This is a game-changer for home loans

Approaching mid-year

Happy Memorial Day weekend everyone! Our loyal readers know that we like to mark holidays in this newsletter because, not only are they an important time to recharge and relax, but to take stock of where we are in the year. Are we on track with our goals? How can we be more productive?

In today’s Foundation Plans, we laid out three quick tips for making sure you are at the top of your game. We admit–some of them may seem either simple or obvious, but we do think that it’s those small daily habits that lead to long-term success.

We also encourage you to pay special attention to our second story today. The Department of Veteran Affairs announced a big change coming to VA loans, and it will certainly impact buyers and agents around the country.

On the subject of our veterans, we want to take this time to give our special thanks to all our readers who serve or have served this country. We wish you all a happy holiday weekend!

- James and David

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Sales of new construction homes drop in April

Sales of newly-built homes dropped 4.7% in April compared to March, and fell 7.7% from the prior year. That’s according to the latest update from the U.S. Census. Here’s what else it reports:

• The median price of a new home sold in April was $433,500, 3.9% higher than in April 2023, but down 1.4% from March.

• Newly-built homes are selling at a pace below the 5-year average.

• Builders say they cannot lower new construction home prices due to high costs for land, labor, and materials.

• New single-family home inventory was at 480,000 in April, up 12.1% from a year ago,  the biggest year-over-year supply gain since December 2022. That represents 9.1 months’ supply at the current building pace.

Our take

We’re not surprised by these numbers. When the average rate on the 30-year fixed mortgage shot up from 6% in March to 7.5% in April, we knew this was coming. Plus, as the inventory of existing homes has increased, demand for new construction homes cooled as homebuyers gained more choices. You can see that in the inventory of unsold newly built homes. New home inventory is up 12.1%, the biggest year-over-year supply gain since December 2022.

VA will allow homebuyers to pay agents

This week, the Department of Veterans Affairs indicated it will temporarily lift its ban on buyers paying for real estate representation, according to comments made by Michelle Corridon, the VA's deputy director of policy at a Mortgage Bankers Association conference in New York.

Corridon’s comments were met with relief from the real estate industry, as the VA’s home loan guarantee is the only loan program with this explicit ban. Veteran buyers have limited options in situations where the listing broker makes no offer of compensation to the buyer broker. This potentially leaves veterans without professional representation or forces them to switch to less favorable loan products.

Our take

Even though it is temporary, this is a good move by the VA. It’s also a big deal. Under current VA rules, only the seller can pay the buyer agent. Before this rule change, VA mortgage rules prohibited homebuyers from paying their agent in ANY way, which is a significant issue in light of upcoming changes to compensation coming from the NAR settlement. If this change hadn’t happened, agents representing veteran home buyers would have no guarantee that they would get paid. This would undeniably be bad for home-buying-veterans in the marketplace. With this rule change, the VA has eliminated that fear, at least, temporarily.

Cities where rents are dropping the most

Apartment rents fell for the ninth consecutive month, including in once-hot "Zoomtowns" where remote workers moved during the pandemic. 

In April, the median rate for an apartment in the nation's 50 largest metropolitan areas was $1,723, according to a new report from Realtor.com. That’s 0.7% ($12) less than in April 2023, but still 22.5% higher than the pre-pandemic rent rate of $1,407 in April 2019.

Top 10 cities where apartment rents have dropped the most year-over-year:

1. Nashville, TN: -8.4%

2. Austin, TX: -8.3%

3. San Antonio, TX: -8.1%

4. Orlando, FL: -5.9%

5. Charlotte, NC: -5.6%

6. Atlanta, GA: -5.6%

7. Baltimore, MD: -5.6%

8. Raleigh, NC: -5.3%

9. Memphis, TN: -4.9%

10. Phoenix, AZ: -4.6%

Our take

Although rents are steadily going down, the declines from year-to-year are shrinking. That means tenants are seeing minimal savings. It’s no wonder that housing or shelter costs were one of the key drivers in the latest CPI report. Until rents drop at a faster pace, shelter costs are going to slow the progress we’re going to see on inflation.

Schematics

The news that just missed the cut

• Real Brokerage just announced the launch of Real Luxury

• The drama that’s happening with Starwood’s real estate fund

• Private equity and insurance companies are piling into residential mortgages

• How many homes investors are actually buying 

• New trend on the rise: Renting in one city and buying in another

Foundation Plans

Advice from James and David to win the day

We’re just a week away from hitting the six-month mark for this year. Are you managing your time effectively to hit your goals? There are only so many hours in a day. Today, we’d like to give you some tips and strategies to master your time and productivity.

Preparation is key – You don’t want to wake up and say, “What am I doing today?” You want to eliminate any anxiety and uncertainty about the week. Make sure you know what you’re going to do each day, and have a plan of attack ready BEFORE the day, or even the week, begins. We recommend spending an hour every Sunday night reviewing your past week and previewing the next one. Ask yourself questions about the previous week. Who did I talk to? How was my sales activity? Who did I meet? Who needs to be in my CRM? Then ask questions about this week. Who are my hottest targets? Who am I trying to meet? What family/personal stuff is on my agenda? Basically, use the past to plan ahead for the future.

Block your time and batch your activities – Once you’ve decided what you’re going to do each day, we recommend blocking your time and batching your activities. For example, give yourself a two-or-three hour block on Wednesday to farm an area or make all your follow-up calls. But also batch your activities. Instead of writing an offer letter one minute and then making a follow-up phone call the next, group your similar activities together so that you get into a rhythm and flow. Trust us. You’ll be more effective that way. 

Hold yourself accountable – Each Monday, every member of our team, including us, meets to discuss what we did in the past week. How many sales did we close? How many new contacts did we make? How many pending sales are in the pipeline? How closer are we to hitting our revenue goals? If you don’t have a team, get yourself a mentor or a person you trust and meet with them in person or via video. Make it a non-negotiable. The meeting doesn’t have to be long. Just enough to make sure you are staying on track.

To get started and learn how productive agents do it, start here and here.

To learn more about Estate Media, visit their website.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

Have a wonderful Memorial Day weekend friends. As we said up top, take time to give thanks to all who serve or have served this country. We cannot live our lives without the protection they provide us. Memorial Day is a summons to gratitude.

Thanks for reading, and we’ll see you back here on Tuesday!

- James and David