4 Data-Backed Ways To Be a Successful Real Estate Agent in 2021

4 Data-Backed Ways To Be a Successful Real Estate Agent in 2021

While there’s no such thing as “set it and forget it” when it comes to real estate success, there are some proven ways you can leverage technology and teams of experts to help you make sure your success is growing, systemized, and sustainable. That means when you’re growing and goal-hitting, you’re also scaling, future-proofing and making sure you have the systems in place to keep up and keep reaching higher. So, How do you make sure that happens? We rounded up the top 4 data-backed and top-producer approved strategies, and the systems and services they swear by.


Lead Generation Real Estate Plan

Make your data work for you


Simon Sinek once said, “The great leaders are not the smartest; they are the ones who admit how much they don’t know.” It’s a lesson so many of us have had to learn this year, and yet, it’s an idea that goes against the common misconception of what leadership looks like—a lone wolf, bearing the burden on their own.


Many real estate professionals have trouble applying this knowledge to how they run their teams and offices. Many have the real estate expertise, they know exactly how to cultivate relationships, leverage market data, and get folks to the closing table, but they neglect to run their operation like a true business, leveraging systems and metrics to create a foundation for success, and a plan that scales.


It’s crucial to arm yourself with the tools that’ll both gather that data (lead behavior, ad performance, communication metrics), and translate it into insights and reports that work for you. This is how you optimize your business and systemize your success. And this is true tech partnership. A predictive CRM that prioritizes your work and makes it seamless to launch campaigns and understand performance.


For example, there are several data points and KPIs that’ll determine if your conversion rates will be on point. In BoomTown’s CRM, the Vitals Dashboard is one of our most-used features. Like a report card for a team or brokerage, it gives brokers instant insight into agents’ performance and benchmarks it against other users with similar team size and tenure.


The report measures: Active Opportunities, Under Contract opportunities, Closed opportunities, New Leads, New Leads that have been contacted, New Leads that have not been contacted, and Response times. 


An agent leaderboard, and an agent-specific version lets agents track and monitor their own performance, and brokers can take action in real-time to reassign leads, send a bulk text or email, or send a reminder to the agent. When the data is easy to digest, it’s easy to course-correct and make sure you’re optimized for success.


Real Estate Lead Generation


Engage, Re-engage, and build better relationships, automatically

Build relationships, showcase your market expertise, and nurture through to conversion with automated behavior tracking, advertising, and communication tools.


A predictive CRM with automated marketing that’s integrated with your website means your prospects can be sorted, tagged, and put on effective drip campaigns and e-Alerts to keep them engaged, without any manual follow-up from agents.


Leveraging social media advertising, like BoomTown’s Marketing Central ad builder, to drive more engagement with your database, generate more leads for listings, and show real-time value to seller clients. (Check out what Inman News had to say about BoomTown’s Marketing Central!)


It’s high-tech, but also high-touch, so your prospects feel like they’re getting a dedicated one-on-one service, but you’re able to scale that exceptional experience.


Lead Generation Plan

Let the data deliver top opportunities and actionable insights


How are you working your database? Forcing yourself to cold call X number of leads a day? Yikes. That’s no fun, and 97% of cold calls fail. Your database is a gold mine, though, so let’s work it a little smarter.


Your CRM should be tracking every action a lead takes on your site, and surfacing insights your agents can act on like “back on site after a month” or “just favorited a property.” Even “currently on site.” These alerts let you know they’re ready, and they’re active, and you have a reason to reach out.


It’s critical to have information about your leads at your fingertips. This means utilizing powerful software and the latest technology to make your prospecting So. Much. More. Effective. In BoomTown’s CRM, you can take your database, and sift and sort into different buckets of leads with similar interests. Then you can easily filter and segment them with your marketing efforts. By compiling a list of who the leads are, what areas/price points they’re looking at, and their timeline, you immediately have a “warm” list of leads to call. You know where to start the conversation and your sales effectiveness rises. Talk about productivity!


This means you can easily create tailored messages to large groups of leads for smarter outreach.


Real Estate Lead Generation


Prioritize dollar-productive activities, and outsource to the experts


Hitting that GCI goal means taking control of your time. It’s easy to get caught in the whirlwind, but real results come from working on your business instead of in it. On average, BoomTown customers report that they are empowered to spend 50% more time on dollar-productive activities. Hot leads are prioritized, systems are optimized for accountability, and agents are freed up from admin work.

There’s a proven formula for success: prioritizing your time based on your most dollar-productive activities, leveraging the value of your database, and diversifying and growing your lead sources. Most real estate professionals are experts in their field, but that doesn’t mean they’re experts at digital marketing, or necessarily need to flex their expertise to nurture buyers and sellers who are far-out in the buying or selling process.


So, back to that formula, leverage services that can help you prioritize your time. BoomTown’s lead concierge services and digital marketing team have you covered when it comes to expertly targeting your ideal client online, getting them interested in your brand and business, and then our lead response team will respond to them and nurture them, 24/7, in as little as 90 seconds, on behalf of you. What’s better? You still stay in the driver’s seat. Get in-depth reporting on your ad spend and reach, and watch conversations in real-time from the CRM and app (and jump in at any point). It’s the best of both worlds.


In over a decade of driving real estate success, we’ve developed a solution to solve every business challenge you’re facing, and create real results that take you higher. From accountability and reporting, to scaling your service offering, and everything in between, we’ve got you covered. See what your business could be with BoomTown.



The post 4 Data-Backed Ways To Be a Successful Real Estate Agent in 2021 appeared first on BoomTown!.

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Top 10 Priciest Streets in the Hamptons | PropertyShark

Top 10 Priciest Streets in the Hamptons | PropertyShark

Key Takeaways: 

  • Quogue’s Dune Road is the #1 most expensive Hamptons street with an $11 million median sale price 
  • The priciest sale of the 10 most expensive streets clocked in at $32 million   
  • Seven towns claimed the top 10 priciest streets in the Hamptons 

As the first half of 2022 wrapped up amid a wide range of economic shifts, the luxury real estate market is showing signs of a cooldown. After two years of dynamic sales activity driven by pandemic-induced relocations as people flocked to more isolated country homes, the first six months of 2022 paint a different picture.  

Economic volatility, rising interest rates and surging inflation, as well as the rebound of international travel, are reshaping the Hamptons home sales market. These factors are likely indicators of a slow return to a more normalized, pre-pandemic real estate landscape following two years of frenzied transactions and price hikes that further lifted Hamptons beach communities among the most expensive U.S. zip codes.  

Hamptons Median Sale Price Exceeds $1.5 Million in First Half of 2022 

Taking a closer look at sales patterns and buyer preferences, we focused in on communities in the Hamptons to see which streets commanded the highest median sale price between January and June 2022. To identify the 10 priciest streets, we looked at all residential transactions closed in the first six months of this year. For an accurate representation, we only took into consideration streets with three or more sales closed. 

The Hamptons median sale price reached $1.54 million in the first half of the year, inching up just 5% compared to the median sale price in the first half of 2021 ($1.47 million). However, the number of sales registered from January through June of this year fell by 48% compared to H1 2021. A total of 894 transactions closed between January and June 2022 in comparison to the 1,715 deals recorded over the same period last year. 

Although the Hamptons’ priciest street reached a $15 million median sale price back in 2018, in the first half of 2022, the median sale prices of the 10 priciest streets ranged between $2.5 million to $11 million. Similarly to 2018, the 10 priciest streets were claimed by seven towns in 2022 as well, with Amagansett, East Hampton and Southampton returning to the top 10. However, Sagaponack, Montauk, Water Mill and Bridgehampton were replaced this year with Quogue, Sag Harbor, West Hampton Dunes and Westhampton Beach.

The presence of Amagansett and Quogue was to be expected, considering both ranked among the most expensive zip codes in 2021, placing 37th and 38th nationwide. 

Of the 10 priciest streets, Southampton’s Hill Road had the most dynamic sales activity, closing 12 transactions in the first half of the year. It was followed by three East Hampton streets with a total of eight sales each and Dune Road in Westhampton Beach with six transactions recorded in H1 2022. 

Median Sale Prices Stay North of $4 Million on the Five Priciest Hamptons Streets  

1. Dune Road, Quogue 

With an $11 million median sale price, Dune Road in Quogue was the #1 priciest street in the Hamptons in H1 2022. Of the three transactions that closed over the six-month interval, the largest was the $17.5 million sale of an oceanfront home at 232 Dune Rd. Dubbed an “ultra-high-end estate,” the 8,300-square-foot home was recently completed on a 2-acre lot.  

The gated property is set back from the road for privacy and boasts 128 feet of ocean frontage and views of Shinnecock Bay. The last asking price before closing the sale of the seven-bedroom, seven full-bath home was $20.7 million. 

2. Marine Boulevard, Amagansett 

An $8.9 million median sale price secured the #2 spot for Amagansett’s Marine Boulevard, which saw three sales close in H1 2022. The $9.5 million off-market sale of a 2,000-square-foot home at 51 Marine Blvd. was the highest-priced deal of the three.  

Sitting on 0.67 acres — a small lot but of a typical size for the area — the property features 110 feet of ocean frontage and even boasts a pool on the roadside of the property. Mickey Drexler, former CEO of J. Crew and The Gap and the new owner of 51 Marine Blvd., is no stranger to the Hamptons, having owned several properties in the area, ranging from Westhampton to Montauk. 

3. Bluff Road, Amagansett 

The second Amagansett street to secure a spot on our list is Bluff Road, which has seen a total of four sales that brought its median sale price to $6.7 million. The priciest transaction on Bluff Road in H1 2022 is also the most expensive deal in our top 10 and consisted of the $32 million off-market sale of 325 Bluff Rd., closed in the first quarter of the year. Located between Indian Wells and Atlantic Beaches, the oceanfront property is set on 2.59 acres and previously traded for $7.9 million in 2012. 

4. Bittersweet Lane, Sag Harbor 

Totaling three sales in the first six months of the year, Bittersweet Lane in Sag Harbor ranked #4 with a median sale price of $5.4 million. The highest-priced transaction on this Hamptons street was recorded in the second quarter: The waterfront property at 32 Bittersweet Ln. changed hands for $6 million in June. 

Situated on the end of a private road, the 2,200-square-foot, two-story home sits on a 0.33-acre lot and features four bedrooms, two bathrooms and an outdoor pool. In 2021, the oceanfront asset was listed along with two other properties located at 24 and 28 Bittersweet Ln., respectively. The package offering was listed at a $10 million asking price at the time, but ultimately, 32 Bittersweet Ln. sold separately. 

5. Dune Road, West Hampton Dunes 

The median sale price on Dune Road — this time in West Hampton Dunes — clocked in at $4.2 million. Of the four sales recorded between June and January 2022, the highest-priced deal on this Hamptons street commanded $5.8 million. 

Sold in late March, the waterfront property at 777 Dune Rd. features seven bedrooms, six full bathrooms and one half-bathroom, as well as a pool. Spanning 3,870 square feet, the post-modern home was built in 2004 on a 0.65-acre lot. 

Explore the table below for the full list of the 10 most expensive streets in the Hamptons:


To determine the most expensive streets in the Hamptons in H1 2022, we took into account streets with three or more home sales closed between January and June 2022.  

Package deals and sales under $10,000 were excluded. 

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Leveraging Location Intelligence to Inform your Real Estate Portfolio Decisions

Leveraging Location Intelligence to Inform your Real Estate Portfolio Decisions

My favorite part of writing this blog is getting the opportunity to meet really innovative leaders and learning about all of the exciting technology which is getting introduced across the different real estate sectors.  Based on my experiences from current and former roles, the areas of the Real Estate industry that I know best are Commercial, Multifamily, and Residential.  But, I have a strong curiosity to continuously learn about the other real estate asset types and to stay on top of the latest technology solutions that support them.  I recently spoke with the executive team of a PropTech company in the location intelligence space that primarily serves the Retail sector, and I was blown away by their offering.  

Location data is a topic that we hear more and more about.  Whether it’s a solution launched by a new startup, or an existing player enhancing their offering through location services, there are a myriad of use-cases for this data.   Little did I realize the innovative ways that companies were offering B2B solutions.

Placer, founded in 2016 and having raised $166M, provides traffic analysis for every property in the US.  In other words, they can provide data on how many people pass by (or enter into) any location in the country,  including the day of week and time.  In order to obtain this data, Placer has built partnerships with popular App developers.  The data that they receive is completely anonymized (and users need to opt-in), so they are reporting on where visits are being made on an aggregate basis, instead of activity of any specific person. In fact, they built their technology to never include the information of an individual user.  Even though they do not receive location data from everyone in the country, they use a combination of algorithms and AI to fill in the gaps and provide what they say is the most accurate foot traffic reporting in the industry.   

There are certain use-cases that are very straightforward.  For example, a retail broker that is marketing a storefront can provide prospective tenants with accurate foot traffic analytics so that they can make an informed decision about whether or not the location will be ideal for their business.  And even though that use-case in itself is incredibly valuable, it is just scratching the surface for what’s possible with the tools that they provide.  Placer’s reporting isn’t restricted to just the number of people who walk by a vacant storefront each day.  They can see where shoppers go after they leave a particular store, how far they are willing to travel from home when choosing a restaurant at which to eat, or how long of a commute to work people are willing to endure.  With this information, millions of businesses can make important decisions which are informed by actual data.

Unlike most solutions that have a very specific purpose, companies are continuously coming up with innovative ways to leverage Placer’s platform to gain an edge over their competition.  Below is a small sample of some of the features and use-cases that I found most intriguing.

Trade Areas 

A Trade Area is a polygon which can be drawn on a map around any specific location which depicts where the people live that visit that location (it shows their general location, not the exact person nor their home address).  In addition to providing insights for a retailer as to where their customers are coming from, they can also see where their competitors’ customers are coming from.

With this data, companies can make informed decisions as to where they should spend their marketing dollars.  Instead of just advertising to an arbitrary radius around the location, they can target the specific towns where their customers are coming from, or even better, where their competitors' customers are coming from.

Another use-case for Trade Areas is planning future expansion or contraction of a retailer's physical footprint.  One of the biggest fears that multi-unit operators have is cannibalization.  They want to make sure that when they open up additional locations, they are servicing NET New customers, not just pulling the same customers that were already patronizing their other locations.  In order to find the right location, they can draw trade areas around their existing locations along with trade areas around vacant storefronts.  By layering in demographic data from 3rd party vendors through their marketplace, they can easily find similar markets to expand into that don’t cannibalize their existing customers from other locations.  The same principle can be used if a company wants to consolidate locations.  By drawing trade areas around all of their existing locations, they can identify overlapping trade areas, informing them of which location they can shutter without losing customers.  This solution can be game changing for franchisors, restaurant owners, retailers, brokerage offices, hotels, car dealerships and just about any business that has more than one location.

Investors / Analysts / Retailers

When deciding which stocks to invest in, investors are always looking for an edge to see how a company is performing in advance of earning announcements.  Insider trading laws require investors to rely solely on publicly available information, and Placer can play a huge role in this process.  The platform provides data on how many visits are being made to any location, and compares this number to historical visits and that of its competitors.  They publish data within 3 days which provides near real-time visibility.   If an investor sees that visits to Walmart have increased 20% quarter over quarter, while visits to Target have only increased 6%, they can back into a general assumption about the revenue growth for each operator.

Target can then dig deeper into the analysis to determine if customers that visit both retailers typically stop in their store first, or if they more often go into Walmart first.  They can also see how much time a customer spends in each store on average.  If they see that shoppers come into their business first and spend an hour, and then go into Walmart afterwards and spend only 20 minutes there, they can make assumptions about what’s driving that customer behavior.  Utilizing the example above, a conclusion could be made that consumers prefer to go into Target to get a feel for inventory options and pricing, but then head over to Walmart to make their purchases because their pricing is more competitive.  Target can use this information to adjust pricing, store layouts, or other strategies to better capture their customers' spend before they leave.


Often it is the case that people that live in certain markets travel and vacation to similar destinations.  For example, at a previous role that I had at a real estate brokerage servicing the northeastern US, we concluded that many people that lived in Fairfield County Connecticut traveled up to Stowe Vermont in the winter for ski trips.  During the summer months, many of those same households traveled to specific towns on Cape Cod.  Of the residents of this county that owned second homes, the destination that was most popular for them was Naples Florida.  By understanding where their customers are most likely to come from, the travel industry can focus their marketing spend in these areas.  The beneficiaries of this data include hotel owners, Airbnb hosts, real estate agents, travel agents, restaurant owners, and just about anyone who makes a living off of tourism.  Going a step further, airlines can even optimize routes based on where they are seeing changing travel behavior.

Office / Hybrid Workforce

The pandemic has accelerated the biggest change to where/how people work in a generation.  Now that many companies have either instituted a hybrid work strategy or are in the process of trying to figure one out, they are entering uncharted waters and they have many unanswered questions.  How far are their employees willing to commute to work?  How much permanent space or flex space do they need, and where should these sites be located?  Where do their visitors/customers come from, and how far are they willing to travel?  Additionally, flex space providers are trying to determine the best locations to open up new sites and how big these spaces need to be.  Also, building owners are trying to assess how much risk they have regarding leases not being renewed due to their occupiers’ workforce not willing to travel.  All of this information can be gleaned from Placer’s data by looking at the general areas where people that commute to an office are coming from, and how far people are willing to travel each day.  It's not just the owners and occupiers that are affected by this changing behavior.  It’s also the mass transit operators, the local restaurants that workers eat at, office supply vendors, construction companies, and more.

The list of use-cases is nearly infinite.  Consumer Packaged Goods companies (CPGs) can use this data to get a deeper understanding of the offline retail trends and better understand their customers’ journeys.  Multifamily developers can gain insight to where there are the biggest needs for apartments.  Local governments can understand migration trends, gain visibility into the COVID recovery to see if residents are returning to normal routines, and measure the success of initiatives (for example, did the new dog walk that they added to the local park drive more visitors).  Placer has also built a 3rd party marketplace that allows data providers to overlay their data onto Placer’s platform to provide deeper insights for a variety of businesses and applications.  And the more users that they gain on the platform, the more use-cases get discovered.

As location based services continue to grow in popularity, so does the concern that consumers have about privacy.  When I met with the team at Placer, privacy was the one topic that I focused most heavily on.  Sure, the Placer platform provides unprecedented levels of value, but at what cost to society.  When I brought up my concerns, it was clear to me from their answers that privacy was the number one most important priority to them.  I can honestly say that I left the conversation feeling very satisfied with the way that they approach this important topic.

First, all of the data that they receive is completely anonymized.  Any information that can identify a specific person is stripped away before the data ever reaches the Placer team.  Secondly, all of their 3rd party App partners require their users to Opt-In to share any data.  If a user isn’t interested in being included, they can easily opt-out any time.  Placer’s business model has nothing to do with individual identities; they only focus on aggregated location data.

To further punctuate this point, the Placer team used an analogy on how the practice of anonymized data has become the norm in other fields.  There is almost no data on the planet that is more sensitive and protected than health records.  HIPAA provides broad protections for all individuals to ensure that their medical records remain completely confidential.  Health care providers are not permitted to release patient records to others without the patient's authorization.  Yet, positive COVID results (and other viruses and diseases) are reported publicly by each town, county, and state.  Not only is this practice permitted, but it is generally accepted and even expected by the population.  Just like medical records, as long as the data is anonymized and all personal identifiable information is completely removed, location data can be collected and reported on without violating anyone's privacy.  Placer goes the extra step by requiring that all users opt-in before any of their data is included in their reporting.  Placer is checking all of the boxes of protecting individual privacy and they take this responsibility extremely seriously.  Placer continues to dedicate significant resources to ensure that they are doing everything possible to protect individual privacy.  



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UWM Overtakes Rocket Mortgage As Biggest US Lender After Strong Q3

UWM Overtakes Rocket Mortgage As Biggest US Lender After Strong Q3

New markets require new approaches and new tactics. Experts and industry leaders will take the stage at Inman Connect New York in January to help you navigate the market shift — and prepare for the next one. Meet the moment and join us. Register here.

Wholesale mortgage lender UWM Holdings Corp. has surpassed Rocket Mortgage as America’s biggest provider of home loans, after slashing rates in June to grow the company’s market share and boosting third-quarter purchase loan production to record levels.

Rising mortgage rates have severely curtailed the entire mortgage industry’s profitable refinancing business. But UWM says it’s been able to attract not only homebuyers, but mortgage originators who work for banks and other retailers, by offering better rates and the latest technology.

In announcing third-quarter earnings Friday, UWM CEO Mat Ishbia credited the mortgage brokers who send business to UWM for the company’s success.

Mat Ishbia

“Well, I didn’t know when, but I was confident this day would come,” Ishbia said on a conference call with investment analysts. “Because as I continue to say, brokers are the best place for consumers to get a loan and the wholesale channel is the best place for a loan officer to work. And that is why we are number one, together as a community with our brokers.”

Pontiac, Michigan-based UWM, the parent company of United Wholesale Mortgage, reported third-quarter net income of $325.6 million, and $684.2 million in revenue. Net income and revenue were essentially flat from a year ago, and both benefited from a $236.8 million increase in the fair value of UWM’s mortgage servicing rights.

But UWM’s record $27.7 billion in third quarter purchase loan originations exceeded Rocket Mortgage’s total loan production — both purchase and refinancing. Rocket Mortgage, which does not break out purchase and refis, reported Thursday that total third-quarter mortgage production was down 73 percent from a year ago, to $23.7 billion.

UWM is already publicizing its leap to the top of the mortgage heap — Google “UWM” and a paid ad declaring the company “The New #1 Mortgage Lender” appears on top of search results.

Screenshot of top paid search result for “UWM” on Friday, Nov. 4.

Shares in UWM, which in the last 12 months have traded for as little as $2.84 and as much as $7.51, gained 20 percent Friday after UWM released earnings, closing at $3.71.

UWM posts record purchase originations

Source: Inman analysis of UWM regulatory filings.

UWM’s total third-quarter loan production was down 47 percent from a year ago, to $33.5 billion, driven by an 84 percent drop in refinancing volume over the same period, to $5.8 billion.

But UWM managed to grow third-quarter purchase loan production by 24 percent from the previous quarter, and by 4.5 percent from a year ago — a remarkable feat, considering that interest rates have more than doubled over that time.

“At this point, I would hope everyone realizes we consistently deliver on what we say,” Ishbia said. “We said we’d dominate the purchase market. We just had our best purchase quarter of all time, and nearly $28 billion of purchase buying. We believe the combination of brokers and the real estate partners, coupled with UWM efficiencies in technology make for a championship combination for the American consumer.”

UWM announced a “Game On” pricing initiative in June that brought its rates down by 50 to 100 basis points (0.5 to 1 percentage point) across all loan types. A new service for mortgage brokers also announced in June, Boost, provides a lead marketplace and tools that help brokers stay in touch with past clients, connect with real estate agents and opt-in to receive live call transfers. UWM also operates BeAMortgageBroker.com, a site created to encourage retail loan officers, or anyone looking to get into the mortgage business, to become mortgage brokers.

“Since the start of Game On, we’ve had thousands of loan officers try for the first time experiencing our technology, our service and quickly realizing that partnering with UWM can help them win in any market,” Ishbia said. “We said that loan officers would migrate from retail to wholesale this year and accelerate during Game On. This has happened. We estimate over 17,000 loan officers have joined the mortgage broker channel this year, and about half of them coming directly from the retail channel.”

UWM also cited “multiple new loan products” as reasons for growth, including temporary rate buydowns, standalone and piggyback HELOCs (home equity lines of credit) and expanded jumbo ARM (adjustable-rate mortgage) offerings.

Slashing rates took a toll on a key metric — total gain margin, or the profit UWM makes when it resells loans to investors. At 0.52 percent, UWM’s total gain margin has shrunk by almost half, from 0.99 percent during the second quarter and 0.94 percent a year ago.

UWM expects to originate between $19 billion and $26 billion in loans during the final quarter of the year, with gain margin falling somewhere in a range of 40 to 70 basis points.

Although UWM has been willing to grow by making less profit on many of the loans it funds, Ishbia said the company hasn’t loosened its underwriting standards.

“We’re one of those lenders that doesn’t chase volume by going low on quality,” he said. “A lot of my competitors, almost all my competitors, go down to … a 580 credit score. We don’t do that. We stay at 620. We don’t do certain things to chase volume.”

In addition to slashing rates and introducing new loan products and technology, UWM last year announced another controversial initiative aimed at growing its business.

Ishbia took to Facebook in March 2021 to announce that UWM would no longer do business with mortgage brokers who send loan applications to rivals Rocket Mortgage or Fairway Independent Mortgage, claiming that those companies have attempted to poach mortgage brokers’ clients through their direct and retail channels.

Although UWM has been criticized over its “All In” initiative — and entangled in litigation as both a defendant and a plaintiff — Ishbia defended the decision to make mortgage brokers choose between working with UWM or two of its biggest rivals.

“We told you when we launched ‘All In’ in March of 2021 that this decision would help the broker channel grow and ultimately our share of the channel,” Ishbia said. “Some questioned us and thought we would lose brokers and market share. However, the exact opposite has happened.”

Ishbia said UWM’s share of wholesale channel mortgage originations has grown to 40 percent to 50 percent, as some wholesaler lenders choose not to compete on price, or leave the business altogether.

“There were a lot of uncommitted wholesale lenders in the market and, with Game on, some of them decided to exit because of their lack of efficiency and lack of commitment to the broker community,” Ishbia said. But with more than 50 wholesale lenders still in the game he said, “the decisions we make continually force every wholesale lender competing in the wholesale channel to level up their game, which is a massive positive for every broker and consumer in America.”

Get Inman’s Extra Credit Newsletter delivered right to your inbox. A weekly roundup of all the biggest news in the world of mortgages and closings delivered every Wednesday. Click here to subscribe.

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The rise of always renters?

The rise of always renters?

Joe Weisenthal of Bloomberg opens up for us this week outlining the decline in housing affordability due to rising interest rates, which is leading to more demand for rental housing. Reportedly, in just the past 12 months, the average mortgage payment has increased by $1,000. In other terms, if you wanted to spend $2,500 on a mortgage you can now buy a house that costs $476,425, whereas in early 2021 that price tag would have been $758,572.

Apartment List released its 2022 Millennial Homeownership Report outlining how Millennials are increasingly choosing to rent. The data shows that 22% of Millennials say they will always rent. Further, “the Millennial homeownership rate still significantly lags that of older generations. For Generation X (ages 41 to 56) the homeownership rate is over 20 percentage points higher than that of Millennials at 69.1 percent.”

Millennial homeownership on the decline - Apartment List

Source: Apartment List (April 21, 2022)

Interestingly, of the Millennials who believe they will always rent, the primary reason is not lifestyle flexibility but affordability. Reportedly, 66% of Millennials say they have no down payment savings, and only 16% have saved over $10,000, with the average down payment savings for Millennials sitting at $12,773.

Affordability major cause of millennials renting - Apartment List

Source: Apartment List (April 21, 2022)

Rents keep rising, although moderating, in most metros across the U.S., according to a new rent report from Zumper. Despite overall increases, over half of U.S. cities posted month-over-month decreases in one-bedroom rents. Zumper CEO Anthemos Georgiades had this to say about the data: “The rental market has been very supply constrained for the past five quarters, but there has been a significant shift back towards equilibrium in the past quarter…Occupancy rates and the pace of rent increases are now falling in many major metros as renter demand softens and fear of recession kicks in, with many renters deciding to stay put or trade down on the most expensive options.”

Average rents - Zumper

Source: Zumper (September 2022)

Similarly, in a recent report, CoreLogic found that single-family rents across the country posted a third consecutive monthly slowdown, although nationally they are still up 12.6% year-over-year.

Seller sentiment

Seller sentiment is decreasing, with more inventory coming online and sales taking longer to complete, according to new data from Zillow. Here is the current for-sale inventory in the U.S.:

For sale inventory - Zillow

Source: Zillow (September 2022)

Home buyers continued to balk in the face of mortgage affordability obstacles this August, leaving less competition and more inventory of homes for sale in the market. The softer demand from buyers contributed to the largest monthly drop in home values, 0.3%, since 2011. Appreciation has receded since peaking in April, but typical home values are still up 14.1% from a year ago and 43.8% since August 2019, before the pandemic.”

Further, according to Sabrina Speianu from Realtor.com, there is more inventory and less competition in the market, which could be an opportunity for those with dry powder.

  • National active listings jumped by 26.9% over last year.
  • Pending sale inventory dropped by 23.7% over the last year.
  • Sellers are less active, with newly listed homes declining by 9.8% year-over-year.
  • Although the median list price grew by 13.9% in September, a price deceleration continues.
  • Time on the market increased to 50 days, up 7 days from last year.

A Zillow expert panel described the status of the market as shifting from a sellers to a buyers market, with 56% saying we will see the rise of a buyers market by next year.

“Inexpensive Midwest markets — such as Columbus, Indianapolis and Minneapolis — are the least likely to see home prices decline over the next 12 months, according to survey respondents, of which just 36% reported that home price declines from current levels were likely over the next 12 months. Fast-growing markets in the South, such as Atlanta, Nashville and Charlotte, are also expected to retain their heat by a majority of panelists, with 44% of respondents indicating declines were likely.”

Mortgage rates

As noted above, the biggest culprit for the rise in rental demand and the shift to a buyers’ market is rising interest rates. According to the St. Louis Federal Reserve Bank (FRED), the average 30-year fixed rate mortgage now sits at 6.7%.

Average 30 year fixed - FRED

Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; October 3, 2022.)

What’s also hurting consumers is not just rising rates, but the volatility of the rate market according to Lily Katz and Taylor Marr of Redfin. “Seesawing mortgage rates, which have swung from nearly 6% to below 5% to above 6% in the last three months, are causing headaches for homebuyers. The typical house hunter who started searching in July and closed the deal on their new home in September saw their potential mortgage rate fluctuate by roughly half of a percentage point every four weeks. That’s the most volatile three-month period since 1987.”

Mortgage rate volatility at its highest since 1987 - Redfin

Source: Redfin (September 2022)

As we approach 7% interest rates, George Ratiu, chief economist at Realtor.com, had this to say about the impact on the market:

“The last time mortgage rates were in 7% territory was two decades ago, in early 2002…Today’s typical household is looking at homes with a median price of $435,000, which translates into a monthly mortgage payment of $2,300. Given that the median annual income is about $71,000 and assuming a federal tax rate of 22%, today’s household is spending 44% of its income on a mortgage…With monetary policy continuing to tighten, mortgage rates are expected to continue climbing. While even two months ago rates above 7% may have seemed unthinkable, at the current pace, we can expect rates to surpass that level in the next three months.”

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Opinion: The risk in cutting FHA insurance premiums

Opinion: The risk in cutting FHA insurance premiums

There has been a flurry of recent articles prognosticating a decrease to Federal Housing Administration (FHA) insurance premiums. Several trade groups including the Mortgage Bankers Association have corresponded with the HUD Secretary in support of cuts. One news article suggested a possible presidential announcement of FHA premium reductions prior to the November elections. 

A similar announcement was made by former HUD Secretary Andrew Cuomo a week before the 2000 presidential election when FHA lowered the up-front premium and reduced the “life of loan” premium once a borrower reached 22% equity in the home.

While it is doubtful FHA premium cuts are on voter’s minds today any more than they were in 2000, administrations frequently time what they view as positive news around election cycles.

This administration is understandably looking to reduce the costs that burden so many low- to moderate-income families with FHA loans in this high inflationary and high-interest rate period. FHA capital levels appear to some to be capable of handling across-the-board cuts to either the current 1.75% up-front or 0.85% annual premiums charged to most borrowers, perhaps both. But in the current environment there is reason to be cautious.

Before reducing FHA’s expected receipts, thereby decreasing its claims paying capacity, FHA should continue to address a persistent phenomenon that is not garnering many headlines but is a lingering economic effect of the pandemic. Approximately 345,000 homeowners remain on COVID-driven forbearance plans with their mortgage servicers. At least 137,000 of those borrowers have FHA-insured loans.

Another 225,000 FHA borrowers are seriously delinquent and have not sought forbearance or loss mitigation assistance, and 156,000 borrowers who exited forbearance have now become delinquent again.

Those numbers are not outsized by FHA standards and have come way down from pandemic highs. Nevertheless, we are in uncertain economic times: Inflation grinds on, interest rates are rising, and according to many experts a national recession looms. The housing purchase and refinance market has slowed materially, and home prices are dropping in almost every major metropolitan area, although many are still above pre-COVID levels.

If things turn tougher, FHA borrowers who are still in forbearance, along with those borrowers who have been unsuccessful in completing a COVID loan modification or returned to delinquency, will need further support. So too could more recent borrowers, as we have observed an increase in FHA early payment defaults over the past year. 

What’s more, FHA servicers’ options for loan modifications are more limited when one of the principal tools, the interest rate reduction, is virtually eliminated in this rate environment, subjecting the FHA to higher costs for workouts and defaults.

We have suggested utilizing the Homeowner Assistance Funds (HAF) or FHA partial claims to temporarily buy down or subsidize interest rates on loan modifications, understanding it will require significant collaboration with mortgage servicers, HUD, Treasury, and the state housing agencies administering the program on behalf of their citizens. 

FHA’s Mutual Mortgage Insurance Fund (MMI Fund) is there to be the primary buffer against these inevitable shifts in housing and the economy. It is a cornerstone of the countercyclical role FHA plays when lending in private markets becomes constrained or, more recently, a global pandemic negatively impacts the economy and by extension leads to unexpected job losses or reduced incomes.

In fulfilling its purpose of backstopping mortgage defaults, it is important to understand the sensitivity of the MMI Fund to macroeconomic outcomes and the assumptions built into the forecasting models that have been proven to change dramatically, most notably, home price appreciation (HPA).

As FHA has highlighted in their 2021 Annual Report to Congress, the MMI capital ratio has proven to be approximately three times more sensitive to HPA reductions than to reductions in interest rates. The MMI Fund calculations are such that a modest 1% reduction in HPA reduces the capital ratio by 1.26 percentage points.  

Appreciating the correlation between changes in HPA and reported MMI Fund portfolio valuations is the key to understanding how quickly the financial performance of the MMI portfolio can change.

CoreLogic estimates that year-over-year HPA is expected to fall from the 20% reached in February to 3% in 2023. To illustrate the potential speed and size of impact on the MMI Fund, consider a similar 17% decline during the period between 2006 to 2009, highlighted in FHA’s FY2021 annual report, when HPA dropped from roughly 32% in 2007 to 15% in 2009.

In FY2007, the MMI Fund’s capital ratio stood at 7.4%. By 2008, the capital ratio had dropped to 3.2%, and by 2009 .4%. By 2012, FHA’s capital ratio had cratered into negative territory, -1.4%, requiring a $1.7 billion draw on the U.S. Treasury in 2013. 

If the decision around premiums drags past the election, soon after, FHA will release the results of its annual review of the FY2022 Mutual Mortgage Insurance Fund. To be clear, we expect the annual review, which looks back at FY2022, to show an improved capital ratio – rising above the more than 8% ratio achieved in FY2021.

Indeed, if the recent quarterly report to Congress is any indication, which showed a positive economic value in the MMI Fund of $138 billion, the pressure will only mount for a premium decrease. But the coming report will be a look in the rearview mirror, reflecting economic assumptions more optimistic than currently forecasted.

Economic assumptions are just that — assumptions — and are subject to change.

We are not calling for doom and gloom. And we want FHA to serve its mission as a stabilizing force for U.S. homeownership and helping low- to moderate-income families and individuals get into homes in a sustainable way, as efficiently as possible, to fully participate in American life, particularly in challenging economic environments.

But a number of questions should be answered before lowering premiums can be considered a serious option. Can the mortgage insurance fund support a potential recession and possible home price declines in 2023? Are the needs of prospective FHA borrowers more important than those of currently struggling homeowners with FHA loans?

And if the administration plans to make this cut, why was it not included in the president’s proposed 2023 budget and, absent that, how will they pay for it?   

We continue to believe FHA should carefully prioritize borrowers who are most in need, ensuring excess resources assist them first, helping them to preserve the equity in their homes, and preventing those at risk of losing their home from suffering that fate. 

Brian Montgomery is a founding partner of Gate House Strategies and has served as Deputy Secretary of the U.S. Department of Housing and Urban Development from 2019-2020 and FHA Commissioner to the George W. Bush, Obama and Trump Administrations. 

Keith Becker served as Deputy Assistant Secretary for Risk Management and Regulatory Affairs and FHA’s Chief Risk Officer at the U.S. Department of Housing and Urban Development.  Previously, he worked at Freddie Mac for close to 26 years, most recently as Chief Credit Officer for Single Family Housing.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the authors of this story:
Brian Montgomery at [email protected]
Keith Becker at [email protected]

To contact the editor responsible for this story:
Sarah Wheeler at [email protected]

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