – Read here!

S1 FinFit App

Digital financial assistant at your fingertips

S1 FinFit is a FREE app that provides a roadmap to help you reach your financial and lifestyle goals, no matter how big or small! Free credit monitoring with alerts, set financial goals, create budgets, and keep track of your spending to see where your money is going.

Download the app on the appropriate app store with the links below!

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Rental Royal Rumble

… Sounds like a fun video game right? Not as fun though in real life practice where several analysts are reporting that renters are staying put longer because homeownership continues to slip further out of reach. Yuck. Let’s break it down:

Increase in Long-term Renting: In 2022, 16.6% of renters had been in their homes for 10 years or more, up from 13.9% in 2012. Most renters stay for one to four years, with this category rising from 39.9% in 2012 to 41.8% in 2022.

Decline in Short-term Renting: Short-term renters, those moving within 12 months, decreased to 25.2% in 2022 from 32.2% in 2012, indicating a trend towards longer rental tenures.

Factors Influencing Rental Tenure: High home prices ($407,600 median in April 2024), elevated mortgage rates, and increased rental prices (up over 20% since 2019) discourage home purchases and frequent moving. This trend may reverse with a boom in apartment construction.

Generational and Regional Differences: Over half of Generation Z renters moved within 12 months in 2022, while one-third of baby boomers rented for over 10 years. Austin, TX had the highest short-term renting rate at 38.2%, while New York City had the lowest at 15.8%.

Read about the frozen renters here!

Vlog

The Economic Picture

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Last week was a huge week for the US economy, and not just because it’s the start of national homeownership month.

All throughout the week we heard about some super important labor market reports like job openings, ADP jobs reports, jobless claims and of course the big Jobs Friday report. Why are jobs reports so influential to the housing and stock market? To understand that, we gotta take a big step back and look at the larger economic picture.

  • Mortgage rates are influenced by the 10-year yield and labor market data. Softer labor market data might push the Fed to lower rates, potentially bringing mortgage rates down.
  • Mortgage spreads. The spread between 30-year mortgage rates and the 10-year yield has improved this year compared to last. If spreads normalize further, mortgage rates could drop by 0.75% to 1% without changes in the 10-year yield. Which is huge.
  • Historically low mortgage purchase applications have seen some improvement. If mortgage rates drop by 1% as they have in past falls, purchase applications have a pretty strong chance at increasing.
  • Inventory levels… they are growing, moving away from historically low levels, and not at a snails pace. Like if you look at the data, on a weekly basis, housing inventory is going up post haste.

This all culminates to one super important moment… will the Fed cut rates on June 12??

Watch our video here!

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