The Double Comma Club

So you finally got in, but the rate is five, five and a half, six, seven. The down payment assistance is seven, seven and a half. And all of a sudden, it doesn't seem fair, but it's still locked in, right? It's still your mortgage payment that you can count on that isn't going to go up any further. And if anything go down because interest rates will go down. But when, so housing, it's a lock against inflation.

• It's a fixed mortgage payment.

I can rent out a room because there are a lot of people who can't afford to buy. Could I give them access? I just had to purchase a home. I used a 7% interest rate. My payment's a little bit tighter than I would've liked. I'm going to rent out rooms, or I'm going to lock off the basement that might have stairs, and I can create a little kitchenette and create a little lounge area.

• Can I get creative?

Some people are, whether they're doing a hobby, whether they're laying low, they're not going traveling, they just need extra space to do their craft, whatever that is. Or storage, maybe they had to downsize. I've got friends that rent out their garages, right? Can we get creative to offset?

You can do that with a home. You can do that with something you own. Not only can you make it your own, but you can also build it out; you can finish it out. You can create a space where you can then create income. The home has a multitude of positives. It has two negatives right now. The interest rates today and home price is going up. Let's talk about those two interest rates today. Where do I think interest rates are going to go?

I think we are going to have a volatile last quarter and could be a volatile first quarter of 2023. Many of the economists in the large banks are all thinking that we have not entered into a recession yet. That we might be in one today, but we will start to see a recession where people aren't traveling, aren't going out to eat, aren't paying for services, aren't still spending, and our consumer spending is still up. So if people stop spending, we will head into a recession. If you go back historically, during recessionary periods, interest rates go down, and in fact, homes appreciate minus one back in 1960 when they didn't. I'm not talking about inflation adjusted, I'm talking about HPI home price indexes appreciate in recessionary periods because those interest rates come down.

Where do I think interest rates are going to go? Listen to this episode of The Double Comma Club, "Using Current Market Volatility To Your Advantage" to find out.

After July's momentary celebration of 5% interest rates, August ended the month at six, then September just finished having crossed 7%. Only a few months ago, six and a quarter seemed like the absolute ceiling as the US continued its strong stance against the slowing global economy, but that didn't last. We saw European economies bear the brunt of Russia's war on Ukraine. Japan struggling with lower global demand for its manufactured goods and China's economic troubles thanks to its zero Covid policy. All of these strengthen the dollar while creating credible volatility for our mortgage bonds. The fight here in the United States is the fight against inflation. For the last few years, we've seen too many dollars chasing too few goods, pushing the price of those goods up as demand spiked.

The Federal Reserve's job now is to constrain the dollar spent. Think about this. 28% of all goods purchased are done with a credit card that doesn't even include car loans, home loans, or business loans. Buying on credit creates money, future money pulled forward, giving you access to a product or service today for payment in the future. For the Fed to control spending, they have to make the cost of borrowing higher, so it creates more pain. At the same time, the benefit of savings has also gone up as the Fed raised its Fed rate or overnight rate. So goes the one-year treasury. The safest of all investments is backed by the federal government. This rate is 4.01% today, which is significantly higher than the long-term average of 2.85% and will increase further after November 2nd. 

Listen to the rest of this summary.

The Denver Real Estate Market is still up in price growth. In September, we saw a year-to-date price growth of 12.8%. I get this isn't the 21% increase Y.O.Y we saw in March, but IT IS STILL UP. We have to recognize that a real estate market slowdown does not mean a loss in value, it just means a shift in perspective. In this episode we take a look at the Denver Real Estate Market price growth and what it means for buyers and sellers.

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Nicole Rueth

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CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3131 Camino Del Rio North Suite 1680, San Diego, CA 92108. Corporate phone (888) 488-3807.

For more licensing information, visit https://onetrusthomeloans.com/licensing-information/. This information is to inform the real estate industry only and is not to be provided to consumers. All products are not available in all states. All options are not available on all programs. All programs are subject to borrower and property qualifications. Rates, terms, and conditions are subject to change without notice.

Just because you want a different house doesn't mean you have to wait for the perfect deal in the perfect area to become available. You can, instead, create the home of your dreams, even if it's your first home, a starter home that you will sell later. You can build a home instead of waiting.

With home prices climbing and very limited inventory on the market, it may be more difficult to find your perfect home. So, why not just build it? The Rueth Team has new Land and Construction Loans so you can skip the house hunting and build your dream home. Land and construction loans are not only a great option for Primary homes, but for Second Home and Investment Properties as well. There are several loan product options that grant you stability in your rate, while giving you the opportunity to create a home for your family you know you'll enjoy for years to come.

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Nicole Rueth

Connect on social media:

CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3131 Camino Del Rio North Suite 1680, San Diego, CA 92108. Corporate phone (888) 488-3807.

For more licensing information visit https://onetrusthomeloans.com/licensing-information/. This information is to inform the real estate industry only and is not to be provided to consumers. All products are not available in all states. All options are not available on all programs. All programs are subject to borrower and property qualifications. Rates, terms, and conditions are subject to change without notice.

So while we were sleeping, we were seeing the European bonds were selling off, which we opened up Monday morning to this bond selloff here in the United States, dropping the bond prices and raising our interest rates.

Powell was just in Switzerland trying to speak to the Switzerland bank and convince them that he's got everything under control. I'm gonna debate that right now. I think they were a little late to the party.

It's starting to become habitual that he's not really forecasting what's happening because he's looking at metrics that are passed. He's primarily looking at unemployment, which isn't a leading indicator. It's a lagging indicator. He's looking at inflation, which is also looking backward.

If you also look at the CPI numbers, the inflation numbers that we're comparing year-over-year inflation to, we're going to start seeing inflation slow down again second quarter next year. And that's because of comparison inflation rates right now we're very low last year, so we're replacing them with high numbers. We're replacing really low numbers and that's keeping inflation high. As those numbers increased last year, that comparison rate is now becoming more in line. We'll start to see that happening in October.

So if rates are at seven or above seven depending on, we are seeing a little bit of the bond market revert back from its extreme yesterday. It's like, oh wait a minute, that was the European market that set our markets on fire. It wasn't even anything in the United States. It was a sell-off of bonds in Europe that caused our bond market sell-off the next morning Monday morning. So Powell goes through all of these conversations to say during the last Fed meeting, "I'm going to define what I want to see in a housing correction." A housing correction includes two things from his perspective, those two things are increased housing supply and decreased housing demand. Come on, that was a given.

Listen to this complete episode, "How Does the Global Market Movement Influence the US Real Estate Market."

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Nicole Rueth The Rueth Team Powered by OneTrust Home Loans 750 W Hampden Avenue, Suite 500 Englewood, CO 80110 303-214-6393 www.TheRuethTeam.com

Connect on social media:

Follow me on FB:  https://www.facebook.com/theruethteam/

Twitter: https://twitter.com/nicolerueth

LinkedIn: https://www.linkedin.com/company/theruethteam/ 

YouTube Channel:  https://www.youtube.com/channel/UCPMdb94tUNMMsUTgdWRMDKw 

CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3131 Camino Del Rio North Suite 1680, San Diego, CA 92108. Corporate phone (888) 488-3807. For more licensing information visit https://onetrusthomeloans.com/licensing-information. This information is to inform the real estate industry only and is not to be provided to consumers. All products are not available in all states. All options are not available on all programs. All programs are subject to borrower and property qualifications. Rates, terms, and conditions are subject to change without notice.

Are we in a recession?

It seems like the more we continue talking about a recession, the scarier it gets for consumers! Unfortunately, we still aren't there yet. We know that it's coming as the FED continues to take big action to control inflation and stop consumer spending. BUT HOW MUCH LONGER?

BONUS #SHORTS

What's My Interest Rate?

The question Nicole is asked more than just about any other. The answer usually starts out the same, "It depends..."

Nicole Rueth

Connect on social media: 

CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3131 Camino Del Rio North Suite 1680, San Diego, CA 92108. Corporate phone (888) 488-3807. For more licensing information visit 

What is happening with interest rates? Realtors' businesses are picking up steam, even though we know rates are ticking up. The 10-yr Treasury just hit a high since 2011 (3.51%), and Sweden just raised their bank rate by 100BPS last night! As the FED gears up to meet again and controlling inflation remains top of mind, they've got a .75-1% FED rate increase on the table. We know the recession is coming, and the FED is trying to fast-track it so that consumers will finally stop spending!

But if realtors are seeing a pick-up and are anticipating a solid October, WHY? 

1. Employers calling employees back to work

The text number is 855-930-0377. Text UPDATE to be added to the list 

Some of what you'll learn in this 18-minute episode includes:

"If I purchase a median home last month in August, the median DMAR 11-county area home price was $579,900.

I buy a $579,900 home with 5% down, I'm putting down $28,995.

If I get a 6% interest rate and I get a 3.8% appreciation because that's what Core Logic is expecting that we're going to see for the next year forward, 3.8%, not the crazy double digits that we've seen.

Historically before the pandemic, the United States appreciated 3.6%. So we're returning back to normal.

So if I have a 3.8% appreciation in five years, I have a gain.

If that stays consistent with principal reduction every single year, knocking down my loan amount and a little bit an increase in value of 3.8% because I only put a limited number amount down and the power of leverage. I have the opportunity of that entire home value going up at the purchase price, not my down payment.

That's going to give me a net worth of $161,000.

I can't make that in the stock market in the next five years, unless your chooser is spot on because mine's broken. I can't make $161,000 in the next five years. And even if we see a dip and a slowdown, which again, because we have so limited supply, but even if the whole secret is don't sell, don't sell. Hold on through the dip and for the next five years. And that's where you're going to regain this opportunity.

In fact, year one with a 3.8% appreciation and the principal reduction based on a 6% interest rate, I actually make a 102% on my down payment.

I put down $28,995. I'm going to net out in equity gain $29,588.

That's just math, right? That's not a motion. That's just math."

Co-Signing can be an excellent option for increasing borrower qualifications and eligibility. But, it's also a big commitment that shouldn't be entered into without full knowledge of the responsibilities. Here's a breakdown of the responsibilities a co-signer carries and how a co-signer can later be removed from a loan.

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Nicole Rueth

The Rueth Team Powered by OneTrust Home Loans

Connect on social media:

Follow me on FB: https://www.facebook.com/theruethteam/

Twitter: https://twitter.com/nicolerueth

LinkedIn: https://www.linkedin.com/company/theruethteam

YouTube Channel: https://www.youtube.com/channel/UCPMdb94tUNMMsUTgdWRMDKw

CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375; 3131 Camino Del Rio North Suite 1680, San Diego, CA 92108. Corporate phone (888) 488-3807.

For more licensing information, visit https://onetrusthomeloans.com/licensing-information/. This information is to inform the real estate industry only and is not to be provided to consumers. All products are not available in all states. All options are not available on all programs. All programs are subject to borrower and property qualifications. Rates, terms, and conditions are subject to change without notice.

There's good news for homebuyers! I understand that affordability is being put to the test. We just saw a 44% increase in prices and a 3% increase in interest rates. We also just saw the new conforming loan limit increase to $715,000! This is HUGE! The current conforming loan limit is $647,200, meaning those homebuyers that might not qualify for a jumbo loan or need a quicker close now have the means to make it happen! Much more of the market now falls within this conforming loan limit.

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An excerpt from this episode:

So the good news for home buyers today is the ability that we do still have a decent amount of inventory today that will shrink as we head towards the end of the year. And we're going to see things change. As we see the economy go into a recession and as we see interest rates possibly stabilize and, or even go down later into 2023, as we do enter into a recession, we could see that demand pick up again, putting pressure on limited inventory and increasing home prices even further. But people keep talking about this bust. What is happening around real estate? Are we in a recession? Lawrence June said that we're in a housing recession because we've seen six months of existing home sales down; NAHB, the home builders association, is saying that we're in a housing recession because they're seeing their permits and starts down.

Completions are up as they're rolling off inventory. So bad news, bad news is this inventory because as much as people are talking about a housing bubble or bust or decrease in prices, yes, we are seeing home prices. 40% of them coming off their original asking before they sell, becoming more realistic on their opportunities to sell that home, right? Not for what their neighbors sold for two months ago, but for what the market is calling for today, while we're seeing home sellers, reducing prices, we are not seeing loss in value. We are seeing those values come back in line, back towards our historic numbers. Do you know that the historical average of appreciation nationwide is 3.6%? Our average price growth here in the DMAR Metro is 6%. We've been well above that for a long time. We just put out a post yesterday that talked about the fact that even if I have a 3.9%, which is what it ticked up to 3.6 to 3.9 after 20 twenty's appreciation even higher than that after 2021.

But even if we saw a 3.9% historical appreciation for the next five years, we're still talking about equity growth for homeowners over the next five years of close to $150,000 real estate is a long-term play. It is an equity opportunity that continues to be around. Knowing that short term, we've got a little opportunity to buyers to get in with a higher loan limit, to squeeze in with more inspection items possibly on that objection, right? Getting it at or below is good news for home buyers. Affordability is obviously the bad news for home buyers, but homeowners continue to have the best news. Unless you have a homeowner who's looking to sell and wants top dollar, the top dollar they could have gotten in April and don't wanna become more realistic about what the numbers look like today. That might be bad news for home sellers, but homeowners have nothing but equity gains.

Nicole Rueth

Connect on social media: 

CalCon Mutual Mortgage LLC, dba OneTrust Home Loans is an Equal Housing Lender NMLS #46375

Historically the best forecasters have been able to consistently recognize that we are in a recession. Once we are actually in one to preemptively determine its onset has riddled economists for decades. Yet, an AR is Lawrence soon called a recession in August when he said, "In terms of economic impact, we are surely in a housing recession."

A recession is defined by Oxford is a period of temporary economic decline during which trade and industrial activity are reduced. This is generally defined by a fall in GDP for two consecutive quarters. This definition has then been further clarified by the National Bureau of Economic Research to a significant decline in economic activity. 

• Active listings while almost double last year, they've started their seasonal downward slope towards December by dropping 5.7% month over month, new listings peak a few months early this year dropping another 18.5%.

The slowing has come primarily from the rapid rise of mortgage interest rates increasing the monthly cost to purchase August saw more than its share of volatility.

Think of a child you've been giving Tootsie Rolls to for over an hour to keep him quiet during your very important meeting. How justified is the pain that child ensues as he works his way off the sugar rush? Justified or not, inflation must be tamed, and it will cause pain, but that pain is relative. It's relative to the specific household and the specific industry.

ADP's August employment report also showed pay increases nationwide for those who stayed on their job by 7.6%, and up for 16.1%; for those who got new jobs, consumer sentiment even increased this month by 13% due to a 59% surge in the year ahead. Outlook for the economy? Consumers are feeling good about inflation, getting tamed jobs secured and a quick economic recovery. All of this comes back to defining a housing recession.

Lawrence said it best, "It is a difficult market for those selling homes and for home builders. But homeowners continue to accumulate housing wealth from rising home prices."

I will concede through the definition of a housing recession by slowing the sales cycle, but with builders, not building, homeowners locked into rates not likely to be seen again, and baby boomers aging in place, inventory will not right size for a very long time. If ever this lack of inventory will keep home prices increasing over 27 trillion in homeowner, equity will keep homeowners from having to sell at a loss wage increases will keep buyers able to purchase.

This is Nicole Ruth with The Rueth Team, now the proud and excited newest member of the OneTrust Home Loans, family. It's my pleasure to keep you updated.

Listen to the full 9-minute episode to get more detailed comparisons and statistics.