June 7, 2019 – REsimpli’s Real Estate News and Market Update
REsimpli’s Real Estate News and Market Update
Rental Market Heating Up
According to data from HotPads, a Zillow-owned rental affiliate, there’s been a big change since last year in terms of concessions that are offered for rentals: the amount of concessions is down around 30% from last year. Furthermore, just 1 in 100 rental listings currently have move-in specials while at the same time rent prices are accelerating upwards. The median rent went to $1530 nationally, up 3.1% from a year ago. With the trend continuing like this, there should be more rent growth to come.
Rent prices are increasing in 36 of the nation’s 50 largest metropolitan housing markets. The biggest gains are in: 1) Austin, Texas 2) Phoenix, Arizona 3) San Jose, California. There are a few rental markets cooling though like Orlando, Florida. So it’s important to pay attention to different markets.
April Pending Home Sales Surprise
April pending homes sales to buy existing homes are down 1.5% compared to March according to data from the National Association of Realtors. Sales were also 2% lower compared with April 2018. This is surprising because industry experts were actually predicting a small monthly gain after the large increase in March.
Pending sales is an important indicator of future closings and therefore people use it to gauge activity in home sales. The strange part is that mortgage applications and consumer confidence has been rising despite this. The mortgage rates are also low this spring holding steady around 4.3% for most of April which is a lot lower than when the 30-year fixed rate soared to above 5% in November 2018.
Weekly Mortgage Applications Drop
According to data from the Mortgage Bankers Association, total mortgage application volume fell 3.3% last week compared to the previous week. The average contract interest rate for 30-year fixed-0rate mortgages with conforming loan balances remained unchanged at 4.33%. Mortgage applications to purchase a home fell 1% for the week but were actually 7% higher compared to a year ago. Mortgage refinance volume fell 6% for the week but is up 29% compared to a year ago because the interest rate a year ago was 51 basis points higher.
Federal Reserve Key Information:
The Federal Reserve policy affects all asset prices – from housing to stocks. Thus knowing the outlook gives investors insight and better predictability of the future.
Interest Rate: On January 30, 2019 the Federal Reserve said that it would keep its target range for its benchmark interest rate at 2.25% to 2.5%; they’ve kept this policy unchanged. The last release was on May 1st and they’ve decided to maintain the same rate.
Federal Reserve Outlook: The last meeting was May 1st and they are still holding steady. The most notable thing was that they said inflation was “running below” its stated target of 2%. The Fed did make a technical change in reducing the interest it pays on excess reserves parked at the central bank to stop effective interest rates from breaking outside of its current target range which could influence banks to lend more rather than keep their money at the reserve.
Other Key Data:
Data is backward looking and takes time to compile. That’s why the April data is the latest data out for home sales even though it’s June now. Home sales data from the National Association of Realtors:
Unemployment Rate: 3.6 percent in April, a decrease from 3.8% in March
REsimpli is founded by Sharad Mehta, a very active real estate investor. Sharad has done over 400 deals in last 6 years since he became a full-time real estate investor and over the years he has developed systems to automate many parts of his real estate investing. Sharad is a very active investor i See more >>
REsimpli is founded by Sharad Mehta, a very active real estate investor. Sharad has done over 400 deals in last 6 years since he became a full-time real estate investor and over the years he has developed systems to automate many parts of his real estate investing. Sharad is a very active investor in Lake County, Indiana market and he manages his entire business from Carlsbad, California, where he lives. Using the systems that Sharad has developed, he is able to manage 3-4 rehabs a month from a distance.
At reSimpli, our mission is to ‘Simplify Real Estate Investing Through Technology.’ Our team is passionate about using technology to reduce the time and energy required to build and manage a successful real estate business. reSimpli is a cloud-based system that makes real estate investing more efficient by automating tasks and helping the investor manage their business more efficiently.
We are constantly building and improving features that aid in: creating accurate and detailed scope of work for rehab projects, creating contracts with digital signature support, deal analysis tools, etc. We are a team of very active real estate investors so everything we are developing is something we find useful in our day to day investing.
Our passion is to create the best software for your real estate investing business and aim to be the only software program that a real estate investor needs to run a successful, scalable business. See less >>