The Accunet Mortgage Show (10/6/19 Episode)

Brian Wickert and special guest Kevin Custer discuss the biggest topics in the mortgage industry, including the upcoming election year, FHA loans and recent data on the SE Wisconsin market.

The Accunet Mortgage and Realty Show, February 10th, 2019

This week on the Accunet Radio Show:

Brian Wickert is joined by Accunet loan consultant Kevin Custer to discuss September home sales, whether the 2020 election will affect mortgage rates, and why now is a great time to apply for a rock-solid mortgage preapproval.

This week’s highlights

  • Economists’ forecasts predict the rates for 30-year fixed-rate loans to stay between 3.4% – 3.7% throughout 2020.
  • So far in 2019, SE Wisconsin home sales have increased by 22% since 2007, which we once considered the peak of the housing market.
  • Anyone who says millennials aren’t buying homes is just plain wrong; Older millennials (born as late as 1989) account for 26% of all home sales!

Will the 2020 election impact mortgage rates?

In Brian’s opinion, the 2020 election will have no impact on mortgage rates. Any correlation between an election year and a change in interest rates is usually incidental — not cause and effect.

In fact, economists from Fannie Mae, Freddie Mac and the Mortgage Bankers Association are predicting the rates on a 30-year fixed-rate loan will remain in the 3.4% – 3.7% range for the length of 2020. However, this should be taken with a grain (or a few) of salt — they also predicted interest rates would be around 5% during fall 2019.

The biggest risk to interest rates would be if the Trump administration signed a deal with China to end the trade war. In that instance, rates would probably go up.

FHA Loans: Home improvement requirements

FHA loans are a great option for a variety of home-shoppers: They’re guaranteed directly through the government, only require a 3.5% down payment, and have a financeable premium.

That being said, there are certain requirements to keep in mind when using an FHA loan. The government has specific lending requirements for both the shopper and the home itself. Overlooking structural flaws that might otherwise be okay under local code could get you in a bind when using an FHA. When using an FHA loan, make sure to account for the following:

  • A handrail must be installed anywhere there are more than 3 steps.
  • Any broken glass needs to be fixed.
  • Chipped or peeling paint needs to be scraped and repainted.
  • Trip hazards (like uneven payment) must be fixed.

SE Wisconsin market update

Housing market in 2007 vs. 2018

2007 is often cited as the peak of the housing market. But in Wisconsin (specifically, southeast Wisconsin), the trends from 2007 continue to be out-performed — great news for the housing market.

According to NMLS data, the median sales price is up 9%, from $193,000 in 2007 to $210,000 in 2018. 4,000 more homes and condos sold in 2018 than in 2007. That’s a 22% increase, with a 30% increase in dollar value (over one billion dollars!).

Condo sales Sepember 2019

While there is still a decided shortage in condo listings, the numbers aren’t looking too bad:

  • Condo sales were down 7.5% compared to September 2018, with only 25 closed sales.
  • Median condo sales price was $185,000 — a 12% year-over-year increase.

Home sales September 2019

Single-family detached home sales were up in September, which surprised Brian, due to a continued lack of new listings. 

  • Single-family detached home sales were up by almost 8%, with 1,537 homes sold. 
  • Median home sales price was $247,000.