The Accunet Mortgage and Realty Show
The Accunet Mortgage and Realty Show
The Accunet Mortgage & Realty Show 7-28-24
The following program. The Academic Mortgage and Realty Show is paid for in full by ENT mortgage, LLC and equal housing lender consumer access.org number 2 5 5 3 6 8. The advice and opinions expressed during the ENT Mortgage and Realty Show are solely that at the hosts and guests of ENT mortgage, LLC, and not WTMJ or Good Karma Brands.
Speaker 2:Welcome to the Accu Net Mortgage and Realty Show, getting you inside information on buying, selling, and financing your home with expert advice from Accu Net Mortgage and Realty. And now here's Brian and David Wickers.
Speaker 1:Welcome to the Accu Mortgage and Realty Show. I'm Brian Wicker, licensed real estate broker with ANet Realty Advisors and the majority owner of Anette Mortgage, where my individual ID number is 2 5 9 6 1 0. And I'm here again today along with my son David Wicker, who's our senior loan consultant, one of our senior loan consultants and our Chief Client Experience Officer. And David's individual NMS ID number is 3 2 8 8 4 7. Alright, if you have a question or comment, you can call or text us on the WTMJ talk and text line , which is 8 5 5 6 1 6 1 6 20. Well, David, I would be remiss if we didn't mention to our radio listening audience that today is the actual 25th anniversary of the birth of acuate mortgage LLC. Yes.
Speaker 3:Congratulations. Thank you. A quarter century.
Speaker 1:A quarter century. I have a picture that we showed last night at our , uh, celebration dinner Yeah. Of you , uh, age 10. Yeah. Yeah. Who knew?
Speaker 3:Well, we were hoping
Speaker 1:Yeah. That a , a quarter century later you'd be here. A lot of water over the dam. Oh, yeah. Um, I learned that the Plural for Crisis is properly pronounced crises . Yeah . And , uh, not crisises . And we have seen a lot of 'em in the financial, financial crisis . Well , many kinds of crisis . Sure . But yeah, it's really kind of interesting to see how things have waggled over the years. And one of the slides that I put up there was showing how right after we started in 1999 , uh, rates went from, I think they were about six and a half , and then they went up to , um, 8.75. That, that was the peak. I
Speaker 3:I remember a story being told that at that time you could either get a 30 year, a 15 year, or a seven year arm at eight ,
Speaker 1:At 8.75. I wish I could have found We used , that's when we used to advertise in the journal , uh, Sentinel. Sure . And I can envisioned it in my, in my mind. And it was a three year arm, by the way, back when three year arms were available anyway. Yeah. So , uh, then you see this big, you know, long protracted dipping rates , some up and down jagged Sure . Kinda looks like a , a mountain range. And then the high point again, 25 years later, 24 and a half years later, in October of 2023 was 8.1 on the third year fixed rate . No
Speaker 3:Problem. No
Speaker 1:Problem. Okay . And so now thankfully rates are on the way back down. Let's talk about that a little bit. Yeah. And the reason that rates are headed in the right direction is we're getting some favorable inflation reports. Uh, what report did we get on Friday?
Speaker 3:We got the PCE report, the Personal Consumption Expenditure, which is the Federal Reserve's Preferred Gauge . The reason why I think it's preferred you got CPI Consumer Price Index that measures everything. Loaf of bread, bottle of beer, new car. Even if you didn't buy any of that. That's right . They're measuring everything versus the PCE is, oh, you needed to go buy a new car. What did it cost you when you did it
Speaker 1:And you decided to buy a Chevy, not a Cadillac. Exactly. You know, and or you decided to buy a hamburger and not steak. That's all baked into the PCE number. And the Fed is looking for that to get down to 2.0% for the core PCE number. Where did we , uh, find out? It ended in two .
Speaker 3:So you'll be humored because we love headlines. And then cracking the headlines open like an ostrich egg. The hoped for number was 0.1 . The headline was 0.2 month over month. Oh . But dad, that's a rounded number. Oh, and what's fun about that when you nerd out on the data 0.2 is inclusive of 0.15 all the way up to 0.249 . Oh, okay. That wide range. Right . Because then they deliver it in the 10th. Okay. This report was 0.18 . Oh . Which that sounds so much better. Better it does than 0.2 or 0.23 , which gets rounded. Oh, yeah. Which is why markets on Friday were like, Hey, that's not so bad. Point one eight , I think it was even smaller. I think it was like 0.17 something
Speaker 1:And the year over year number was for the core, I think it was 2.6. Yes . Which was right at expectations. Right . So we are , uh, the closer PC closer, the PCE peaked out at 7%, whereas the consumer price index peaked out at 9% in the summer of 2022. Yeah . So we are well on our way down to 2%. The Fed is meeting this coming week. Yeah. But nobody expects 'em to do anything with their short term overnight interest rate. But they're , everybody's really certain that they're gonna cut a quarter percent , uh, in September. But as we often say, that knowledge is already baked into today's rates. So we ended the week low overhead ACU net on a $300,000 30 year fixed rate with 25% equity and all the other Right. Stuff. We could have delivered a 6.99 30 year fixed rate with no points. And actually we could afford to chip in , um, $475 towards a person's loan cost , which would pay for their appraisal if one was needed. So that's pretty good. Yeah . And then the , um, first Wisconsin special first time home buyer money , uh, that's at six and a quarter. Uh , the a PR and that can vary widely because of the private mortgage insurance. It might be as low as 6.26 if you didn't need any PMI on that program. Right . You're putting 20% down or more, or, you know, it could be as high as six and a quarter if your credit's not so good. And the , and the mortgage insurance is expensive. Alright . When we come back , uh, let's do a little update on supply and demand. 'cause we've got some additional information on statewide Wisconsin Home sales and also the National Association of Realtors came out with their numbers. We'll get to that right after this. You are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ
Speaker 2:Home buying advice from the guys who know it best. This is the Acuate Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Thanks again for tuning in today. Welcome back to this 25th anniversary edition of the Acuate Mortgage and Realty Show. Not of the show, but rather of the company. David, I saw a picture of myself , uh, in the slideshow that we did last night and , uh, for , to celebrate our 25th anniversary. And I used to have dark hair and didn't have this kind of ozone hole in the back. Yeah. It's kind of amazing what happens over a quarter century. Anyway , um, this last week , uh, the National Association of Realtors came out with their , uh, recap of June home sales and so did the Wisconsin Realtors Association. And we had already come out with our five county metro area numbers from , uh, on last week's show. But let's just reemphasize, this is a great little exercise. And real estate is local. So the National Association of Realtors came out and said, Hey, you know what, the number of closed sales in June was down 5.4% compared to a year ago in June. And this was interesting. I didn't have time to check this on our local numbers. That's the slowest pace of home sales since June of 2010, which what was happening in June of 2010 , uh,
Speaker 3:We were unwinding all the knock on effects of the financial crisis.
Speaker 1:That's right. The housing crisis was in flu full bloom. Um, so that, that was kind of interesting fact that they put out there, their press release statewide, Wisconsin home sales were down 10.5%. This is counting the number of close sales. Yes . Hey ,
Speaker 3:I , I know I just, okay. Our listeners can't hear me. Shrug can't see me shrug nor here .
Speaker 1:Right . And in the five county area, we'd already reported they were down 10.9, so let's call it 11%. Now, this is what I find interesting as well, months of supply. So what's our listing situation looking like? Yeah. Because it is vastly different in different areas of the country. So if you look at the NA nationwide number Oh. And then we can do the months of supply. Do you want to quickly explain months of supply?
Speaker 3:Uh, zero to three months is a seller's market. Four to six months of supply is balanced ish. And if you have more than six months of supply of homes, it's a buyer's
Speaker 1:Market. That's right. And what we're they have their pick we're doing there is taking the number of active
Speaker 3:Listings. How fast can you chew through? Right . All the homes that are available with for sale signs
Speaker 1:Divided by the most recent number of monthly sales. Okay. So nationwide, this is where we are disconnected with the nationwide numbers. Listings reported by the National Association of Realtor were up a whopping 23% compared to a year earlier, giving the nationwide market a 4.1 month supply. So just sneaking into that balanced market , uh, category. Yeah . Um, statewide for the entire state of Wisconsin, new listing dropped 10.5% in the month of June versus the prior June. Now I , that doesn't, that's not the same number as total number of homes on the market. I couldn't get my arms on that.
Speaker 3:Well , that's because the total number of listings is cumulative Correct . Of all the months that have come before Yeah . That have not gotten to the closing table yet .
Speaker 1:Correct. So I don't unfortunately have that number. But if you, according to the WRA, if you take the current inventory and divide it by June's number of sales, we're at a three and a half month supply. Okay. So kind of right at the cusp of balanced . But then this is cool. WRA breaks it out between these three categories. Rural, which is a 4.7 month supply, so decidedly into the balanced definition. Mm-Hmm. <affirmative> micropolitan areas have a 3.6 month supply. And if you're wondering what's
Speaker 3:Rural Dallas,
Speaker 1:What is a micropolitan area? Yeah. That would be like Wisconsin Rapids. Whereas Wasaw is a metropolitan area. <laugh>, welcome to the Nerd Out Show of , uh, real estate and Mortgage
Speaker 3:Metropolitan.
Speaker 1:And the metro area is, metro areas throughout the state are at a 3.2 month supply. Uh, so again, kind getting a little higher that ,
Speaker 3:That's, well, but it's why last week and or, and many months and years before we talk about by the municipal level For sure. You know, when you're talking about, Hey, what's St . Francis versus Brookfield versus West Bend?
Speaker 1:And all that really matters is those areas where you're willing to buy a home in the price range that you're looking to buy. Mm-Hmm. <affirmative> . You know, and that's something that you're gonna find out when you're shopping. Yeah. Right. What is in my windshield of things that I'm willing to consider. Yeah . Because then if you drill down to the five county Milwaukee area, we only have a two month supply. So that's quite a variety.
Speaker 3:And I would tell you, if you're looking in, you know, greenfield below 300,000, you have a six day supply. Yeah.
Speaker 1:Right. It's, it's really t it's really tight. So all real estate is , uh, local, by the way, median sales price records all over the place. Uh, the national and median sales price set a record of 427,000 in June, statewide, 3 27 5. That's up 7.5% from a year earlier. And in the five county area 360, that's for single family detached and condos combined in all cases. Uh , yet
Speaker 3:My hammer is should rates continue to abate.
Speaker 1:Yes.
Speaker 3:It will not be a one for one buyers coming back sellers dislodging from their, from their current setup . It's going to, it should rates come down further. It's gonna bring two to one, three to one, four to one buyers back into the market versus a seller who's like, so is you willing to Oh, now I'm willing. Yeah .
Speaker 1:Yeah. Alright , well let's talk about that. I do have , um, Fannie Mae's latest housing forecasts and interest rate forecasts in my hip pocket. But let's put that in the second half of the show and let's come back. Tell one of your real life stories about somebody who is buying a home. Uh , right now you are listening to the Anette Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ,
Speaker 3:Getting you into
Speaker 2:The home of your dreams. Here's more of the ACU Mortgage and Realty Show with Brian . We on WTMJ
Speaker 1:Welcome back and thanks again for tuning in today. I'm Brian Wicker, the elder. That's David Wicker, the younger, taller, more handsome of the wicker men. And , uh, David, we're just recapping the supply and demand dynamics , uh, in the great state of Wisconsin and then more locally in southeastern Wisconsin, where in a lot of the markets where our buyers are shopping, it's still a seller's market. Yeah . And so, you know, one of the things that sellers have never liked , uh, is , uh, an offer that's contingent upon the sale of the buyer's home. Mm-Hmm. <affirmative> . Right . Because that's a wild card that they can't control. And so you were telling me , uh, before we started today that you've got a buyer who can actually buy , uh, without selling their home , um, with like 5% down. Mm-Hmm. <affirmative> . Um, but they wrote their offer reflecting that the sale of their home is actually gonna occur . And so they can put half down. Tell us more about
Speaker 3:That. Well, and so ultimately this is a , I'm gonna call it a mismatch between timing, contract commitment contingencies and all of that in this bucket of risk management. Yeah. Right. And one of the ways that I framed this to the client, they can, just to emphasize the point, they can buy the new home uncorrelated to what happens with the sale of their Eau Claire house.
Speaker 1:Oh , okay. Yeah.
Speaker 3:They're moving from Eau Claire down to like New Berlin or
Speaker 1:Something. Okay . Gotcha .
Speaker 3:New job using, you know, new , uh, future income. Okay . Again , amazing when we can do that.
Speaker 1:Yeah. We can get that done.
Speaker 3:And the timing, they have the accepted offer on their Eau Claire house. They already
Speaker 1:Have it in their pocket. They do . Before they wrote the offer on the new house. Correct. Wow. Nice. And
Speaker 3:The way that I , to , to, to forecast it out, they're gonna sell that house at 10:00 AM Mm-Hmm. <affirmative> on the closing date in a couple weeks. And then they'd like to go buy their new house down here in southeastern Wisconsin at 1:00 PM
Speaker 1:Gotcha .
Speaker 3:In their mind. And, and everything's gonna go great. Dad, nothing could possibly go wrong is going to , it's all gonna go fine. They're gonna drive to the closing sign, all this stuff. The money's gonna get wired. There's not gonna be any
Speaker 1:Problem with the inspection. The appraisal's gonna be fine. The financing contingency is gonna go great.
Speaker 3:And I, you know, I, what's a nicer way of saying paranoid? I think we've just seen it not work out
Speaker 1:Yeah. Uh ,
Speaker 3:Perfectly in the sequence that the, our client is expecting. And so I presented that what we can do is I want to get you approved for the loan,
Speaker 1:Assuming your house never sells. Exactly.
Speaker 3:Well , and I, I try to say this in real life examples 'cause we're we're talking about their buyer. Yeah. On their Eau Claire house. Hey, not, not if do they get struck by lightning, but like what if they lose their job Yeah . Between now and closing, what if they get hurt?
Speaker 1:Right . And , and
Speaker 3:Now they're on
Speaker 1:Not working disability income, you know , and they don't qualify anymore for their mortgage 'cause their income is reduced. Right.
Speaker 3:Kinda like the real life stuff, let alone Oh, something from the inspection Mm . Appraisal on the house you're trying to sell doesn't Yeah . It doesn't come together. The , the real life elements of why a buyer might not, not just because they get, you know, clipped by a bus Right . The day before closing. And so the prudent path is , I'm gonna get you ready, I'm gonna be ready to lend you all the money you might need. And then you sell your house at 10:00 AM You call me at 10:30 AM to confirm. Yep . Oh, yep . We have the money. It is sold. Then the acuate team can just lower the loan amount. Yeah. And I ,
Speaker 1:Yeah , I would even
Speaker 3:Possibly after confirming, right?
Speaker 1:Yeah. Well , well , or yeah , I'm with you. Can we take it ? Can we, can I help you take another, because what did these people decide?
Speaker 3:Uh, they, they heated my advice to do the prudent plan, the 10% or the smaller down payment without counting on everything going perfectly. Oh ,
Speaker 1:Good, good.
Speaker 3:Um, and
Speaker 1:We could talk about, you know, we don't necessarily have to at 10 o'clock send a new closing package. We could still send the closing package for the big down payment
Speaker 3:With the expectation. Yeah . That
Speaker 1:All will go well . But at least we'll be
Speaker 3:But from it's a regulatory piece too. Yeah. Right. Because Oh yeah . If they, if we weren't doing risk management and we made the game plan, oh , yep . You're gonna put half down. Oh. And then you call me at nine forty five in this example and the , and my buyer, they're not closing. Yeah.
Speaker 1:I need to do the 5%
Speaker 3:Job . Uncle . I need to do the , can you lend me more money? Uncle Sam says, oh, aina , did you just raise the loan amount from half down up to a , a bigger loan
Speaker 1:Amount ? It's not , it's the , uh, annual percentage rate that too that would go up because of the private mortgage insurance required. Right. That's what would be the killer in my opinion, is that the A PR would exceed almost certainly the one quarter of 1% maximum. Right. Then you have to go on a three day timeout. Right . To allow the borrower to reconsider, Ooh ,
Speaker 3:This, this is the level of care. I I have another level of care story that I want to Okay . Just talk about briefly about after our, after our break here for the news. But it's being mindful, a a , an unthinking , um, lender who has a skyscraper downtown w wouldn't, I think be forecasting. Let's make sure that you get to the closing table on the new home.
Speaker 1:Yeah.
Speaker 3:And, and hope for the best, but plan for bucks .
Speaker 1:Yeah. Yeah . Yeah. That's , I like that. Alright, so , uh, when we come back, we'll talk about your other , uh, standard of care story and then also come back to the Fannie Mae, Freddie Mac , uh, or no, just Fannie Mae. Predictions for interest rates and housing. But right now it's time to turn it over to the WTMJ Breaking News Center.
Speaker 2:Don't break the bank to get into a house. Back to the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 3:Welcome back to the ACU net Mortgage and Realty show. 25th anniversary edition. What's 25? Silver.
Speaker 1:Silver. That's silver. Yeah. Like my hair.
Speaker 3:I have a little two in case you're a little , little sprinkle or something. I don't , a little wisdom in there .
Speaker 1:I think you're , you're putting that in there. Yeah.
Speaker 3:Clooney style. That's me. That's right. Uh, so I , uh, our previous segment, dad , you know, detailing, I, I think the approach that we've taken for 25 years is what is the advice we would give to a family member and making that a , the advice we give to a client, because as much as I , I I , I am reminded people want the house. That's
Speaker 1:Right. The mortgage. They don't want a
Speaker 3:Mortgage. Mortgage . The mortgage is just a thing.
Speaker 1:Yeah. They would prefer not to have a mortgage.
Speaker 3:And , and most people, and, and the highlighting that the client wants the house, the story we just told, it's like, do you know what is probably most important to those people moving from Eau Claire to New Berlin? They wanna move into the house. Yeah .
Speaker 1:The moving truck being there to pick up their stuff and get it delivered and, you know, get the bedside up .
Speaker 3:Exactly. That, that's the most important thing. And, and providing the level of care that the tool that we are providing the mortgage tool helps them achieve the real life stuff of, I mean, they're gonna have to like be putting their kids in school Yeah . Too. Like , it's not just the moving truck. There's kids as well. Well ,
Speaker 1:But that'll be later. It's summertime. Come on. They don't have to put 'em in school yet. Well, who knows . Is this gonna happen around the corner , man , at the end of August? Okay,
Speaker 3:So, so I had another client, this , uh, uh, who is buying a home, their new home on Wednesday. Okay. This was a referral from their real estate agent. And funny enough, because Milwaukee's a small town, this buyer works with a financial advisor that we ANet have worked with before. Wow. Many a time in our 25 years . And on Friday , uh, because I, in a previous life worked in the financial advising world, this client is bringing their down payment from a brokerage account. Ah , an investment account.
Speaker 1:Ah , yes .
Speaker 3:So I'm sitting there at my desk on Thursday and then on Friday I make a phone call to the financial advisor. Do you wanna guess what my line of thought was about? Can
Speaker 1:They wire the money out of the brokerage account directly to the title company?
Speaker 3:Yes. Yeah . And, and hey, do you need to sell any stocks Yeah . In that investment account to create the cash that you can remit to the title company? Because Well , yeah. Yeah. Wait, what? And , and this, this is all about that level of care. It , I would imagine many a mortgage lender not acuate , would be like, see you at the closing table on Wednesday. Yeah . Hope you figure it out to get there. Right . But it's not just about being at the closing table on Wednesday. We are, we are mindful of, and how will we get there? 'cause if the client, the person
Speaker 1:And the money, just by the way, I mean
Speaker 3:Not , I haven't picked up a client yet to
Speaker 1:Get the referral . Okay . Did you drive
Speaker 3:Him to the closing ? I mean, I , I guess I,
Speaker 1:It's not outside . We've gone to hospital room . We have gone to hospital rooms to have people sign. You know, you know , you have to assess are they gonna make it or not? But that's, they do. Wow .
Speaker 3:Anyway, enough to sign their names . So
Speaker 1:Did this, did , did they have to liquid it's stocks ?
Speaker 3:No, but I think but it's mu it's , it's informative for our listening audience that when you sell a stock, it's uh , generally called t plus two trade plus two days of settlement. Oh ,
Speaker 1:Okay. Before that money's available.
Speaker 3:Well, yes. Your custodian has to like, it's not just you sell it and you can like liquidate and forward
Speaker 1:It and wire that money that day.
Speaker 3:You're right. The next hour. Right. There are some, depending on the securities that you hold, maybe it's T plus one. I don't think there's t they've talked about t plus zero. Oh. I don't think that's, that's
Speaker 1:Not happen . The
Speaker 3:Future is not now yet on that. Okay. But I, I imagine how this could go wrong, right. That our client on Tuesday calls their financial advisor like, yeah, hey, can you wire the money over to the closing? No,
Speaker 1:No. Yeah. You gotta pay . You
Speaker 3:Don't have enough. You , you got all, it's all tied up in Apple stock. We gotta unwind that so that the cash is available to send over.
Speaker 1:It's the same thing with gift money sometimes. Yeah . You know , when, if a parent is, you know, our preference is to have the parents , uh, send the wire to the title company. Yeah. But every once in a while you get no, no, no, no. I want to give the gift to my, or you know, it's in pro , it's kind of already happening. Um, you know, when we get involved and , and so those gifts, you know, if you give somebody a check for 50 grand, it it's not available the next day in their account. No. And you got a plan on that.
Speaker 3:Well, my version of that and I had a client, I was like, 'cause every financial institution's got their different, you know, steps. Yeah . I have someone buying a house on Friday. Hey, I texted him. I was like, it would be worthwhile for you to check in with your financial institution. What are their steps ? Do you need to sign something, go into a branch, give a blood sample? Yeah . Like what is it that you need to do in order to provide permission for that money to get wired? And it can be at the same bank. Let's just pick on Chase. You wanna wire $10,000, maybe you can do that from your iPhone. You wanna wire a hundred thousand dollars, you gotta walk into a branch and they gotta get you a photo id. And I'm making that up. Yeah.
Speaker 1:And maybe though, if it's a joint account, maybe both people have to be there to authorize a wire . So , but
Speaker 3:This is the level of care where it's like, let's talk about, it's not just see you at the closing table. It's you
Speaker 1:Figure it out. Yeah. Yeah. And not, people don't wire very often, so that's why you know, it it , they may have never done it before.
Speaker 3:Well, and I think the onus is on us as the uh , mountain guide. Yeah. To be like, not just like there's the top good luck, but like, get there. Let me walk you up there as well.
Speaker 1:Alright, when we come back, let's talk a little bit about , uh, Fannie Mae's latest , uh, on where the real estate market and interest rates are going. You're listening to the Academic Mortgage and Realty Show on the biggest stick in the state AM six 20 WTMJ.
Speaker 2:Important home buying questions and answers you can count on. This is the Accu Net Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Thanks again for tuning into today's show, which is the actual birthday of academic mortgage LLC 25 years ago.
Speaker 3:Academic mortgage.com. LLC .
Speaker 1:Well that's right . You are correct. It was all together at that time. That's when being a.com was cool in 1999. Yeah, man.
Speaker 3:Competing against elo. elo, right?
Speaker 1:Yeah. Whatever happened . A lot of , a lot of lenders aren't here. Countrywide. Washington Mutual.
Speaker 3:If you want an interesting , uh, sequence of history, just look at the top 10 lenders every 10 years. Ah , the names come and go there.
Speaker 1:You gore still here , but here we remain . Here we are . Alright , so , um, one of those names that's still here, barely <laugh> is , uh, Fannie
Speaker 3:Mae having put , having been put on life support. Yeah.
Speaker 1:Uh , which is a place I worked for the longest year of my life , uh, in 1984.
Speaker 3:Do they have a Milwaukee office at the time?
Speaker 1:No, no. I was working out of my basement. The same basement office in which I started academic mortgage. They had an office in Chicago. So I'd go down there every once in a while . But I was a sales rep, you know, calling on , uh, Wisconsin area banks. And , uh, it was a great job, actually enjoyed it. But they've had a team of economists there at Fannie Mae that have the temerity to predict the future every month. And they've actually won some awards for how least wrong they are <laugh>. And so they just came out , uh, last week with their most recent forecast. And uh , and here it's, they are calling for , uh, this year's total number, 2024 total number of existing home sales. So they're counting , uh, single family detached condos. And this thing that they have in New York called co-Ops, there's gonna be about a 1.9% increase in the number of existing homes that change hands in 2024. So about a 4.168 million nationwide. Mm-Hmm . <affirmative> . Uh , so that's compared to 2023. And uh, and then they're calling for 2025 to be 9% better . Okay. So units , yeah. Number of units. So they're saying, Hey, we're gonna go from, you know, let's call it 4.17 up to 4.5. So I would call that a modest, you know, increase in that. Well , it's almost double digits. Yeah . 9% isn't nothing. No. And and that's because they are at the same time predicting , uh, the 30 year fixed rate mortgage to, I'm gonna call it inch downward. Um , averaging about 6.8 here in the third quarter of this year. And remember I said we could do 6.99 with an A PR of 7.02 , uh, as of the close of business Friday , um, with all the right stuff. And uh, that was with no points. And who knows this , the numbers that they use have points in 'em . They just don't tell you how many. Um , and then they have an inching down to 6.7 by the fourth quarter and then gently down respectively in each quarter of 20 25, 6 0.5, 6.4, 6.3 and then ending 2025 at 6.2. So, you know, that's why they're saying, hey, affordability will get better. Uh , so there should be some more existing home sales. By the way, they predict only 639,000 new single family home sales this year. That is pathetic. It used to be, when we started the company, you could count on a million new construction home sales every month. And ever since the housing crisis year. Yeah. Per month. Yeah. Thank you. Per year. And ever since the housing crisis drove that down to under 400,000, we have never gotten back up to anywhere near the pace No . Of new construction to solve our housing shortage. So, you know, bottom line is they're predicting a modest increase in existing home sales. Um, and upward pressure. They're predicting home prices will rise. Our value's 3%. Right . You take on all that . Well,
Speaker 3:The counter is , uh, some relief in rates leading to affordability. My counterargument will be buyers take that as an opportunity to continue to bid strongly in order to win. Right. So even if rates abate, if afford the cost goes, if the same widget costs more, you flat.
Speaker 1:Well, and of course this all depends on where you are shopping. You showed me a heat map , uh, that Forbes put together that clearly shows Southwest Florida.
Speaker 3:Yeah. You want a deal. Yeah. People in southwest Florida would love to talk to you many
Speaker 1:Days on market. 'cause somehow for whatever reason, the the demand and supply are in the favor of the buyer. Yeah . Down there. The days on market is really stretching out probably. 'cause people are still wanting to fetch last year's prices and that's not what buyers are willing to pay anymore. No. So , um,
Speaker 3:I have, I have Fannie Mae's , uh, forecast from January of this year. Do you want me to tell you what they thought rates were gonna be right now? They thought rates were gonna be at six even
Speaker 1:And now they're saying 6.8. They're old . They're just early. They're just a year and a half early. Yeah. Right. Okay. So that's a good point. It's just their best guess at the time. Well , I know.
Speaker 3:I just don't think, I don't want our clients. I I share with buyers that getting in the home now is chapter one in this book Akon . It's been around for 25 years. Do you have any idea how many clients we have helped Multiple times? Yeah. We have clients that we've helped manys a dozen times Yeah . In 25 years because they bought the house. Refinance, refinance, refinance, refinance, bought a new home. Refinance, refinance, refinance. Yeah . It is chapters in a book and our council has always been by the house for the reasons that are real life. And then when the opportunity presents itself and when Fannie Mae's economists are correct, we'll call you be like, Hey, you want that lower rate?
Speaker 1:It's available now. Yeah. Alright. When we come back , uh, speaking of that, I've got a repeat customer coming back for refi of a condo , uh, up in , uh, do county. We'll talk about that. You are listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ.
Speaker 2:Find a place to call home without the headache. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.
Speaker 1:Welcome back and thanks again for joining us on this , uh, 25th anniversary edition of Academic Mortgage. The company and , uh, David last week had mentioned that I had gotten a call from a past customer looking to refinance his , um, mortgage on a condo in Door County. And this is a condo project that we've loaned in before. He had bought his unit , uh, seven years ago with a seven year arm. And now he got the letter in the mail that said, Hey, your rate's gonna increase to 7.75 and then it can in , it can jiggle around yearly after that. Yeah . And so I'd made him some , uh, showed him some proposals ranging from 6.99, you know, all the way up to 7.625. And that seven and a half seemed to be a nice , uh, uh, number in the middle, which would actually result in his payment going down because we're retching his loan back out to 30 years. Sure. And this isn't about the interest rate or the interest cost to him. This is just about I don't want my payment to go up. You know, I've, I got my lifestyle and I would like to lock in payment , uh, certainty. Yes. Uh, for this investment. And by the way, we may only have this place for another four years. Fine . So it didn't make sense for him to pay up to get a lower rate. No. And since this is a second home, it doesn't get priced as well. No . As a primary residence.
Speaker 3:But again, he kind of was like, Hmm , doesn't matter. I'm , that's not all for cash flow stability .
Speaker 1:So when I, so he , he , uh, call or no, he emailed him , emailed me or texted me and said Go ahead and, and get my credit report so you can run your automated underwriting. 'cause I said we might get, he's got like way over 50% equity. I said we might get an appraisal waiver. Mm-Hmm. <affirmative> , sure enough. I put it through Fannie Mae's automated underwriting system. Bam. I get the appraisal waiver. I'm like, this is awesome. That saves him 475 bucks. We can get this done all in for about $950. This is gonna be great. Yeah . Then I start poking around and I find out that , um, this development has gone so well. The builder's now doing another phase <laugh> , which, which puts it into the Oh. 'cause I thought it was gonna be a , um, established project. Yeah. So now it's not
Speaker 3:New again.
Speaker 1:Right. And then I'm thinking because the last unit we, we didn't do the original purchase loan for him. You got a question.
Speaker 3:Can I just say the reason why it's an issue is it's great that your condo subject property is okay, but if the builder starts building new ones, then starts losing their shirt and giving those new units away
Speaker 1:For at discount
Speaker 3:Prices. At discount prices, it can hurt your condo. Right .
Speaker 1:Value. So even though Fannie Mae and Freddie Mac are both still wards of the state , um, Freddie Mac has a cool difference where if you're looking at a two unit building within a larger complex, only those two units have to be complete in order to finance one of the two units. Yeah. Whereas with Fannie Mae, more of the units have to be complete. So I run it through Freddie Mac, no appraisal waiver.
Speaker 3:You're not, but you're not even particularly worried about value. It would just be nice to save the money.
Speaker 1:That's right. So long story short, then I reconnect with the client. Turns out it's the rare single family condo.
Speaker 3:Wow. Yeah. Rare bird.
Speaker 1:So it's not a side by side . It's a single standalone condo, in which case I don't need no stinking condo review at all.
Speaker 3:It's treated like a single family
Speaker 1:Home . That's right. So now I can go back to Fannie Mae. So there you go. Details matter. Details matter. And you know, we've got more than one, one solution. We're always trying to find the least expensive, most expedient way to do things for people. Of course . Alright , that's all the time we have for today's , uh, show. David, thanks again for , uh, being on the show. Oh yeah. For the umpteenth time here. <laugh> starting the next 25 years. Next week tomorrow, you've been listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ. The proceeding was a paid program. Advice and opinions expressed during the Accu Net Mortgage and Realty Show are solely that of the host or guests of academic mortgage and academic Realty advisors and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.