What the market predictors got wrong

Labor Day Message

Labor Day weekend is a huge weekend in our minds because it’s a turning point in the year. Basically, you have from this coming Tuesday until Thanksgiving to absolutely crush it before sales really slow for the holidays, your buyers head out of town, and nobody wants to leave their cozy fireplace.

We know this has not been an easy year so far. Deal volume is low right now. But there are buyers out there, and they need our help finding homes.

But in order to give them our best, we need to be at our best. That’s why we’re taking this holiday weekend off to recharge. We won’t be publishing a newsletter on Tuesday, but we will be back next Friday.

Until then, have a fantastic, fun, and hopefully relaxing holiday weekend!

- James and David

Home prices see biggest rise in 10 months

Nationwide, the median home sale price rose 5% year over year to $380,000, the biggest uptick in 10 months. That’s according to Redfin’s latest market update. Here are other key points:

• The typical monthly mortgage payment hit an all-time high of $2,649

• The total number of U.S. homes for sale is down 19%, the biggest drop since February 2022

• New listings are down 10%

• Pending sales declined 14% YoY

• Mortgage-purchase applications declined 27%, nearing their lowest level in about 30 years

Our take

Remember all the cynics who predicted a crash in home prices? They’ve clearly been proven wrong. Home prices are near all-time highs. But that doesn’t mean the housing market is rosy. Homes aren’t affordable right now, but buyers are still out there. To snag deals, we agents will need to do a lot of targeted prospecting. It’s certainly going to be a challenge, but we are willing to do the work.

Buyer traffic is stronger than normal

The latest data from Showtime shows that plenty of buyers are still out there, and they’re actively purchasing homes. As the above chart shows, in June 2023, home buyers were far more active than in pre-pandemic years (…before the market went bonkers).

Our take

This is a great reminder that we shouldn’t compare the market to the total aberration we saw during the pandemic. Yes, buyer traffic has slowed, but it’s still strong. Even with today’s mortgage rates, plenty of buyers are still making moves.

Mortgage rates level off but remain above 7%

The 30-year fixed-rate mortgage averaged 7.18% this week, dropping for the first time in five weeks. That’s according to the latest survey from Freddie Mac. Here are the key points to keep in mind:

• The 30-year fixed-rate mortgage has dropped from 7.23% to 7.18% in one week

• The 15-year fixed-rate was unchanged at 6.55%

• Mortgage applications ticked up this week

• If inflation continues to cool, rates are expected to trend downward

• At its September meeting, the Federal Reserve should provide clarity on where rates go next

Our take

We absolutely welcome this downward plunge in mortgage rates, but we’re not ready to call it a trend yet. We first need to see the economic numbers coming out in September. We need both inflation to go down AND the bond market to gain some more confidence in the 10-year treasury. Keep your fingers crossed. Everything we see indicates we’re heading in the right direction. We would just like it to hurry up already!

Schematics

The news that just missed the cut

• Two text scripts to use with home buyers right now

• Understanding the sales funnel: A guide for new real estate agents

• Help for more homeowners who missed mortgage or tax payments

• Things attorneys (allegedly) can do real estate agents can’t

• Inside the most expensive ZIP code in America

• China’s biggest homebuilder is fighting for its life.

Foundation Plans

Advice from James and David to win the day

This weekend gives us time to reflect. It’s a good time to take stock of where you are in your business. We’re in the home stretch for the year. Watch out for these early signs that your business may be at risk of decline:

You’re skipping follow-ups – If you’re not calling your old clients and prospects, we can promise you another agent is! Keep up with your follow-ups to build a sustainable business.

You rely on one lead source – This could be social media, referrals, paid ads, or anywhere you generate leads. If you’re fully reliant on one source and that source dries up, so does your business!

You aren’t managing your money properly – None of us look forward to paying taxes or business expenses, but it just comes with the territory. Be sure you’re setting aside cash for these critical costs before you pay yourself.

You’ve stopped learning – The minute you think you know it all is the minute you’ll lose your ability to grow as an agent. Stay hungry, keep developing, look for opportunities to stretch yourself, and find a mentor who pushes you to do more. You (and your business) will be better for it.

Start here to reframe, get back on track, and finish the year strong!

Just in Case

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

That’s a wrap on this edition of The Blueprint!

Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!

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

- James and David