June Market Perspective [Infographic]

Market Perspective
Need help finding qualified buyers for today’s
purchase market? Let’s talk!

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Jason R. Richardson Photo Jason R. Richardson
NMLS# 256859
Mid America Mortgage, Inc.
27413 Tourney Road Suite #150
Valencia, CA 91355
(866) 575-9993
EMAIL ME
Visit my website

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Economic Observer
This letter is for information purposes only and is not an advertisement to extend customer credit as defined by Section 12 CFR 1026.2 Regulation Z. Program rates, terms and conditions are subject to change at any time.

The Importance of Home Equity in Retirement Planning

The Importance of Home Equity in Retirement Planning | Simplifying The Market

We often discuss the difference in family wealth between homeowner households and renter households. Much of that difference is the result of the equity buildup that homeowners experience over the time that they own their home. In a report recently released by the nonpartisan Employee Benefit Research Institute (EBRI), they reveal how valuable equity can be in retirement planning.

Craig Copeland, Senior Research Associate at EBRI, recently authored a report, Importance of Individual Account Retirement Plans and Home Equity in Family Total Wealth, in which he reveals:

“Individual account retirement plan assets, plus home equity, represent almost all of what families have to use for retirement expenses outside of Social Security and traditional pensions. Those families without individual account assets typically have very low overall assets, so they have almost nothing to draw from for retirement expenses.”

The report echoed the findings of a working paper, Home Equity Patterns among Older American Households, authored by Barbara Butrica and Stipica Mudrazija of Urban Institute. Fannie Mae highlighted these findings for their blog The Home Story this past winter, quoting Butrica and Mudrazija:

 “For most adults near traditional retirement age, a home is their most valuable asset — dwarfing retirement accounts, other financial assets, and other nonfinancial assets. Although relatively few retirees tap into their home equity, having it provides financial security… In fact, many retirement security experts argue that the conventional three-legged stool of retirement resources — Social Security, pensions, and savings — is incomplete because it ignores the home.”

USAToday interviewed two area experts to comment on the EBRI report. Randy Bruns, a private wealth adviser with HighPoint Planning Partners, agreed with the findings:

“Social Security and home equity are major pieces of the retirement puzzle.”

Wade Pfau, Professor of Retirement Income at The American College of Financial Services and author of Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement, said having the equity without a plan to use it won’t help:

“Home equity is a very important asset for American retirees, and so it is important to think about how to make best use of home equity in retirement planning.”

Bottom Line

Whether you use the equity in your home through a reverse mortgage or by selling and downsizing to a less expensive home, it should be a crucial piece of your retirement planning.

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Introducing Your Updated Dashboard

Have you logged in to your ListReports account lately? If so, you may have noticed that we’ve given your dashboard a facelift! Over the last few months we’ve been working diligently on updating our agent and lender dashboards so that they’re easier to use. Our goal was to create a simple, navigable experience that will empower you to get your work done more quickly and efficiently.

Less clutter, more clarity

We’ve streamlined the interface of your dashboard so that you’ll be able to more easily navigate our product. Structurally your dashboard is the same; we’ve merely simplified the design and color palette so that your primary action items (like creating a new ListReport) are highlighted and easier to find.

Activity Feed separated from Relationships

Activity Feed is now part of your primary dashboard navigation

Lenders and agents paired with Elite subscribers will notice that the Activity Feed tab has been separated from the Relationships section and now has its own dedicated page! When you log in to your dashboard you’ll be able to navigate to Activity Feed directly from the primary navigation menu.

Updated Resources

Resources is a great place to browse our frequently asked questions, learn more about product updates and new features, and sign up for hands-on experience with webinars. If you can’t find what you’re looking for in the Resources section, you can always contact one of our friendly customer support team members and they’d be happy to help you out.

Speaking of resources, check out our video below that highlights all of these updated dashboard features:

https://medium.com/media/3983e3f84ada42544f99ea06b3d728df/href

We’re confident that this new dashboard design will help you to have a more delightful ListReports experience. Comment below and let us know what you think!


Introducing Your Updated Dashboard was originally published in The ListReports Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

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Disappointing Data and Fed Rate Hike

Economic Observer
Disappointing Data and Fed Rate Hike

Downside misses in major reports on inflation and retail sales were favorable for mortgage rates this week. The Fed meeting was viewed as slightly negative. The net effect was a small decline in mortgage rates, which ended at the best levels of the year.

As widely expected, the Federal Reserve raised the federal funds rate on Wednesday afternoon by 25 basis points, bumping it to a range of 1.0% to 1.25%. Investors mostly reacted to new information in the Fed’s statement about the plan to reduce the $4.5 trillion of mortgage-backed securities (MBS) and Treasuries on its balance sheet. If the economy performs in line with the Fed’s forecast, the plan calls for a gradual reduction in the holdings by no longer reinvesting all of the principal payments received. The reductions are expected to begin this year. The amount that will not be reinvested will begin at $10 billion per month (split between Treasuries and MBS roughly in proportion to the Fed’s holdings) and will increase every three months until the total monthly amount not reinvested reaches $50 billion. These figures may have been larger than anticipated by investors, and mortgage rates moved a little higher after the statement was released.

Two major economic reports released on Wednesday morning fell short of expectations, causing mortgage rates to improve. In May, the core Consumer Price Index (CPI), which excludes the volatile food and energy components, was 1.7% higher than a year ago, down from the 1.9% year-over-year rate of increase in April. After holding steady during the second half of 2016, core CPI inflation peaked in January at 2.3% and has declined every month since then. According to the statement, most Fed officials expect that inflation will remain below their 2.0% target in the near term but will stabilize near their target in the medium term.

Excluding the volatile auto component, retail sales in May fell 0.3% from April, which was well below the consensus for an increase of 0.2%. Retail sales are volatile month to month, however, and they still were 4.0% stronger during the first five months of 2017 than they were over the same time period last year.

Week Ahead

Looking ahead, the housing starts data will be released on Friday. The Existing Home Sales report will come out on June 21, followed by New Home Sales on June 23. In addition, Industrial Production, an important indicator of economic growth, will be released on Thursday.


Chart

Contact me to discuss how I can help your clients with their mortgage needs.

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Jason R. Richardson Photo Jason R. Richardson
NMLS# 256859
Mid America Mortgage, Inc.
27413 Tourney Road Suite #150
Valencia, CA 91355
(866) 575-9993
EMAIL ME
Visit my website

FacebookTwitterLinkedIn Google+YouTube channel

Mid America Mortgage, Inc. Logo
Economic Observer
Commentary provided by MBSQuoteline. For live MBS pricing visit www.mbsquoteline.com.

This letter is for information purposes only and is not an advertisement to extend customer credit as defined by Section 12 CFR 1026.2 Regulation Z. Program rates, terms and conditions are subject to change at any time.

The TRUTH Behind the RENT vs. BUY Debate

The TRUTH Behind the RENT vs. BUY Debate | Simplifying The Market

In a blog post published last Friday, CNBC’s Diana Olnick reported on the latest results of the FAU Buy vs. Rent Index. The index examines the entire US housing market and then isolates 23 major markets for comparison. The researchers at FAU use a “‘horse race’ comparison between an individual that is buying a home and an individual that rents a similar-quality home and reinvests all monies otherwise invested in homeownership.”

Having read both the index and the blog post, we would like to clear up any confusion that may exist. There are three major points that we would like to counter:

1. The Title

The CNBC blog post was titled, “Don’t put your money in a house, says a new report.” The title of the press release about the report on FAU’s website was “FAU Buy vs. Rent Index Shows Rising Prices and Mortgage Rates Moving Housing Markets in the Direction of Renting.”

Now, we all know headlines can attract readers and the stronger the headline the more readership you can attract, but after dissecting the report, this headline may have gone too far. The FAU report notes that rising home prices and the threat of increasing mortgage rates could make the decision of whether to rent or to buy a harder one in three metros, but does not say not to buy a home.

2. Mortgage Interest Rates are Rising

According to Freddie Mac, mortgage interest rates reached their lowest mark of 2017 last week at 3.89%. Interest rates have hovered around 4% for the majority of 2017, giving many buyers relief from rising home prices and helping with affordability.

While experts predict that rates will increase by the end of 2017, the latest projections have softened, with Freddie Mac predicting that rates will rise to 4.3% in Q4.

3. “Renting may be a better option than buying, according to the report.”

Of the 23 metros that the study reports on, 11 of them are firmly in buy territory, including New York, Boston, Chicago, Cleveland, and more. This means that in nearly half of all the major cities in the US, it makes more financial sense to buy a home than to continue renting one.

In 9 of the remaining metros, the decision as to whether to rent or buy is closer to a toss-up right now. This means that all things being equal, the cost to rent or buy is nearly the same. That leaves the decision up to the individual or family as to whether they want to renew their lease or buy a home of their own.

The 3 remaining metros Dallas, Denver and Houston, have experienced high levels of price appreciation and have been reported to be in rent territory for well over a year now, so that’s not news…

Beer & Cookies

One of the three authors of the study, Dr. Ken Johnson has long reported on homeownership and the decision between renting and buying a home. The methodology behind the report goes on to explain that even in a market where a renter would be able to spend less on housing, they would have to be disciplined enough to reinvest their remaining income in stocks/bonds/other investments for renting a home to be a more attractive alternative to buying.

Johnson himself has said:

“However, in perhaps a more realistic setting where renters can spend on consumption (beer, cookies, education, healthcare, etc.), ownership is the clear winner in wealth accumulation. Said another way, homeownership is a self-imposed savings plan on the part of those that choose to own.” 

Bottom Line

In the end, you and your family are the only ones who can decide if homeownership is the right path to go down. Real estate is local and every market is different. Let’s get together to discuss what’s really going on in your area and how we can help you make the best, most informed decision for you and your family.

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Why Your Business Needs Consumer Reviews to Survive

Spark - Business Ideas to Fuel Your Bottom Line
Why Your Business Needs Consumer Reviews to Survive

The opinions of past customers can make or break your business. In today’s world, not only do you have to work hard to deliver an excellent customer experience, but you also have to capture your customers’ feedback once the deal closes if you want to attract new business. That’s where consumer reviews come in. If you’re interested in staying ahead of the competition, make sure you’ve got online reviews that are positive, current, and can be found in the right places.

Source: 2016 Local Consumer Review Survey, BrightLocal.


The Importance of Consumer Reviews


If we take a closer look at the above findings, it tells us several key things:
You need reviews to gain consumer trust. With 91% of consumers using reviews to determine whether a business is good or bad, you absolutely need to have online reviews, or you won’t even be a part of the conversation. Each time you close a deal, be sure to ask your customers to write a review about their experience.

Your reviews need to be positive. People are turned off by negative reviews. In fact, 60% of consumers distrust a business if the reviews are bad. What’s more, 87% of people won’t even use a business if their star rating is less than three. For your reviews to be effective, you must deliver exceptional customer service that leads to positive reviews and ratings. For the times that you may receive a negative review, be sure to respond promptly and address the customer’s concerns calmly and professionally. Doing so will let other users see that you care about your customers and could even persuade the reviewer to change his or her feedback.

Your reviews need to be current. A glowing review from two years ago is likely to be considered obsolete. Since 73% of consumers think that reviews older than three months are irrelevant, your reviews need to be up-to-date. Proactively work to obtain new, quality reviews on a regular basis, and never neglect an opportunity to ask for customer feedback.

Your reviews need to be in the right places. There’s a plethora of review sites on the web, so which ones should your reviews be on? Search engines, like Google and Bing, are a must, as 63% of consumers use search engines to find reviews. In addition, 37% of consumers head directly to dedicated review sites, like Yelp, to read reviews. You may also want to have a presence on industry-specific sites, such as Zillow. Lastly, don’t forget about Facebook ratings, LinkedIn recommendations, and the power of posting reviews on your own website.

How to Ask Customers for Reviews

Asking for reviews can feel a bit awkward, but if your customers are happy, they should be more than willing to share the love. Plus, 7 out of 10 consumers will leave a review if asked to, so don’t be shy. Here are some tips on how to ask for reviews:

In person. According to a study published in the Journal of Experimental Social Psychology, a face-to-face request is 34 times more successful than an email, requiring only six in-person requests to equal the power of a 200-recipient email blast. Use this to your advantage by asking your clients for reviews in person. Also, keep your ear to the ground for any unsolicited verbal feedback. When they say something nice about you, follow up with, “Would you be willing to share that feedback on Google or Facebook?”
In an email. While in-person requests are more powerful than email, that doesn’t mean emails are ineffective, and they can be a big time-saver when you’ve got a busy schedule. If you send thank-you emails to your customers after a transaction, that is a great place to ask for a review. Be sure to sound genuine and personal, include a direct link to the review site, and offer some questions to consider as they write the review. Here’s a helpful Review Request Email Template that you can use to ask customers for reviews via email.
On your website and social media. This is less about making a personal request and more about making it easy for people to leave a review. On your website, put clear call to action buttons and links to your top review sites. On social media, share a post every now and then simply asking your followers to leave a review on your page.
OR ASK ME ABOUT REPUTATION LOOP!

A Few Other Pointers:
  • Don’t wait too long to ask. Request a review while the deal is still fresh in people’s minds – within one to two days of the transaction.
  • Request permission before posting people’s reviews on your website.
  • Be careful about offering incentives in exchange for reviews. Yelp, for example, has some strict guidelines on this. Familiarize yourself with the rules for each review site so you don’t end up damaging your reputation.
  • Don’t just respond to negative reviews. Responding to positive reviews gives you another opportunity to say thank you and allows your personality and professionalism to shine.
How have user reviews helped your business? I’d love to hear about it!

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Jason R. Richardson Photo Jason R. Richardson
NMLS# 256859
Mid America Mortgage, Inc.
27413 Tourney Road Suite #150
Valencia, CA 91355
(866) 575-9993
EMAIL ME
Visit my websiteFacebookTwitterLinkedIn Google+YouTube channel
Mid America Mortgage, Inc. Logo
Economic Observer
This letter is for information purposes only and is not an advertisement to extend customer credit as defined by Section 12 CFR 1026.2 Regulation Z. Program rates, terms and conditions are subject to change at any time.

If Your Home Hasn’t Sold Yet… Definitely Check the Price!

If Your Home Hasn’t Sold Yet… Definitely Check the Price! | Simplifying The Market

The residential housing market has been hot. Home sales have bounced back solidly and are now at their fourth highest pace over the past year. Demand has remained strong ­throughout spring as many real estate professionals are reporting bidding wars with many homes selling above listing price. What about your house?

If your house hasn’t sold, it could be the price.

If your home is on the market and you are not receiving any offers, look at your price. Pricing your home just 10% above market value dramatically cuts the number of prosp­­ective buyers that will even see your house. See chart below.

If Your Home Hasn’t Sold Yet… Definitely Check the Price! | Simplifying The Market

Bottom Line

The housing market is hot. If you are not seeing the results you want, sit down with your agent and revisit the pricing conversation.

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#1 Reason to List Your House for Sale, NOW!

#1 Reason to List Your House for Sale, NOW! | Simplifying The Market

If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes for Sale 

The National Association of REALTORS’ (NAR) Chief Economist Lawrence Yun recently commented on the inventory:

Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the market.

Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase”.

The latest Existing Home Sales Report shows that there is currently a 4.2-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market, and 4.6% lower than a year ago.

The chart below details the year-over-year inventory shortages experienced over the last 12 months:

 

#1 Reason to List Your House for Sale, NOW! | Simplifying The Market

Anything less than a six-month supply is considered a “seller’s market.”

Bottom Line

Let’s get together and discuss the supply conditions in your neighborhood to be able to assist you in gaining access to the buyers who are ready, willing and able to buy now!

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Inventory Challenges Continue! [INFOGRAPHIC]

Inventory Challenges Continue! [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • After a surge in March, existing home sales and new home sales slowed due to a drop in inventory available for sale in the start-up and trade-up categories.
  • Median existing home prices surged for the 62nd straight month, up 6.0% over last year to $244,800.
  • New home prices slowed as builders have started to turn their focus toward single family, smaller homes.

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How’s the Real Estate Market? Find Out What the Experts Are Saying

How's the Real Estate Market? Find Out What the Experts Are Saying | Simplifying The Market

As we head into summer, it is a great time to review how the 2017 real estate market is doing so far. Here is what the experts are saying:

Doug Duncan, Fannie Mae Chief Economist

“Positive demographic factors should continue to reshape the housing market, as rising employment and incomes appear to be positively influencing millennial homeownership rates.”

Diana Olick, CNBC

“Even as more homes come on the market for this traditionally popular sales season, they’re flying off fast, with bidding wars par for the course. Home prices have now surpassed their last peak, and at the entry level, where demand is highest, sellers are firmly in the driver’s seat.”

Daren Blomquist, Senior VP at Attom

“I am guessing we will see it get even better… If you are considering moving, it could be a really good time to sell.”

Lawrence Yun, NAR Chief Economist

“The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month. Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings…for sales to muster a strong gain. Sales will go up as long as inventory does.”

Mark Fleming, First American Chief Economist

“Despite higher mortgage rates, the potential for home sales increased on an annual basis driven by steady income and job growth, along with a surge in building permits. While it may be a little late for this spring, the increase in building permits is a welcome sign that some relief may be in sight for the inventory shortages that are holding back many markets from realizing their full potential this spring.”

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