Join us on the Memorial Day episode of The Accunet Mortgage and Realty Show, and get the latest on loan rates, client updates and more.
This week on the Accunet Radio Show:
Brian and David Wickert walk you through the Federal Reserve’s economic health survey, share the fastest and slowest markets in the metro-Milwaukee area, and share a secret to success for buying a home in today’s market.
This week’s highlights
- The Federal Reserve surveyed 11,000 Americans representative of the general population. In the survey, 39% said they couldn’t cover a $400 unexpected expense.
- Currently, the fastest-moving market in the five-county metro-Milwaukee is Greenfield, with an average of 20 days between listing and closing.
- Thanks to the trade tariff and Theresa May’s resignation, rates are still favorable; Fannie Mae has reduced the number of federal rate hike increases for this year and next year to zero.
The Federal Reserve’s economic health survey
The Federal Reserve’s main job is to manage unemployment and inflation. As a part of this, they perform an annual survey on economic health. They recently released their 2018 survey, where they questioned 11,000 Americans representative of the general population (based on location, income, education, race, etc.) to ascertain how people feel about their economic wellbeing. This information is great for those in the real estate market, since economic wellbeing pretty much always affects home sales. Here are some of the key findings:
Question: Could you cover a $400 unexpected expense?
- 61% said they could cover it with cash-on-hand or credit
- 39% say they couldn’t cover it with cash-on-hand or credit
- 37% say they could cover it by selling something or borrowing money
- ~8% say they couldn’t cover it at all
Question: How are you doing financially?
- 75% say they’re doing okay or living comfortably
- 12% are doing better than 2013
- 87% of adults with bachelor’s degrees or higher are doing at least okay
- 64% of adults with high school diplomas or less are doing at least okay
- 56% say they’re better off financially than their parents were at the same age
Question: What is your households’ annual income?
- 25% have an income of $25,000 or less
- 37% have an income of $40,000 or less
- 53% have an income of $50,000 or more
- 27% have an income of $100,000 or more
Don’t break the bank to buy a house. Reach out to Accunet Mortgage for help with your next home purchase.
Rates are still looking great, thanks to the trade tariff and Theresa May’s resignation. Right now, Accunet can offer rates as low as:
- 3.99% (30-year fixed with 25% equity on a $200,000 loan, with $995 in loan costs and 4.02% APR
- 3.625% on a 15-year fixed on a $200,000 loan with $995 in loan costs and 3.67% APR
Southeast Wisconsin’s fastest — and slowest — real estate markets*
Following recent trends, we’re still seeing a seller’s market for the majority of SE Wisconsin homes. Based on April home sales, the average home took just 58 days to go from listing to accepting an offer. Based on our data, here are the fastest (and slowest) moving markets:
|Greenfield – 20 days||Bayside – 4.1 months|
|Greendale – 22 days||Port Washington – 4.5 months|
|Jackson – 27 days||Delafield – 4.6 months|
|Cudahy – 28 days||Burlington – 4.7 months|
|Muskego – 29 days||Mequon – 5 months|
|South Milwaukee/Hales Corners – 30 days||Oconomowoc – 5.6 months|
|Whitefish Bay – 32 days|
|Waukesha – 33 days|
|Cedarburg – 35 days|
*This data reflects single-family homes in an area with at least 10 sales, and denotes the dates between listing and getting an accepted offer.
Client update: Helping a retired couple optimize their assets
Being low-income isn’t synonymous with being poor. One of our clients, a retired couple purchasing a condo in Waukesha County, are in the $40,000 income range, even though they have $1.6 million in assets.
Right now, they have an accepted offer on a new construction condo in Waukesha County. There are 12 units in the development, but only 8 are constructed — meaning they’re not eligible for mortgages from Fannie Mae or Freddie Mac. Luckily, we have a bank who will work with us on what are called “non-warrantable condos,” placing them outside Fannie and Freddie’s box.
They’re currently selling their home in Wauwatosa in the low $500,000-range. They’re taking a very small mortgage on their condo, so (by our estimate), they should walk away from the sale with roughly $500,000, with the intent to put $100,000 down on the condo.
We learned that, over the last 5 years, their financial advisor has been getting them an annual rate of return of 7-8%. So, we suggested a loan at 3.875%, after which they’d take the money they didn’t put down, give it to their advisor and voila! They’d wind up with a $14,000 bonus instead of buying the condo outright.
What’s the true value of a home? Whatever you’re willing to pay for it.
Client update: Becky’s secret to home-buying success
Regular listeners will recognize Becky’s story: After 8 failed attempts to purchase a home, she finally had an offer accepted last Sunday. But how’d she do it?
Well, the folks at Accunet helped her realize and quantify exactly how little it would hurt if she overpaid for her house by $11,000. We know — it sounds like a lot at first. Let’s break down the numbers.
Originally, she wanted to put 20% down on her home. We showed her that, by putting just 19.5% down, she qualifies for a moderate-income 30-year fixed-rate loan through Fannie Mae (known as the “Home Ready” program), which means the pricing was actually an improvement over the 20% down.
We also helped her amend the appraisal contingency in her Offer to Buy. So, let’s say the house was listed for $175,000 — she offered $186,000. A traditional appraisal contingency would take that information, and translate it into, “If the appraisal comes in under $186,000, I have the right to cancel the purchase.” Instead, we wrote an amendment to the effect of, “As long as the appraisal comes in at $179,000, I’ll keep the purchase going.” So, worst case scenario, it appraises out at $179,000, which then we as lenders use to get PMI.
The next step in Becky’s process is the appraisal; We’ll keep you updated as the story unfolds.
We’re in the business of helping real estate agents and their buyers realize how to win in an ultra-competitive market — and how important overpayment can be.