TODAY’S RATES & HOUSING NEWS

Interest rates have improved to 6 month
lows with the Mortgage Backed Security
market (MBS) trading up +12 bps.

In the chart below, see the MBS
market since January 2024.
(lower the chart – the higher
interest rates)

You can see that mortgage interest
rates hit their high point in April, but
since April rates have gradually
improved even with some periods
of interest rates spiking.

Friday’s PCE Inflation Report came in
near expectations with Year over Year
inflation declining from 2.6% to 2.5%
and Core Inflation remaining at 2.6%.

This will be an important week
for interest rates with

THE FED MEETING ON WEDNESDAY
And THE BLS JOBS REPORT ON FRIDAY

A really positive week for interest
rates will include hints that the FED
could lower the Federal Funds Rate
in August, and lower than expected job
creation and/or a higher unemployment
rate.

Below are Mortgage News Daily’s
average interest rates across the
country. There are a lot of characteristics
that go into a mortgage rate – credit score,
investor, loan to value, loan amount,
costs, etc.

Please call me to go over your
specific scenario so we can price
your loan out accurately.

or reply to this email with the answers
to the questions below for Mortgage
Options for your scenario.

MORTGAGE QUOTE

What are your goals for Home Financing – Purchase, Refinance, Cash Out:
Purchase Price / or Home Value for Refinance:
Address or City and State of Property:
Is Property a Primary Residence, Investment Property, or Vacation Home:
Loan Amount You Would Like to Finance:
Current Balance of Mortgage (if applicable, for refinance only):
Estimated Credit Score:
Are You a Veteran or Active Member of the US Military: 
If you are a Veteran, do you get VA Disability:

Thank you!

6 COSTLY MISTAKES FOR
REAL ESTATE INVESTORS

https://www.biggerpockets.com/blog/top-6-mistakes-real-estate-investors-are-making-in-2024?utm_source=Iterable&utm_medium=email&utm_campaign=7.21.2024%20%7C%20Newsletter

During the pandemic, home prices soared
due to high demand coupled with low
inventory and mortgage rates.

But that rapid appreciation couldn’t
last forever. Now, data confirms prices
are still rising, just more moderately.
This healthier pace is actually a good thing.
It means home price growth is normalizing.

CROMFORD REPORT
*The Cromford Report is a detailed analysis of the
Phoenix Metro housing market. While many of our
partners & clients are in different areas, Phoenix
often starts housing trends and thus we think the
information is valuable regardless of your market*

Below is the Cromford Report’s commentary
on the NAR Settlement changes set to go
into effect on August 17^th, 2024.

With the NAR Commission Settlement
imminent, there is widespread uncertainty
and confusion across the industry about
how it will all play out. The uncertainty is
exemplified by the decision of the CMLS
not to offer best practices advice to its
members. The Council of Multiple Listing
Services (CMLS) represents 225 different
MLS providers across the country, and
has urged its members to have “thoughtful
conversations” and “pick your own adventure”.
This means we are likely to see different
implementations in different geographies.
The confusion is also exemplified by the
NAR’s FAQ web-page on the settlement
where the number of FAQs has risen
to more than 100, putting it well into
TLDR territory.

Recent surveys have shown that commission
rates have varied little across the regions
of the USA with buyer’s agents earning
between 2.6% and 2.8% historically while
listing agents have earned 2.8% to 3.2%. In
recent months these numbers have
fallen a little to 2.4% to 2.8% and 2.8%
to 3.0%. There is a lack of consensus
on what these numbers might look like
over the next year.

The impact of the settlement is
likely to be much more significant to
real estate agents than the housing
market itself, though some effects
are certainly possible. Our feeling
is that these would tend to reinforce
existing trends rather than change them.

We are at a low level of closing activity
with only 70,473 closed listings over
the past 12 months across all areas &
types. This is down from 74,060 a year
ago and well below the long-term average
of 85,101. We are still a long way above
the extreme low point of 48,491 that we
witnessed on June 30, 2008, so there is
room to fall. The uncertain legal and
procedural situation is not likely to increase
volumes and we may instead see the
declining closing rate continue for
some time before easing mortgage rates
are able to stimulate a recovery.

New home sales may benefit from
having their agent commissions clearly
communicated and this could continue to
grow their percentage share of sales.
Builder margins may also benefit from
an increasing number of transactions where
no external agent is involved, saving them
from paying any compensation to a buyer’s
agent or broker and allowing them to
compete harder on gross prices.

The DOJ has stated that “real estate
commissions in the USA greatly exceed
those in any other developed economy”
and their Antitrust Division seem
determined to lower them. They want buyer’s
agent commissions set between the buyer
and buyer’s agent and not determined at
all by the seller or the selling agent.
It is possible that the NAR settlement
does not go far enough for the Antitrust
Division to be satisfied that this
objective will be achieved.

While it is true that real estate commissions
are higher in the USA than elsewhere,
the duties performed by both buyer
and listing agents are usually more extensive
than in most other countries. It seems likely
that when the dust settles, buyers will end
up paying lower commissions than those
paid in the past on their behalf by the seller,
but buyers will also be getting a lot less
advice and support during the buying
process. This is not necessarily to their
advantage since a small error in buying can
have major financial consequences. These
can outweigh any small difference in
commission paid.

Clients tend to pay far more for legal
services in the USA than in foreign countries
too, but driving down the price of legal
advice will not necessarily improve or even
maintain the quality of that advice.
As in many walks of life, you tend to get
what you pay for.

Below is your weekly snapshot of Phoenix Metro housing.

Have a great week!