Slow “Start” to Spring Home Construction
Housing Starts and Building Permits for single-family homes fell from February to March, while sales of existing homes also declined for the second month in a row. Consumer inflation remains red hot.
Single-family Starts, Existing Home Sales Decline
Ongoing supply chain disruptions continue to impact the construction of new homes, especially single-family homes. While Housing Starts, which measure the beginning of construction on homes, rose by 0.3% overall from February to March, starts for single-family homes declined 1.7%, per the Commerce Department. Building Permits for single-family homes also fell 4.8% from February to March, which was a disappointment as they represent future construction.
Rising costs and higher interest rates caused builder confidence to decline for the fourth consecutive month in April, as the National Association of Homebuilders (NAHB) Housing Market Index fell two points to 77. Of particular note, the component of the index that measures buyer traffic dropped six points to 60. However, any reading over 50 on this index that ranges from 0 to 100 indicates more builders see conditions as good rather than poor.
Sales of existing homes also fell 2.7% from February to March, according to the National Association of REALTORS®. The slower demand helped the inventory of unsold homes increase to 950,000 at the end of March, which is up 11.8% from February. However, this level of unsold inventory equals just a 2 months' supply of homes, whereas a 6 months' supply is more reflective of a healthy housing market.
Lawrence Yun, NAR’s chief economist, noted, “The housing market is starting to feel the impact of sharply rising mortgage rates and higher inflation taking a hit on purchasing power.” He added, “Still, homes are selling rapidly, and home price gains remain in the double-digits.”
Rising Inflation Remains a Reality
The Consumer Price Index (CPI) for March showed that inflation continues to rise, as the annual reading of 8.5% was the highest level we’ve seen since 1981. While surging food, energy and shelter costs were a big reason for the increase, there was a glimmer of hope that inflation may be easing.
When stripping out these volatile food and energy costs, what’s known as “Core CPI” rose just 0.3% from February to March, which was below estimates. Federal Reserve Governor Lael Brainard called this a “welcome” development in the Fed's efforts to lower inflation.
Getting inflation in check is crucial for many reasons. Not only does high inflation mean higher costs for goods, but it also reduces the value of fixed investments like bonds. Home loan rates are inversely tied to a type of bond called Mortgage-Backed Securities. Because rising inflation can cause mortgage bonds to worsen, or move lower, home loan rates can move higher when this happens, as we've seen this year.
Despite the recent uptick, home loan rates remain attractive on a historical basis. If you’re considering a home purchase this year and want to review your financing options, reach out any time. I’m happy to help!
3 Ways to Make Your Writing Shine
These simple writing tips can help your emails, social media posts and website generate a great response.
Appeal to your clients’ emotions by sharing how a home’s features can make a difference in their daily lives. For example, if you’re selling a house with a large backyard, you could describe it as the perfect spot to relax and enjoy time with friends and family. Or, if a home is near sought-after shops and restaurants, share that your clients would be able to skip the hunt for parking and walk to one of the neighborhood’s hottest spots for brunch. Listing a home near major freeways? Note that your clients will be able to save time and money by shortening their commute.
Acknowledge a pain point your clients are experiencing, and then show how you have the solution for their needs. For instance, if your buyers are worried about how competitive the market is, then you could highlight your years of experience. Explain that your connections with other agents in the local market mean you often hear about homes before they’re officially listed, giving your clients an edge in placing an offer on a home they love.
Write first and edit later, so you can stay in the flow without worrying about proper punctuation or judging yourself. Ask a trusted colleague to review what you wrote to see if you’ve achieved your goals of appealing to your readers’ emotions and addressing the challenges they’re currently experiencing. When you review your writing, read it out loud. If you stumble in any spots, that’s a great indicator to reword or clarify that section to give it even more punch.
You’ll connect with more clients and prospects thanks to these writing rules that get results.
Source: The Close
The REAL Deal
How to Help Homebuyers Avoid Moving Scams
Moving scams are an unfortunate reality these days. Share these tips and red flags with your clients to help them protect themselves during their move.
Ask trusted friends, family and colleagues for recommendations and be sure to also read consumer reviews beyond those posted directly on a company’s website. In addition, try to find a company with a long history of positive ratings. Sometimes, companies with negative reviews may change their names to avoid being associated with that prior commentary. Check the Better Business Bureau as well for any reports filed against the company. You can also search for interstate movers in the Department of Transportation’s Federal Motor Carrier Safety Administration database.
Get several written estimates. This will not only help you compare costs, but it will also help you gauge a typical price range for your move. Be wary of any estimate that is significantly lower than others, as it could be a sign that add-on charges may be ahead. Also, avoid companies that demand a large or cash down payment, as there’s a chance they could take your money and disappear. Ensure the mover’s website lists a physical address, mover’s registration or proof of insurance.
Read the contract thoroughly before signing it, and confirm it includes set pick-up and drop-off dates as well as a clear explanation regarding how the charges will be calculated. If the contract is only partially complete, do not sign it, as this can be a sign that the mover may add fees you weren't expecting. Also, document every point of contact with the movers, so you have a clear history of what was communicated to you.
Create an inventory of all your possessions via a written list or moving app. Numbering boxes can also help you quickly realize if anything goes missing.
These tips will help ensure your clients’ move to their new home is a safe and smooth one.