Happy Halloween? Mortgage Rates Average 6.66%

Despite a slight decrease this week in mortgage rates, the average for the 30-year fixed-rate loan remains more than double what it was a year ago, adding hundreds of dollars per month to financing costs for home buyers. This is prompting more buyers to retreat from the market: Mortgage applications to purchase a home are down 13% week over week and have fallen 37% compared to a year ago, the Mortgage Bankers Association reported this week. “Rates remain quite high compared to just one year ago, meaning housing continues to be more expensive to potential home buyers,” says Sam Khater, Freddie Mac’s chief economist.

Realtor.com® reports that home buyers have lost about $107,000 in buying power this year. That means buyers who budgeted for a $500,000 home at the start of the year may now be able to afford a property worth only $400,000 or less.

For buyers who are able to still financially move forward, more are turning to adjustable-rate mortgages to lock in a lower rate. However, that rate can jump significantly over time. ARM rates are about a percentage point lower than the 30-year fixed-rate mortgage. The share of ARMs was 11.8% of mortgage applications last week, up from around 3% earlier this year, the MBA reports.

Will Higher Rates Spark More Urban Flight?

Home buyers may be tempted to expand their search criteria to find places that offer greater affordability farther away from city centers. Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®, notes that rural areas, which are seeing migration gains, continue to be a prime target for buyers. “With mortgage rates near 7%, many people are looking for more affordable homes in less dense areas,” Evangelou writes on the Economists’ Outlook blog. In general, she notes, homes are about 50% less expensive in rural areas and about 20% less expensive in the suburbs than in urban centers.

Freddie Mac reports the following national averages for mortgage rates for the week ending Oct. 6:

• 30-year fixed-rate mortgages: averaged 6.66%, with an average 0.8 point, falling slightly from last week’s 6.70%. Last year at this time, 30-year rates averaged 2.99%.
• 15-year fixed-rate mortgages: averaged 5.90%, with an average 1 point, dropping from last week’s 5.96% average. A year ago, 15-year rates averaged 2.23%.
• 5-year hybrid adjustable-rate mortgages: averaged 5.36%, with an average 0.3 point, increasing from last week’s 5.30% average. A year ago, 5-year ARMs averaged 2.52%.

Freddie Mac reports commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.

©National Association of REALTORS®
Reprinted with permission

A Passion for Giving That Outlasted a Pandemic

Five REALTORS® whose selfless drive and ingenuity helped fuel their charitable efforts to new heights in the midst of the COVID-19 pandemic have been named the National Association of REALTORS®’ 2022 Good Neighbor Awards winners. For 23 years, the Good Neighbor Awards has recognized real estate professionals who make an extraordinary impact on their communities through volunteer work. The five individuals named as this year’s winners exemplify how REALTORS® make their communities a better place to live, work and raise a family.

“I am so proud to honor our Good Neighbor Awards winners for how they’ve effected change to improve the lives of others in their communities,” says NAR President Leslie Rouda Smith. “Each of these REALTORS® has devoted hundreds of hours a year and raised huge sums of money for their respective causes. I salute them for their vision, dedication, passion and selfless generosity.”

Each of the five winners, who were selected by a multi-stage, criteria-based judging process, will receive a $10,000 grant for their charity and be featured in the fall 2022 issue of REALTOR® Magazine. They will also be presented with crystal trophies on Nov. 12 during NAR NXT, The REALTOR® Experience—the association’s annual conference—in Orlando.

Meet the 2022 Good Neighbor Awards Winners

Jennifer Barnes
Keller Williams Realty Peachtree Road
Brookhaven, Ga.

In 2020, Jennifer Barnes thought she would feed people for just a few weeks until the COVID-19-induced shutdowns ended. That experience opened her eyes to an underlying vulnerability in her affluent, Atlanta-area neighborhood that extended well beyond food. She founded the nonprofit, Solidarity Sandy Springs, which inspires more than 2,600 volunteers to provide wide-ranging community services for thousands of families, including free eye exams and glasses, flu vaccines, job fairs, back-to-school backpacks and more. Barnes has also distributed nearly one million pounds of food to approximately 46,000 shoppers. Read her story and watch the video.

Dennis Curtin
Legacy Investments
Kansas City, Mo.

Dennis Curtin founded Mimi’s Pantry to offer a more positive food pantry experience to people in need. The state-of-the-art, 6,000-square-foot facility welcomes shoppers to browse the aisles and choose their food, just as they would in a grocery store. The nonprofit invested in commercial refrigeration equipment and offers fresh meat, produce and milk. It also has a play area and library for kids and is currently building a greenhouse and an orchard of fruit trees and berry bushes. In three years, it has served 50,000 individuals. Read his story and watch the video.

Jim Edmonds
Emerald Isle Properties
Kilauea, Hawaii

Since the Hawaiian island of Kaua’i may only have a handful of homes for sale under $1 million at any time, Jim Edmonds, founder of the nonprofit Permanently Affordable Living (PAL) Kaua’i, partners with other nonprofits to build and convert affordable housing for workers. Edmonds navigates the complex challenges of poor infrastructure and resource scarcity through innovative, cost-saving solutions like solar energy, edible landscaping, shared electric vehicles and shared bicycles. Read his story and watch the video.

Heather Griesser LaPierre
RE/MAX Preferred Newtown Square
Newtown Square, Pa.

To address food insecurity in her neighborhood and worldwide, Heather Griesser LaPierre founded Kids Against Hunger Philadelphia. She rallies hundreds of volunteers each month to pack nutritious, ready-to-make pasta- and rice-based meals. When schools were shut down in 2021, she doubled production to 350,000 meals per month to ensure children who depended on school lunches were fed. Since 2015, she has packed and distributed more than 9 million meals. Read her story and watch the video.

MaliVai Washington
Diamond Life Real Estate
Jacksonville Beach, Fla.

For 26 years, MaliVai Washington Youth Foundation (MWYF) founder Mal Washington has been breaking the cycle of poverty through a vibrant after-school mentoring program. Originally rooted in his beloved sport of tennis, MWYF now serves 500 kids annually through a comprehensive youth development program of academic tutoring, leadership skills, financial training and fitness. He is proud of the 100% high school graduation rate of the program as the surrounding neighborhood’s dropout rate is 20%. Read his story and watch the video.

In addition to the winners, the following five REALTORS® have been recognized as Good Neighbor Award honorable mentions and will each receive $2,500 grants for their charity:

• Tamara “Tami” Hicks of Century 21 Signature Real Estate in Ames, Iowa, whose nonprofit Overflow Thrift Store has raised more than a half-million dollars for charities and has saved millions of items from landfills.
• Lisa Hoeve of Coldwell Banker Woodland Schmidt in Holland, Mich., whose nonprofit Hope Pkgs has provided overnight comfort bags to more than 4,200 foster children.
• Debbie McCabe of Berkshire Hathaway HomeServices Fox & Roach, REALTORS®, and the Trident Group in Devon, Pa., whose nonprofit Covenant House Pennsylvania houses and empowers young people facing homelessness.
• Debbie Miller of Webpro Realty in Lakeland, Fla., whose nonprofit kidsPACK feeds 3,000 children on weekends when they don’t get school lunch.
• Kathy Opperman of Long & Foster Real Estate in Collegeville, Pa., whose nonprofit Pillars of Light and Love has offered 800 free workshops and support groups to build self-esteem and resilience in adults and kids.

In September, realtor.com®, a primary sponsor of the Good Neighbor Awards, invited the public to vote for their favorite of the 10 finalists. The top three vote-getters all received additional donations for their charities. The following REALTORS® have been crowned as this year’s Web Choice Favorites:

• Kathy Opperman, who will receive an additional $2,500 bonus donation for Pillars of Light and Love.
• Debbie Miller, who will receive an additional $1,250 bonus donation for kidsPACK.
• Lisa Hoeve, who will receive an additional $1,250 bonus donation for Hope Pkgs.

©National Association of REALTORS®
Reprinted with permission

Wire fraud schemes are evolving, and scammers are finding new ways to infiltrate real estate transactions—including exploiting virtual meeting platforms to dupe home buyers and sellers. A hacker may break into an email account and invite your client to a virtual meeting. How will the client know he or she is being targeted by a scammer? Typically, the hacker will use a still picture, claim to have audio and video issues and then direct the client to initiate a fraudulent wire transfer, warns Charlie Lee, senior counsel and director of legal affairs for the National Association of REALTORS®, in the latest Window to the Law video.

A real estate agent, lender, attorney, buyer, seller or another party to the transaction could have their email hacked by a scammer who then poses as them. Victims who fall for these scams could lose the funds they’ve saved over their lifetime to move forward with a home purchase. Some real estate professionals have been named in lawsuits brought by clients who say their agents failed to prepare them for possible wire fraud scams adequately.

“Real estate is an attractive target for cybercriminals to steal large sums of money,” Lee says in the video. “Wire fraud usually involves a cybercriminal compromising a business or personal email account and sending the buyer or another party, in the last minute, a convincing yet fraudulent instruction to wire money to the wrong account.”

Lee urges real estate professionals to take the following steps:

• Talk to your clients and staff about the dangers of wire fraud scams and how to avoid them. Several REALTOR® associations have developed wire fraud notices for their members to use. Some require the client’s signature after reviewing. View examples.
• Tell clients to always verify wire instructions in person or through a known, trusted phone number. Do not trust wire instructions provided by email.
• Learn best practices for strengthening your cybersecurity both at home and in the office.
• Review your E&O and cyber liability policies. Ensure that you have sufficient coverage in case an incident occurs

©National Association of REALTORS®
Reprinted with permission

Renovation Startup Revive Wins iOi Pitch Battle

Revive, a technology startup enabling home sellers to update their properties with no upfront costs, was named Thursday as the winner of the fourth annual Pitch Battle at the National Association of REALTORS®’ 2022 Innovation, Opportunity & Investment (iOi) Summit in Los Angeles.

Twelve companies bringing solutions to the real estate market, from simplifying the home inspection process to helping renters save for a down payment, competed in the “Shark Tank”–style contest hosted by Second Century Ventures, NAR’s strategic investment arm. The contestants, representing companies in the U.S. and U.K., presented four-minute pitches to more than 400 conference attendees, including venture capitalists, futurists and real estate professionals. The Pitch Battle also was livestreamed to thousands of virtual attendees.

Revive founder and CEO Michael Alladawi highlighted the company’s hands-on approach to helping sellers maximize their property’s ROI. The company combines processes, technology and expertise to help owners and their agents create plans for renovations. Revive provides capital at no upfront cost to the homeowner and a vetted contractor to execute those plans. As the Pitch Battle victor, Revive will receive a prize package that includes $15,000, a national platform to help gain market share, and a booth at NAR NXT, The REALTOR® Experience—the association’s annual conference—this November in Orlando.

“Revive embodies the essence of iOi and our Pitch Battle,” says NAR CEO Bob Goldberg. “The products and services that were on display will have a tremendous impact on consumers and real estate agents. I’m thrilled we have this opportunity to promote the progress unfolding in the market, and I congratulate Revive on the well-deserved victory.”

In-person and virtual iOi audiences also voted on the Pitch Battle’s Crowd Favorite, which was awarded to Stake, a loyalty program delivering cash back for renters. Available in 30,000 homes nationwide, Stake empowers renters to save, build wealth and unlock free and equitable banking services. Stake cofounder and CEO Rowland Hobbs explained how rental communities that offer Stake outperform others with dramatically improved demand, loyalty and retention.

See the full list of 2022 Pitch Battle finalists.

©National Association of REALTORS®
Reprinted with permission

Mortgage Rates Inch Closer to 7%

Home buyers who waited to buy a home this month compared to last month may have some regrets. Home buying is 12% more expensive than just a month ago. Fast-rising mortgage rates—up one percentage point in September alone—have added an extra $250 more onto monthly mortgage payments over the past month, Nadia Evangelou, senior economist and director of forecasting, writes at the National Association of REALTORS® blog.

The higher rates are prompting the housing market to drastically slow: Pending home sales fell 24% last month compared to last year, and existing-home sales were down 20% annually in August.

Freddie Mac reports the 30-year fixed-rate mortgage averaged 6.70% this week. That is up from 3.01% a year ago.

“The uncertainty and volatility in financial markets is heavily impacting mortgage rates,” says Sam Khater, Freddie Mac’s chief economist. He adds that home shoppers would be wise to shop around.

“Our survey indicates that the range of weekly rate quotes for the 30-year fixed-rate mortgage has more than doubled over the last year,” he notes. “This means that for the typical mortgage amount, a borrower who locked-in at the higher end of the range would pay several hundred dollars more than a borrower who locked-in at the lower end of the range. The large dispersion in rates means it has become even more important for home buyers to shop around with different lenders.”

Mortgage Rate Averages For This Week

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 29:

• 30-year fixed-rate mortgages: averaged 6.70%, with an average 0.9 point, rising from last week’s 6.29% average. Last year at this time, 30-year rates averaged 3.01%.
• 15-year fixed-rate mortgages: averaged 5.96%, with an average 1.3 point, increasing from last week’s 5.44% average. A year ago, 15-year rates averaged 2.28%.
• 5-year hybrid adjustable-rate mortgages: averaged 5.30%, with an average 0.4 point, rising from last week’s 4.97% average. A year ago, 5-year ARMs averaged 2.48%.

Freddie mac reports commitment rates with average points to better reflect the total upfront costs of obtaining the mortgage.

©National Association of REALTORS®
Reprinted with permission

FHA Moves to Include On-Time Rental Payments for First-Time Buyers

The Federal Housing Administration published a letter to lenders on Tuesday urging them to consider including a borrower’s positive rental payment history when applying for FHA-insured financing. The move is believed to be a boost for first-time home buyers to help to improve their credit scores when applying for a mortgage, the memo reads.

“If you’re regularly paying your rent on time, that’s a good indication you will also pay your mortgage on time,” says Julia Gordon, Federal Housing commissioner. “We hope that adding this positive factor to all of the characteristics currently considered in an FHA credit evaluation will increase access to affordable FHA-insured mortgages for first-time home buyers.”

The FHA will consider positive rental payment history as the on-time payment of all rental payments over the last 12 months. Lenders originating purchase mortgages for FHA insurance will be required to obtain verification of the borrower’s timely rental payments and indicate it on their TOTAL Mortgage Scorecard, which the FHA uses to evaluate borrower credit history and mortgage application information when underwriting loans.

“This change makes FHA requirements more flexible and can help remove barriers to homeownership, particularly for those with nontraditional credit or thin credit files,” says Julienne Joseph, deputy assistant secretary for single-family housing.

The FHA’s move follows on the heels of an announcement by Experian, one of the main credit bureaus, earlier this month that its Experian Boost program would offer a way for consumers to add qualifying, positive residential rental payments directly to their credit file. Experian’s research has determined that 66% of its consumers will see an instant increase in their FICO score by factoring in on-time rental payment data. The credit bureau said consumers who would see the biggest improvement—of about 14 points—are those with thin credit files or low FICO scores.

Also, Fannie Mae launched this week a “Multifamily Positive Rent Payment Reporting” pilot program, which is aimed at helping renters build their credit histories and boost their credit score. The program allows eligible property owners to share on-time rent payment data through a system to the three major credit bureau’s so it can be included in the renter’s credit profile. It’s the latest of several initiatives from the government-sponsored enterprise to get rental payment history included in the underwriting process.

In 2021, Freddie Mac announced a new program to help renters build up their credit profiles and help make them more creditworthy. The initiative provides a means for owners or managers of multifamily properties to report on-time rental payments to the three major credit bureaus.

The move was aimed at helping a portion of the more than 45 million U.S. adults who have no credit score.

©National Association of REALTORS®
Reprinted with permission