2024 – Page 27

Falling Mortgage Rates, Rising Supply Create Opportunity for Homebuyers This Summer, Even Amid Record-High Prices

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Homebuyers on a $3,000 monthly budget have gained over $20,000 in purchasing power since mortgage rates peaked in the spring A homebuyer on a $3,000 monthly budget can afford a $447,750 home with a 6.85% mortgage rate, the daily average as of July 11, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That buyer has gained $22,500 in purchasing power since mortgage rates hit a five-month peak in April, when they could have bought a $425,500 home with an average rate of 7.5%. Mortgage rates dropped to their lowest level since March on Thursday’s inflation report, and the supply of homes for sale is rising, giving buyers a sweet spot before competition picks up. To look at affordability another way, the monthly mortgage payment on the typical U.S. home—which costs roughly $400,000—is $2,647 with the current 6.85% rate. That’s down nearly $200 from $2,814 with a 7.5% rate. The drop in mortgage rates comes after the latest CPI report showed that inflation is cooling faster than expected and upped the chances that the Fed will cut interest rates by September. It’s likely that mortgage rates will continue declining slightly in advance of the expected interest-rate cuts, but it’s unlikely they’ll drop below 6% before the end of the year. Even though mortgage rates are declining, sale prices are still at record highs and total housing costs are historically high. Prices are unlikely to drop meaningfully in the near future. The other piece of good news for buyers: More homes to choose from Rising inventory is also promising for buyers: New listings of homes for sale are up 7% year over year, and the total number of homes for sale is near its highest level since late 2020. More homes are hitting the market partly because homeowners, many of whom are locked into ultra-low mortgage rates, are tired of waiting for rates to drop dramatically before listing their homes. Rates have been sitting at double pandemic-era lows for nearly two years, and homeowners have come to terms with the fact that if they wait for rates to drop to 3% or 4% before selling and moving onto their next home, they may be waiting for several years. The fact that rates are declining slightly right now may lure more would-be sellers off the sidelines. Homes are also sitting on the market longer than usual. More than 60% of homes that were on the market in May had been listed for at least 30 days without going under contract, up from 50% two years earlier. Two in five (40%) homes had been listed for at least twomonths without going under contract, up from 28% two years earlier. The uptick in homes for sale, along with the fact that many listings are growing stale, means many of the less-desirable homes on the market are having a hard time finding a buyer. That gives homebuyers in some places a chance to get a home for under the asking price and negotiate for other money savers, like home repairs or help with closing costs. “Now is a good time–at least compared to the recent past–for serious house hunters to get under contract on a home,” said Redfin Chief Economist Daryl Fairweather. “The combination of declining mortgage rates, rising supply and a lot of inventory growing stale means buyers have a window where they have more purchasing power than earlier in the year and more homes to choose from. But it’s hard to say how long the window will last. Declining rates should bring many homebuyers back to the market soon, which means competition would tick up and home prices would increase even faster than they already are. It’s also possible rates drop further in 2025, which would make monthly costs decline more and increase competition even more. One thing is for sure: lower rates will lead to more home sales.” To view the full report, please visit: https://www.redfin.com/news/mortgage-rates-fall-payments-down

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U.S. Foreclosure Starts Decrease 3.5 Percent in First Six Months of 2024; Average Days to Complete a Foreclosure Up Second Quarter in a Row; June and Q2 2024 Foreclosure Activity Post Annual Declines ATTOM, a leading curator of land, property and real estate data, released its Midyear 2024 U.S. Foreclosure Market Report, which shows there were a total of 177,431 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2024. That figure is down 4.4 percent from the same time period a year ago but up 7.8 percent from the same time period two years ago. Historical First Half US Foreclosure Activity Chart “In contrast to the first half of 2023, foreclosure activity across the United States experienced a decline in the first half of 2024,” stated Rob Barber, CEO for ATTOM. “In addition, U.S. foreclosure starts also decreased by 3 percent in the first six months of 2024. These shifts could suggest a potential stabilization in the housing market; however, monitoring these evolving patterns remains crucial to understanding the full impact on the real estate sector.” States that saw the greatest increases in foreclosure activity compared to a year ago in the first half of 2024 included South Dakota (up 93 percent); North Dakota (up 86 percent); Kentucky (up 73 percent); Massachusetts (up 46 percent); and Idaho (up 30 percent). New Jersey, Illinois, and Florida post highest state foreclosure ratesNationwide, 0.13 percent of all housing units (one in every 794) had a foreclosure filing in the first half of 2024. States with the highest foreclosure rates in the first half of 2024 were New Jersey (0.21 percent of housing units with a foreclosure filing); Illinois (0.21 percent); Florida (0.20 percent); Nevada (0.19 percent); and South Carolina (0.19 percent). Other states with first-half foreclosure rates among the 10 highest nationwide were Maryland (0.19 percent); Connecticut (0.19 percent); Delaware (0.18 percent); Ohio (0.18 percent); and Indiana (0.16 percent). Highest metro foreclosure rates in Lakeland, Columbia, and Atlantic CityAmong the 224 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in the first half of 2024 were Lakeland, Florida (0.32 percent of housing units with foreclosure filings); Columbia, South Carolina (0.31 percent); Atlantic City, New Jersey (0.28 percent); Cleveland, Ohio (0.27 percent); and Spartanburg, South Carolina (0.27 percent). Other major metro areas with foreclosure rates ranking among the top 10 highest in the first half of 2024 were Jacksonville, Florida (0.25 percent of housing units with a foreclosure filing); Bakersfield, California (0.25 percent); Elkhart, Indiana (0.24 percent); Orlando, Florida (0.24 percent); and Chicago, Illinois (0.24 percent). Foreclosure starts down 3.5 percent from last yearA total of 130,369 U.S. properties started the foreclosure process in the first six months of 2024, down 3.5 percent from the first half of last year and down 32 percent from the first half of 2020. States that saw the greatest number of foreclosures starts in the first half of 2024 included Texas (15,375 foreclosure starts); Florida (15,251 foreclosure starts); California (14,964 foreclosure starts); New York (7,523 foreclosure starts); and Illinois (7,240 foreclosure starts). Bank repossessions decline in first half of 2024 from last yearLenders foreclosed (REO) on a total of 18,726 U.S. properties in the first six months of 2024, down 17 percent from the first half of 2023 and down 10 percent from the first half of 2022, but up 92 percent from the first half of 2021. States that posted the greatest number of REOs in the first half of 2024 included California (1,575 REOs); Pennsylvania (1,568 REOs); Illinois (1,540 REOs); Michigan (1,432 REOs); and Texas (1,197 REOs). Q2 2024 foreclosure activity below pre-recession averages in 79 percent of major marketsThere were a total of 89,466 U.S. properties with a foreclosure filings during the second quarter of 2024, down 6 percent from the previous quarter and down 8 percent from a year ago. The national foreclosure activity total in Q2 2024 was 68 percent below the pre-recession average of 278,912 per quarter from Q1 2006 to Q3 2007. Second quarter foreclosure activity was below pre-recession averages in 177 out 224 (79 percent) metropolitan statistical areas with a population of at least 200,000 and sufficient historical foreclosure data, including New York, Los Angeles, Chicago, Dallas, Houston, Miami, Atlanta, San Francisco, Riverside-San Bernardino, Phoenix, and Detroit. Metro areas with second quarter foreclosure activity above pre-recession averages included Honolulu, HI; Richmond, VA; Baltimore, MD; Virginia-Beach, VA; Albany, New York; and Montgomery, AL. Average time to foreclose increases for second quarter in a rowProperties foreclosed in Q2 2024 had been in the foreclosure process an average of 815 days. That figure was up 11 percent from the previous quarter and down 33 percent from Q2 2023. Average Days to Complete Foreclosure States with the longest average foreclosure timelines for homes foreclosed in Q2 2024 were Louisiana (3,686 days); Hawaii (2,597 days); New York (2,034 days); Georgia (1,929 days); and Nevada (1,852 days). States with the shortest average foreclosure timelines for homes foreclosed in Q2 2024 were New Hampshire (82 days); Texas (147 days); Minnesota (151 days); Oregon (206 days); and Montana (212 days). June 2024 Foreclosure Activity High-Level Takeaways Media Contact:Megan Huntmegan.hunt@attomdata.com SOURCE ATTOM

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Leader Recognized for Success Ensuring Creative and Service Excellence Incenter Marketing, a national branding, marketing, public relations, and sales engagement firm with specialties in the mortgage and finance industries, announced the promotion of Jake Haynes to Director of Creative Operations. In his new role, Mr. Haynes is responsible for maximizing the creative impact of every Incenter Marketing program using the most effective strategies, tactics and tools, while ensuring consistently topnotch service. “Since Jake became part of the Incenter Marketing team, he has developed a legion of ‘fans’ who appreciate that design is just the beginning of his talents. He is a true leader who automatically takes full ownership of every project and its seamless delivery. He is constantly seeking out new opportunities to grow his value, master the next generation of marketing technology, and bolster his colleagues’ success. He has earned this well-deserved promotion and Incenter Marketing’s clients are the beneficiaries,” said Bruno Pasceri, President of parent company Incenter Lender Services (Incenter). “I am so excited by this opportunity to continue building our clients’ businesses through strong creative marketing programs. Our team is filled with award-winning professionals who are at the top of their game, whether as brand strategists, digital marketers, designers, or media relations leaders. When we come together to bring a brand to life, the results are powerful,” said Mr. Haynes, who joined Incenter Marketing in 2020 as a Senior Graphic Designer. The new Director of Creative Operations has more than a decade of experience in various creative roles, working with clients from a broad range of industries such as mortgage and lending, automotive retail, home improvement and more. He holds a B.A. in global communications and graphic design from Roger Williams University. Contact Mr. Haynes at jake.haynes@incenterls.com. About Incenter Marketing Incenter Marketing, an integrated branding, marketing, public relations and sales engagement firm, helps organizations build brands that are better able to transcend market fluctuations because they are true to themselves in all market conditions. More information about Incenter Marketing—which focuses on lending, housing finance, capital markets, fintech, B2B, B2C and professional service firms—is available at incentermarketing.com. Contact Dawn Ringel Dawn.ringel@incenterls.com; 617-285-0652

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Rents are still most expensive in large coastal markets, but they are growing fastest in smaller markets in the Northeast and Midwest While rents are most expensive in large coastal markets like New York City, the San Francisco Bay Area and Boston, the fastest-growing rents are in unexpected places. New data from Zillow® shows rents are growing faster in Hartford than any other major market, and Cleveland and Louisville aren’t far behind. “More people move during the summer, which causes the rental market to heat up,” said Skylar Olsen, chief economist at Zillow. “Renters are being drawn to more affordable areas within the Northeast and Midwest. Commuting into New York City or Boston from places like Hartford or Providence might have been a deterrent before, but in this new age of remote and hybrid work, the savings seem worth it for many renters, even if it means an occasional painful commute.” Rents have grown 7.8% over the past year in Hartford, more than any other major market. Cleveland (7.2%), Louisville (6.8%), Providence (6.3%) and Milwaukee (5.7%) round out the top five. The typical rent eclipses $3,000 in a few coastal markets. New York City is the most expensive rental market with a typical rent of $3,472 across the metro area, according to the Zillow Observed Rent Index (ZORI), while StreetEasy® data shows the median asking rent is $4,400 in Manhattan. Coming in just behind is the San Jose metro area with a typical rent of $3,429, followed by Boston ($3,127), San Francisco ($3,119) and San Diego ($3,083). Los Angeles, with a typical asking rent of $2,975, could join that list later this summer if the current pace of rent growth holds. Nationally, the typical rent is $2,054, according to ZORI. That is up 3.5% from last year, the fastest annual growth since last July. Metropolitan Area* Typical Rent (ZillowObserved Rent Index –ZORI) ZORI Month overMonth Change ZORI Year over YearChange United States $2,054 0.5 % 3.5 % New York, NY $3,472 0.9 % 3.8 % Los Angeles, CA $2,975 0.5 % 2.7 % Chicago, IL $2,118 0.9 % 5.0 % Dallas, TX $1,822 0.4 % 0.2 % Houston, TX $1,730 0.6 % 2.2 % Washington, DC $2,455 0.8 % 5.0 % Philadelphia, PA $1,898 0.5 % 4.0 % Miami, FL $2,813 0.2 % 2.4 % Atlanta, GA $1,951 0.4 % 0.9 % Boston, MA $3,127 0.5 % 4.6 % Phoenix, AZ $1,889 0.0 % 1.1 % San Francisco, CA $3,119 0.5 % 1.6 % Riverside, CA $2,560 0.2 % 3.0 % Detroit, MI $1,480 0.6 % 5.2 % Seattle, WA $2,283 0.7 % 3.9 % Minneapolis, MN $1,678 0.3 % 3.0 % San Diego, CA $3,083 0.6 % 1.8 % Tampa, FL $2,114 0.1 % 1.5 % Denver, CO $2,090 0.4 % 2.4 % Baltimore, MD $1,871 0.8 % 3.4 % St. Louis, MO $1,423 0.8 % 4.9 % Orlando, FL $2,098 0.5 % 1.1 % Charlotte, NC $1,815 0.7 % 1.2 % San Antonio, TX $1,503 0.2 % -0.1 % Portland, OR $1,876 0.9 % 2.6 % Sacramento, CA $2,321 0.4 % 3.7 % Pittsburgh, PA $1,473 1.0 % 4.4 % Cincinnati, OH $1,542 0.6 % 5.2 % Austin, TX $1,839 0.2 % -3.0 % Las Vegas, NV $1,826 0.7 % 3.0 % Kansas City, MO $1,482 0.8 % 5.5 % Columbus, OH $1,559 1.2 % 4.7 % Indianapolis, IN $1,589 0.4 % 4.0 % Cleveland, OH $1,447 1.1 % 7.2 % San Jose, CA $3,429 1.0 % 3.0 % Nashville, TN $1,940 0.6 % 1.2 % Virginia Beach, VA $1,771 0.6 % 5.3 % Providence, RI $2,118 0.5 % 6.3 % Jacksonville, FL $1,768 0.1 % 0.8 % Milwaukee, WI $1,394 0.6 % 5.7 % Oklahoma City, OK $1,358 0.7 % 3.1 % Raleigh, NC $1,793 0.6 % 0.4 % Memphis, TN $1,477 0.5 % 2.7 % Richmond, VA $1,689 1.2 % 5.4 % Louisville, KY $1,417 0.6 % 6.8 % New Orleans, LA $1,685 0.3 % 2.9 % Salt Lake City, UT $1,729 0.8 % 1.9 % Hartford, CT $1,871 1.1 % 7.8 % Buffalo, NY $1,379 0.2 % 5.4 % Birmingham, AL $1,419 0.5 % 3.1 % SOURCE Zillow

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As the landscape of property insurance changes, real estate investors must rethink their risk management strategies. Bundling rental properties with personal lines policies may no longer be the most effective solution given the rental market’s scale and the frequency of claims. The Rental Market Landscape According to John Burns Research & Consulting, there are approximately 14 million SFR rental properties. Notably, 11.2 million (80%) are owned by ‘mom-and-pop’ landlords with 1-9 rentals. This prevalence of small-scale landlords potentially exposes them to unnecessary risk by bundling rental properties with personal policies. The Bundling Savings Myth For years, bundling has been promoted as a cost-saving measure. However, this approach often falls short for rental properties. The minimal savings achieved through bundling pale in comparison to potential risks and coverage gaps. Prioritizing comprehensive protection over marginal cost reductions is essential. Frequency and Cost of Rental Property Claims Understanding the frequency and cost of rental property claims emphasizes the need for proper coverage: These statistics highlight the importance of robust coverage without sublimits, especially for water damage. Safeguarding Personal Assets A major risk of bundling rental properties with personal policies is the potential impact on personal lines coverage. A claim from a rental property could affect the eligibility and rates of your personal home and auto policies. By separating these risks, you can protect your personal assets and maintain favorable personal lines rates. Enhanced Coverage with Specialized Landlord Policies Dedicated landlord policies, like those offered by SES Risk Solutions, provide coverage limits more appropriate for rental properties. Unlike standard DP3 policies, our offerings include: These features ensure that your investments are fully protected with comprehensive coverage. Adapting to Market Trends Recent shifts in the insurance market have led large carriers to withdraw from states or become highly selective about risks. This trend highlights the importance of working with specialized insurers who understand the unique needs of real estate investors and can provide stable, reliable coverage. The Advantages of Commercial Lines Policies Writing rental properties on commercial lines policies offers several benefits: This approach not only offers superior protection but also aligns with the professional nature of real estate investing. Modern Risk Management Your primary responsibility as an investor is to ensure your assets are well-protected. Moving beyond the one-size-fits-all approach of bundling, specialized landlord policies offer: The Future of Real Estate Investment Insurance As the real estate investment landscape continues to evolve, so must our approach to insuring these assets. By unbundling rental properties from personal lines and embracing specialized landlord policies, you can secure comprehensive, flexible, and robust coverage to protect your investments and grow your portfolio with confidence. At SES Risk Solutions, we’re dedicated to providing innovative insurance solutions tailored to real estate investors’ unique needs. We invite you to partner with us in educating yourself about the benefits of specialized landlord policies and implementing effective risk management strategies for your investment properties. By reimagining our approach to insuring rental properties, we can add significant value to your investment strategies and position ourselves as true risk management partners in your real estate endeavors. Scott Phillips SVP, Strategic Partnerships SES Risk Solutions

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Major Home-Ownership Expenses Now Consume 35 Percent of Average Wage Nationwide; Portion Hits High Point in Over a Decade as Median Home Price Soars to Another Record ATTOM, a leading curator of land, property and real estate data, released its second-quarter 2024 U.S. Home Affordability Report showing that median-priced single-family homes and condos remained less affordable in the second quarter of 2024 compared to historical averages in 99 percent of counties around the nation with enough data to analyze. The latest trend continued a pattern, dating back to early 2022, of home ownership requiring historically large portions of wages around the country amid ongoing high residential mortgage rates and elevated home prices. The report also shows that major expenses on median-priced homes consumed 35.1 percent of the average national wage in the second quarter – marking the high point since 2007 and standing well above the common 28 percent lending guideline. Both the historic and current measures represented quarterly and annual setbacks following a brief period of improvement from late 2023 into early 2024. The shifts came as the national median home price spiked to a new high of $360,000 during the Spring buying season and mortgage rates remained around 7 percent, leading to increases in the cost of owning a home that outpaced recent increases in wages. As a result, the portion of average wages nationwide required for typical mortgage payments, property taxes and insurance grew about three percentage points from both the first quarter of this year and the second quarter of last year. “The latest affordability data presents a clear challenge for home buyers. While home prices are increasing and mortgage rates remain relatively high, these factors are making homes less affordable,” said Rob Barber, CEO for ATTOM. “It’s common for these trends to intensify during the Spring buying season when buyer demand increases. However, the trends this year are particularly challenging for house hunters, more so than at any point since the housing market boom began in 2012. As the 2024 buying season progresses into the Summer, we will continue to monitor the data closely.” The patterns during the months running from April through June came as the national median home price rose 7.3 percent quarterly and 4.7 percent annually. Further hampering buyers during the second quarter were average 30-year home-mortgage rates that ended the quarter at about 6.9 percent, or more than double where they stood in 2021. Those factors helped boost home ownership expenses by about 10 percent in the second quarter of 2024 after declining slightly in the prior two quarters. The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage payments, property taxes and insurance — on a median-priced single-family home, assuming a 20 percent down payment and a 28 percent maximum “front-end” debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the U.S. Bureau of Labor Statistics. Compared to historical levels, median home ownership costs in 582 of the 589 counties analyzed in the second quarter of 2024 were less affordable than in the past. That number was up just slightly from 579 of the same counties in the first quarter of this year and from 577 in the second quarter of last year. But it was more than 15 times the figure from early 2021. Meanwhile, the portion of average local wages consumed by major home-ownership expenses on typical homes was considered unaffordable during the second quarter of 2024 in about 80 percent of the 589 counties in the report, based on the 28 percent guideline. Counties with the largest populations that were unaffordable in the second quarter were Los Angeles County, CA; Cook County (Chicago), IL; Maricopa County (Phoenix), AZ; San Diego County, CA, and Orange County, CA (outside Los Angeles). The most populous of the 115 counties with affordable levels of major expenses on median-priced homes during the second quarter of 2024 were Harris County (Houston), TX; Wayne County (Detroit), MI; Philadelphia County, PA; Cuyahoga County (Cleveland), OH, and Allegheny County (Pittsburgh), PA. National median home price jumps quarterly and annually in most marketsThe national median price for single-family homes and condos shot up to $360,000 in the second quarter of 2024 – $15,000 more than the previous high of $345,000 hit in the Spring of 2022. The latest figure was up from $335,500 in the first quarter of 2024 and from $344,000 in the second quarter of last year. At the county level, median home prices rose from the first quarter to the second quarter of this year in 514, or 87.3 percent, of the 589 counties included in the report. Annually, they followed a similar pattern, up in 441, or 74.9 percent of those markets. Data was analyzed for counties with a population of at least 100,000 and at least 50 single-family home and condo sales in the second quarter of 2024. Among the 47 counties in the report with a population of at least 1 million, the biggest year-over-year increases in median prices during the second quarter of 2024 were in Orange County, CA (outside Los Angeles) (up 16.2 percent); Alameda County (Oakland), CA (up 12 percent); King County (Seattle), WA (up 11.3 percent); Santa Clara County (San Jose), CA (up 9.8 percent) and Nassau County, NY (outside New York City) (up 8.9 percent). Counties with a population of at least 1 million where median prices remained down the most from the second quarter of 2023 to the same period this year were Honolulu County, HI (down 3.8 percent); Tarrant County (Forth Worth), TX (down 1.5 percent); Oakland County, MI (outside Detroit) (down 1.4 percent); Hennepin County (Minneapolis), MN (down 1.1 percent) and Fulton County (Atlanta), GA (down 1 percent). Prices growing faster than wages in half the U.S.With home values mostly up annually throughout the U.S., year-over-year price changes outpaced changes in weekly annualized wages during the second quarter of 2024 in 293,