This weekend, ResiClub PRO members will receive research articles examining property taxes and regional home price overvaluation/undervaluation estimates.
Economic forecasting has never been an easy task, and it becomes even more challenging when confronted with unprecedented economic events like COVID-19 lockdowns and unparalleled levels of government intervention, followed by a rapid cycle of interest rate hikes.
Look no further than recent mortgage rate forecasts. Last year marked the second year in a row, mortgage rate forecasters at large have missed—big time. That raises the question: can we trust mortgage rate predictions at all right now?
ResiClub’s latest roundup of quarterly mortgage rate forecasts shows that most forecasters still expect mortgage rates to gradually decrease over the next 18 months. One reason being that as the Federal Reserve begins to cut rates, the bond market is expected to become less volatile, leading to a slight decline in mortgage rates.
The average 30-year fixed mortgage rate as of Friday is 6.91%.
By the final quarter of 2025, Fannie Mae expects that to slide to 6.0%. While Wells Faro’s model expects 5.8%, and the Mortgage Bankers Association estimates 5.5%.
IF those forecasts come to fruition (Note: ResiClub takes all forecasts with a grain of salt), it’d mean that housing affordability would still remain strained in 2024 and 2025.
“The housing market is likely to continue to face the dual affordability constraints of high home prices and elevated interest rates in 2024… Hotter-than-expected inflation data and strong payroll numbers are likely to apply more upward pressure to mortgage rates this year than we'd previously forecast, as markets continue to evolve their expectations of future monetary policy. Still, while we don’t expect a dramatic surge in the supply of homes for sale, we do anticipate an increase in the level of market transactions relative to 2023—even if mortgage rates remain elevated,” wrote Doug Duncan, chief economist of Fannie Mae, on Tuesday.
A new report by John Burns Research and Consulting (JBREC) shows year-over-year rent growth for different categories throughout the build-to-rent sector.
According to JBREC, rents for horizontal apartments are down (-3.0%) on a year-over-year basis. While rents for single-family detached homes (+1.0%), townhomes (+2.0%), single-level rowhomes (+3.0%), and mixed communities (+5.0%) all slightly edged up on a year-over-year basis.
Last week, the National Association of REALTORS (NAR) reached an agreed settlement in the commission lawsuit. The proposed settlement, which is still subject to court approval, involves a payment of $418 million in damages and amendments to several rules. According to NAR, as part of the agreement, “NAR has agreed to put in place a new MLS rule prohibiting offers of broker compensation on the MLS.”
To better understand how this could impact the residential real estate industry heading forward, ResiClub is running a series of opinions from insiders across the industry. (Sharing the commentary doesn't mean ResiClub endorses the commentary).
Today, we’re featuring commentary from Nick Narodny, founder, and CEO of the Sequoia Capital-backed real estate marketplace Aalto. This was originally posted on LinkedIn.
“FIRST: I think the DOJ will reject this settlement** They’ve already stated that they want commission to be fully decoupled when they rejected the MLS PIN settlement. This settlement does not do that; sellers can still pay buyer commission. That said there is so much press, they may be under too much pressure to reject so... IF the settlement goes through. Here are some of the things that may happen. Note: these aren't all my hot takes and I'm certainly not 100% confident in them but most articles you read are missing the point: 1) The commission rate isn't going to change much for next year or so - just because the buyer commission isn’t on the MLS, doesn’t mean listing agents won’t tell their buyers to offer it 2) Brokerages will ask agents to get buyer/broker agreements - where the buyer agrees to pay the full fee, even if the seller doesn’t agree in the offer. Brokerages are already doing this. This will cause lots of ripple effects but I'm not sure what they are yet 3) The Majority of offers will be submitted with "full" buyer's broker commission - and the listing agents will suggest that their client accepts it 4) Brokerages will hoard listings - One of the main values of the MLS for brokerages is “cooperating compensation.” Without that, brokerages may start to post listings only to their own website or internal database to drive traffic and buyers to their brand 5) Everyone leaves NAR in the next 3 years - if MLSs lose relevance there is no reason to pay fee. We may see some new brokerage-sharing membership that does the same thing NAR was doing with sharing of commissions and listing info. Bringing us right back to where we are today. 6) Eventually, many buyers will just go to the listing agent - buyers won’t sign the agreement so they wait and when the right home comes along they just go to the listing agent 7) Zillow starts to layer StreetEasy features nationwide - As MLS loses power you can bet Zillow will be making a play and it will look like the way StreetEasy works in NYC,” wrote Narodny.
