Navigating The Housing Market: Trends, Tips, And Tidbits

These folk are watching rates carefully. But even though rates are down from their peak, they are still bobbing and weaving, dropping a tad one week and floating higher the next. And I believe these people won’t come off the sidelines in any meaningful number until they perceive that rates have hit bottom. Not just when they are falling, but when they have dropped sufficiently enough, remain at that level for some time, and then start to inch back up again. That’s when they’ll pull the trigger and not before.

Some might even hold out until loan costs move back into the 2–3% range, which likely will never happen again, at least in our lifetimes. Even the best predictions are for rates to fall into the high-5s by the end of the year. So they’ll be the ones who never move.

That’s just my two cents. Now onto cleaning off my desk:

Collectively, owner-occupied homes in the nation’s largest cities are worth a whopping $23 trillion. But ask individual owners what their places are worth and most have no clue.

Nearly three out of four homeowners consistently undervalue the cost of houses in their markets, according to a survey of nearly 1,500 people in 29 of the country’s most populous cities. The trend, said All Star Home, a home improvement outfit based in North Carolina, is particularly pronounced in urban areas.

Residents in some places come in low; in other markets, they tend to overshoot, highlighting, the research said, the difference between public perception and the housing market’s reality.

Surprisingly, about a third of the respondents said they actively educate themselves on local market conditions, looking up prices online at least once a month. Here, Boomers were the most active, suggesting, perhaps, that they are thinking about moving down.

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Mo Money: Would-be home buyers could have more take-home pay this year, thanks to the higher tax brackets that took effect Jan. 1. So it might be a good idea to give a second look to people who failed to qualify for financing in 2023.

The Internal Revenue Service makes adjustments every year in the federal tax brackets to avoid pushing taxpayers into high-income slots even though their purchasing power remains essentially unchanged. The phenomenon is known as “bracket creep.”

The brackets for 2023 have shifted higher by about 5.4%, creating higher thresholds and saving taxpayers millions, the IRS says. That’s money that can be used to offset higher loan rates and housing prices, if you advise borrowers to adjust their 1099s accordingly.

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Note from my granddaughter: “I paid my rent. Now I have a place where I can starve.”

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Looking for more business? Consider joining your local investors club.

There’s one in almost every state, according to the National Real Estate Investors Association, which has a list on its website (nationalreia.org). The outfit claims some 120 local chapters and local groups as members, many of which hold monthly meetings with speakers. Join, sign up to speak about local lending trends and conditions, and make your case for members’ business.

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More people are living alone than ever, according to the latest Census Bureau figures. More than 37 million men and women reside all by their lonesome. That’s 29% of all households, and an increase of almost 5 million over the last decade.

The pandemic had something to do with that. The number of one-person households jumped 2.4 million from pre-COVID 2019 levels alone.

There’s no telling whether these folk are happy in their current digs. But if you want to target the singles market — turn them from loners to loaners, if you will — it might be a good idea to aim at women because they buy more often than men, a new LendingTree analysis found.

Single ladies own 10.95 million houses vs. 8.24 million for single guys. Put another way, single women own nearly 13% of all the country’s owner-occupied houses, whereas single men own just 10.3%.

The only states where male singles own more places than female loners are Alaska and North and South Dakota.

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Some 135 new home buyer assistance programs were introduced last year, according to Down Payment Resource, the Atlanta firm which keeps tabs on such programs. There are now 2,294 assistance programs nationwide.

The jump in assistance programs represents “a concerted effort by housing agencies to expand opportunities and break down barriers to home ownership,” says DRA’s Rob Chrane.

Notably, 804 programs and counting now allow for the purchase of manufactured homes, which typically have a lower point of entry than other housing types. In addition, 686 allow for the purchase of multi-family properties, allowing for buyers to become both owners and landlords to build wealth.

There’s also been a marked increase in the number of assistance programs targeting veterans and service members as well as Native Americans.

According to DPR, most of these programs are backed by municipalities, nonprofits and local or state housing finance agencies.

For a complete list of homebuyer assistance programs by state, visit https://downpaymentresource.com/wp-content/uploads/2024/01/HPI-state-by-state-data.Q42023.pdf.

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Fraud Alert: A “significant” number of mortgages produced in the last few years involve appraisals completed by unlicensed people masquerading as the real thing. They unlawfully use the identities of actual appraisers, come up with a valuation, and abscond with your money.

Lenders are being alerted to the problem by Fannie Mae, which is reminding them to do their due diligence when retaining services of appraisers and other outside vendors and utilize all available public records and licensing agencies in determining the validity of third-party documentation within loan files.

Red flags include files that fail to include the name and signature of the appraiser, signatures that appear to be forged or otherwise doctored, and names, phone numbers, and e-mail and street addresses that don’t match.

Meanwhile, more than nine out of every 10 title insurance companies say they were the victims or intended victims of cyber crime and wire fraud in 2023, according to the latest survey by the American Land Title Association. That’s up from 86% during the two-year period from 2020 to 2021.

The study found that title companies are pouring money into their prevention and mitigation efforts, some as much as $25,000 a year.

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Maybe it’s the water, which is often cited as the reason New York City’s bagels are the best there is. But maybe it also causes developers in the Big Apple to turn rotten.

First there was DJT, who has been convicted of cooking his books. And now its Nir Meir, a 49-year-old developer and several others who worked with the now shuttered HFA Capital Group and a separate construction firm. They are charged with bilking investors, subcontractors, and the city out of $86 million in a five-year-long fraud scheme.

Meanwhile, prominent real estate developer and venture fund manager Grant Cardone is instructing his team to cease investment in The City, declaring that “recent political decisions” — read that the Trump conviction — will lead to price deterioration

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Riddle: What can go a whole year and not age at all? The nation’s housing stock.

In 2021, the median age of an-owner occupied house was 40 years. In 2022, it was the same, according to the Census Bureau.

That’s the good news. The bad news is the housing stock “is aging rapidly” as construction of new dwellings “continues to fall behind,” according to Na Zhao, an economist at the National Association of Home Builders. Some 60% of our houses were built prior to 1980; 35%, before 1970.

New construction added nearly 1.7 million units to the housing stock between 2020 and 2022, but that’s a mere drop in the proverbial bucket, accounting for just 2% of all owner-occupied residences.

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The Department of Housing and Urban Development has given housing counseling agencies a shot in the arm, and that should do the same for marginalized folks who want to step onto the ownership ladder.

Specifically, HUD is making $40+ million grant funding available to support counseling that helps connect would-be buyers and renters find decent and affordable places to live. The money will be awarded to more than 150 housing counseling agencies and intermediary organizations throughout the country.

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As Bugs Bunny says, “That’s all folks.” Now I can see the top of my desk.