More Americans believe that now is a good time to purchase a home.

Consumer opinions about home buying bounced back in the first quarter of 2019, with 37 percent stating that they strongly believe now is a good time to buy, up from 34 percent in the last quarter of 2018, but down from 38 percent one year ago, according to a survey from the National Association of Realtors.

Only 35 percent of respondents said that now is not a good time to buy a home, compared to 37 percent in 2018's fourth quarter.

NAR's first quarter Housing Opportunities and Market Experience survey determined that a majority of those polled, 53 percent, said that the economy is improving--down from 59 percent at the end of last year. In 2019, optimism is the greatest among those who earn $100,000 or more and those who reside in rural areas. Fifty percent of Generation X said the economy is improving, while 42 percent of urban area residents reported the same.

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NAR's says several factors are helping to improve the attitudes of potential homebuyers. "First, inventory has been rising, so those buyers interested in making a purchase will not be limited in choices,” said Lawrence Yun, chief economist at NAR. “Additionally, more stable home price trends are leading to more foot traffic at various open house gatherings."

Quarter four of 2018 broke the trend for respondents who thought home prices had been steadily increasing over the last 12 months. The first quarter of 2019 followed that trend, as 61 percent of respondents said they think home prices in their communities have increased over the last 12 months; a drop from 63 percent in 2018's fourth quarter. Thirty-one percent said prices within their community had remained the same, unchanged from a year ago.

This quarter's survey asked respondents to look ahead regarding local housing prices in the near future. Forty-three percent said they expect prices in their communities to stay the same over the next six months, up 2 percent from last quarter. However, 47 percent believe prices will rise in the coming six months, while 10 percent believe prices will drop in the next six months.

Those who live in the Northeast and South, those who earn $50,000 to $100,000, or those who rent are most likely to believe prices will increase in their communities. The West is experiencing the most variation in expectations surrounding home prices.

"A high percentage of the Western population believes that prices increased in the past year, while possibly for the same reason, a higher segment from the West compared to other regions say prices could fall in the next 12 months," said Yun. "As to the broader economy, the perception is weaker and showing cracks in the Midwest."

Amid those polled who do not presently own a home, 27 percent believe it would be very difficult to qualify for a mortgage given their current financial situation; 28 percent said it would be somewhat difficult to qualify. Twenty-four percent of that group said they expect no difficulty at all in qualifying for a mortgage; up significantly from 21 percent last quarter and 19 percent this time last year.

Mortgage affordability in 2019's first quarter has been more favorable for would-be homebuyers than it has been in recent quarters. "The Federal Reserve's decision to refrain from any foreseeable rate hikes was beneficial to potential buyers," said Yun. "That move directly contributed to mortgage rates declining in quarter one, which provided a second-chance opportunity to those looking to buy who were priced out last quarter."

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By Brian Sacks

I had an interesting conversation yesterday with an originator who is stuck.

I'm not sure how he found me, but he did, and continued to call my office until I agreed to finally meet with him for a consultation.

[caption id="attachment_7900" align="alignleft" width="332"] Brian Sacks[/caption]

He worked locally for a large bank and had a specialty niche. Because of his expertise in this niche, all of the other originators in the company sent him deals since they didn’t like to do these loans. Most didn’t understand the program.

Well the bank stopped doing this program, and he was forced to go elsewhere. He went to work for a big independent mortgage company, but to his horror his deal flow has slowed down to a trickle because he is no longer getting these referrals from other loan originators.

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He scheduled a one-on-one session with me; he does want to succeed, and I respect that.

During our session, he explained that he has been calling realtors and visiting open houses and doing lots of the things he has been told to do. By the way, he’s been originating for almost 10 years, so he isn’t exactly a rookie, right?

Calling realtors or going to open houses uninvited is chasing business and doesn’t work long term at building profitable relationships.

You are seen as an annoying pest instead of being embraced as an invited guest.Your goal needs to be getting them to chase you, not the other way around. You can do this by teaching classes or having pre-approved buyers you can connect them with, or even by being the celebrity originator in your town.  I do all of these, and you can too.

He is a perfect case of someone having all of their eggs in just one basket which never ever ends well. Instead, diversify and develop multiple sources of business that come in at all times, have a plan and track where the business comes from.

The business I focus on comes from the follow areas.

• Realtors.
• Past client referrals.
• Professionals, such as accountants and attorneys.
• Direct to consumer via free public relations and direct mail.
• Other loan officers will help, if you have a specialty niche.

Let’s say the goal is 10 loans a month: You could focus on getting four deals from realtors, three from direct to consumers and public relations, two loans from professional referrals and one from other originators.

Each month you need to go back and see how your actual volume did compared to your goal. What worked? What didn’t? Now you know where to focus your energy and marketing efforts for the coming month. If you don’t have a goal, and you don’t track, you simply can’t succeed.

The most important aspect of this is the following: You can only achieve to the level of your own self-image. He’s frustrated and truly can’t even see the forest for the trees, so he is simply going out and begging.

Make sure your business is well diversified. That you have a plan, that you can track your progress, as well as multiple tactics, strategies and sources that can deliver a constant business flow. But always make sure that your self-image is in the right place and you use tactics that make you an invited guest --instead of an annoying pest.

About the Author: Brian Sacks is a branch manager and originator with Homebridge Financial in Baltimore Md. Also, he is the founder of TopOriginatorSecrets.com and the author of the best-selling success manual for originators “48 Proven Ways to Immediately Close More Loans"

 

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Mortgage applications increased 2.3 percent from one week earlier, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 8, 2019.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index decreased 0.2 percent from the previous week. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 2 percent higher than the same week one year ago.

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“Led by a 5.5 percent increase in FHA loan applications, purchase activity picked up last week and was almost 2 percent higher than a year ago,” said Joel Kan, associate vice president of economic and industry forecasting for the MBA. “Purchase applications have now increased year-over-year for four weeks, which signals healthy demand entering the busy spring buying season. However, the pick-up in the average loan size continues, with the average balance reaching another record high. With more inventory in their price range compared to first-time buyers, move-up and higher-end buyers continue to have strong success finding a home.”

The refinance share of mortgage activity decreased to 38.6 percent of applications from 40.0 percent the previous week. The adjustable-rate mortgage share of activity decreased to 7.2 percent of total applications.

The FHA share of applications increased to 10.4 percent from 10.3 percent the week prior. The Veterans Affair share of applications decreased to 10.2 percent from 10.4 percent the week prior. The Department of Agriculture share of applications remained unchanged from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.64 percent from 4.67 percent, with points increasing to 0.47 from 0.44 (including the origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) increased to 4.45 percent from 4.41 percent, with points increasing to 0.34 from 0.25 (including the origination fee) for 80 percent loan-to-value loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration decreased to 4.61 percent from 4.66 percent, with points decreasing to 0.47 from 0.48 (including the origination fee) for 80 percent loan-to-value loans loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.02 percent from 4.08 percent, with points decreasing to 0.44 from 0.46 (including the origination fee) for 80 percent loan-to-value loans loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 adjustable rate mortgages increased to 4.09 percent from 4.08 percent, with points decreasing to 0.26 from 0.39 (including the origination fee) for 80 percent loan-to-value loans.

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Wells Fargo has become a better bank through its efforts to improve its operations, leadership and culture, Tim Sloan, CEO and president of Wells Fargo, told the House Committee on Financial Services.

Also, he outlined the company’s efforts to compensate customers for past issues and on how the bank is working to become the most customer-focused, efficient and innovative company it possibly can be.

“Above all, Wells Fargo is committed to making things right for our customers and earning back the public’s trust,” said Sloan in his testimony. “Wells Fargo is a better bank than it was three years ago, and we are working every day to become better still. This is an ongoing commitment by all 260,000 team members--starting with me--to put our customers’ needs first; to act with honesty, integrity and accountability.”

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Wells Fargo is making things right with customers who were harmed, how the company continues to strengthen risk management and controls, and how Wells Fargo’s culture has improved since he became CEO in 2016. He also provided updates on new Wells Fargo innovations aimed at providing customers with additional convenience and simplicity and the company’s deepening commitment to communities.

[caption id="attachment_10949" align="alignleft" width="327"] Sloan highlights steps Wells Fargo has taken to strengthen its business practices.[/caption]

Sloan told the committee that Wells Fargo is compensating retail bank customers who were impacted by past retail sales practices issues. To date, the company has reviewed 165 million accounts going back 15 years, contacted more than 40 million customers--both individuals and small businesses—through 246 million communications, and provided tens of millions of dollars in compensation to customers.

“We are taking responsibility not only for fees customers should not have been charged, but also for related effects such as impact on credit scores,” said Sloan. “Our guiding principle has been to err on the side of our customers, and we are taking an over-inclusive approach in doing so.”

Wells Fargo has centralized companywide control functions such as risk, finance, human resources, compliance and technology for better oversight. Within risk, the company has three “lines of defense”--front-line risk, independent risk management, and audit--to ensure multiple layers of review and to improve internal oversight.

It has also hired more than 3,000 new risk team members from outside the company since 2016 with plans to hire more, said Sloan. As a result, Wells Fargo has better visibility into issues as they emerge and can respond to them more quickly.

Since 2016, Wells Fargo’s culture has undergone substantial transformation, Sloan said.  It has introduced a clear set of behavioral expectations for team members and enhanced accountability through a single leadership objective that is part of every team member’s annual performance plan.

In 2018, Wells Fargo increased minimum base pay in the U.S. to the current minimum of $15 per hour. The company also granted restricted stock rights to around 250,000 team members and increased the total number of paid holidays from eight to 12--two additional national holidays plus two personal holidays that team members can use for any reason.

In addition, Wells Fargo enhanced its independent Ethics Line to make it easier for team members to report concerns and expanded a program that encourages team members to speak up when they see something that may need additional review, attention or expertise.

Wells Fargo has deepened its already strong commitment to good corporate citizenship, said Sloan. The company has consistently ranked among the leading corporate philanthropists in the U.S. For example, since Wells Fargo began its NeighborhoodLIFT program in 2012, the company has provided more than $442 million in down-payment grants to more than 20,000 families in almost 70 communities across the U.S.

In 2018, Wells Fargo expanded its philanthropic giving by more than 50 percent, donating more than $444 million to nearly 11,000 nonprofits nationwide. Beginning in 2019, Wells Fargo is targeting two percent of after-tax profits for corporate philanthropy.

 

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