Welcome!
Speakers
Tamboer – The Cromford Report
– Freddie Mac
Panel – Bell Bank Mortgage
Tina
Monica La Crue
Kasey Kier - Bell Bank Mortgage
UW
Tina Tamboer
Senior Residential Housing Analyst
The Cromford Report
Greater Phoenix Market Update – September 2024
CHANDLER
GILBERT
QUEEN CREEK
MESA
https://azmag.gov/Programs/Maps-andData/Socioeconomic-Projections
https://azmag.gov/Prop479
The Market Cycle
The Market Cycle
FEDERAL RESERVE ANNOUNCEMENT
IS THE US HEADED FOR RECESSION?
9/23/2024
9/23/2024
9/23/2024
MEDIAN HOME SALE PRICES AND RECESSIONS
DO HOME VALUES TYPICALLY DECLINE IN RECESSIONS? NO
Home values only declined in 1 recession, out of 8 recessions, in the past 50 years
RECESSION INDICATOR: BOND YIELD INVERSION
9/11/2024
BOND INVERSION
9/11/2024
9/10/2024
9/9/2024
9/10/2024
9/9/2024
9/7/2024
9/7/2024
UNEMPLOYMENT & 2Yr BONDS
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
https://www.mortgagenewsdaily.com/mortgage-rates/mnd
CAN MORTGAGE RATES COME DOWN FURTHER?
CAN MORTGAGE RATES COME DOWN FURTHER?
The cost of renting vs. buying
On average, renting a studio cost $1,460—down $14 annually. A one-bedroom rented for $1,615 (down $23), and a two-bedroom rented for $1,933 (down $12).
In July, the median price of a home was $439,950. This means that the average cost to buy a starter home comes in at $2,808 per month—factoring in monthly mortgage payments, HOA fees, taxes, and homeowners insurance averaged at metro levels.
Median-priced homes are generally not considered “starter homes”
0-2BR apartments under 1,000sqft are not comparable to a 1,900sqft single family home with 3-4 bedrooms, private parking, and a yard.
https://www.realtor.com/news/trends/renting-vs-buying-first-home-saves-over-1000-per-month/
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
https://www.realtor.com/news/trends/renting-vs-buying-firsthome-saves-over-1000-per-month/
https://azmag.gov/Programs/Maps-and-Data/Land-Use-andHousing/Housing-Data-Explorer
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
Tina Tamboer Sr. Housing Analyst
PAYMENTS ARE 13% OFF!
PRINCIPAL AND INTEREST PAYMENTS
Conventional Rates
*Does not include taxes, insurance, and PMI
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
Cromford Market Index
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
CROMFORD MARKET INDEX
Mkts
CROMFORD MARKET INDEX
Mkts
Markets
Markets
CROMFORD MARKET INDEX
APPRECIATION - Median Sales Price
Sep = 14 of 20 Closing Days
Sales measures don’t tell us where we ARE, they tell us where we’ve ALREADY BEEN. They reflect contracts written at least 4-6 weeks ago.
Sale prices are a trailing result, not a forecasting indicator.
Avg Sales $/SF – Monthly Average
measures don’t
Sales measures don’t tell us where we ARE, they tell us where we’ve ALREADY BEEN. They reflect contracts written at least 4-6 weeks ago.
Sale prices are a trailing result, not a forecasting indicator.
Sales measures don’t tell us where we ARE, they tell us where we’ve ALREADY BEEN. They reflect contracts written at least 4-6 weeks ago.
Sale prices are a trailing result, not a forecasting indicator.
CONTRACT RATIO
Contract Ratio
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
Contract Ratio
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
Contract Ratio
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
DAYS ON MARKET – AT CONTRACT
SEP to Date
DOM at contract is always lower than DOM at close due to the UCB/CCBS statuses that are still considered “active” during the escrow period despite being under contract. Therefore, they continue to accumulate days on market until they’re placed in Pending status.
Tina Tamboer
Sr. Housing Analyst
Michael Orr
Founder
DAYS ON MARKET – AT CONTRACT
DOM at contract is always lower than DOM at close due to the UCB/CCBS statuses that are still considered “active” during the escrow period despite being under contract. Therefore, they continue to accumulate days on market until they’re placed in Pending status.
LISTING SUCCESS RATE
Tina Tamboer
Sr. Housing Analyst
Michael Orr Founder
WEEKLY PRICE REDUCTIONS
CONCESSIONS
CONCESSIONS
$10,000 Sep Sep = 14 of 20 Closing Days
$8,100 Aug 2023
CONCESSIONS
$275K-$500K 62-67%
PRICE NEGOTIATIONS
Sep = 14 of 20 Closing Days Sep 2024
PRICE NEGOTIATIONS
Sep = 14 of 20
Closing Days
PRICE NEGOTIATIONS
Sep = 14 of 20 Closing Days
MARKET CONDITIONS
2023 vs August 2024 – 22 out of 22 Closing Days
www.CromfordReport.com
The Cromford Report
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Tina Tamboer Sr. Housing Analyst
Michael Orr Founder
September 24, 2024
Speaker Introduction
Monica La Crue
Affordable
Lending Manager
Mission and Community Engagement
Monica is an Affordable Lending Manager at Freddie Mac and She joined Freddie Mac in 2019 as part of the Real Estate Engagement outreach team. She works closely with industry diverse trade associations, real estate companies and local and State REALTOR® associations.
Making Home Possible for 54 Years
• Freddie Mac was chartered by Congress in 1970 and operates in the Secondary Mortgage Market
• Mission to promote liquidity, stability, affordability and equality in housing – nationwide, in all economic conditions
• Community mission
o Stabilize communities
o Prevent foreclosures
o Expand credit responsibly
o Educate future homebuyers and counsel homeowners
o Support affordable rental housing
• Three main business lines
o Single-Family (1- to 4-unit for-sale properties)
o Multifamily (5+-unit for-rent properties)
o Capital Markets
Leading the Future of Home
Insights
Insights through research studies, thought leadership, speaking opportunities, expert contributions and data to position our clients and partners for success.
Education
Events, training and financial literacy curricula to help better prepare borrowers for homeownership and to promote responsible and sustainable behaviors.
Mortgage Products
Mortgage offerings that meet borrower needs and scenarios to include: low down payments, refinances, first-time homebuyer, energy-efficient properties, factory-built housing and renovation mortgages.
Business Solutions
Services, resources, tools and technologies that enable housing professionals to serve as trusted advisors and to select the best solutions for their borrower.
Who are the Millennials?
Millennials are the most diverse adult generation
Gen Z Millennial
X Baby Boomer
Gen Z Millennial
X Baby Boomer
Millennials
are getting to life stages later than prior generations
Percentage Population Married when aged 26-41
Source: CPS Annual Social and Economic (March) Supplement 202203
Percentage of Population with Children when aged 26-41
A surge in household formation is driving today’s housing demand
2022 Year-over-Year Change in Household Formation by Generation (# in M)
Consumer Survey (ACS) 2022; Freddie Mac
Millennials are more educated than previous generations
Bachelors Degree +
Associates Degree & Some College
High school or less
Gen X Baby Boomer
Source: CPS Annual Social and Economic (March) Supplement 202203
Educational Attainment by State
% of Millennials with Bachelors Degree +
Student debt continues to be a major burden for Millennial consumers
$39K
Source: U.S. Census-Current Population Survey (CPS) 2021; FAFSA, JP Morgan, Federal Reserve, Freddie Mac
Millennials Earn More Than Prior Generations
• Along with greater college degree attainment, Millennials show higher income earnings compared to previous generations.
• Higher female wages
Median Household Income when aged 26-41 (adjusted for 2021 Dollars)
Millennial Gen X Baby Boomer
Millennials make up the largest share in the gig economy
*Digital Nomads-people who embrace a location-independent, technology-enabled lifestyle
Total 65M
Source:MBOPartnersStateofIndependenceinAmericaReport2022-MBOPartners Gig Economy Workers in 2022
Source: MBO Partners State of Independence in America Report 2022 - MBO Partners
Millennials and Finances
Nearly two thirds of Millennials live from payday to payday
Current Financial Situation
worry about having enough money to pay my bills each month
I/We have enough money to go beyond each payday (e.g., money for things I/we want, money for savings)
I/We live payday to payday, with just enough money to get by
I/We sometimes don’t have enough money for basics, like food and housing, until the next payday
*Source: Consumer Inflation Poll, June 2022 Base: All Respondents (Total: n=2,000, Gen X: n=453 ; Baby Boomers: n=441) Q. Which of the following statements best describes your household’s general financial situation. Base: All Respondents (Millennials: n=1,504)
Millennials prioritize emergencies, retirement, and their children’s education
Current Saving Priorities
Emergency fund of unexpected expenses
Retirement (e.g., 401k, IRA) A down payment on a home My child(ren)/ future child(ren)'s education A vacation or trip A major purchase (e.g., car, appliances, furniture) My education/ professional development A luxury purchase (e.g., electronics, jewelry)
Q. Thinking about saving for the future, which of the following are you currently saving for?
Millennials: n=1,504
Parents' or older relatives' living or medical expenses I am not saving for anything
60% of recent homebuyers relied on parental financial support
Consumers Who Purchased a Primary Residence in the Past Three Years
Lack of financial education is yet another impediment to homeownership
% of Millennial renters who say they haven’t had conversations with their parents about how to manage finances or budgeting
47% of potential FTHBs (ages 25-45)
perceive lack of knowledge regarding the homebuying process as a barrier
My parents have NOT talked to me about managing my finances
My parents did NOT teach me how to set a budget
My parents have NOT involved me in family financial decisions
My parents NOT have explained to me how to invest money
Millennials and Housing
Share of millennials homebuyers is below older generations, but increasing Homeownership Rate when aged 26-41
Millennial Homeownership Rate
Source: CPS Annual Social and Economic (March) Supplement 202203
Gap in homeownership across races/ethnicities continues to exist with the Millennial generation
Millennial Homeownership Rate by Race and Ethnicity
Millennial Hispanic/Latino, African American/black homeownership and AAPI rates are below those of non-Hispanic Whites’ rate of 57%.
Considering the historical variation in homeownership rates by race and ethnicity combined with higher share of Hispanic/Latino and African American/Black populations among Millennials, the result could be another factor lowering the overall Millennial homeownership rate. Source: CPS Annual
More than half of Millennials renters would like to become homeowners and will move in the next two years
Consumer Type Location & Dwelling Finances
Millennials who are renters want to buy a home and anticipate to move in two years or less… 54% Have not owned a home in the past 82%
would want to move to a different neighborhood within the same town/city 40%
26%
are currently saving for down payment on a home 56%
would use personal savings as a source for future down payment 47% will be 31-40 years old when purchase their first home 58%
would consider Single family home when move next 70%
are confident that they will be able to manage their finances well 82%
Q. Which one of these statements best reflects your views about why you are currently renting? Q. When, if at all, would you anticipate moving to a nefollowingw home or residence? Q. How would you describe your current living situation?; When you move next, which of the following would you consider Q. Thinking of your next move, to which of the following locations would you most want to move? Q. The life milestones/events are often associated with one's decision to buy a home. Which event(s) do you think would influence your decision the most when deciding to buy your next home/ in the future? Q. Thinking about saving for the future, which of the following are you currently saving for? What are your primary savings goal? (N=320) (Total=2,207)
Biggest barrier to homeownership continues to be the down payment and closing costs
Biggest barriers millennial renters face when wanting to purchase a home
Not enough money for a down payment and closing costs 55%
MYTH
~ 44% of millennials who are renters believed that a 20% down payment on a home is required, or they didn't know.
2021 FTHB Millennial Downpayment % Distribution
Not earning enough money to meet a monthly mortgage payment 49%
Not having established a credit history to qualify for a loan
Q. How likely do you think it is that you will ever purchase/own a home? (n=695) Q. If you ever purchase a home, how old do you think you will be when you purchase your first home? Q. The following life milestones/events are often associated with one's decision to buy a home. Which event(s) do you think would influence your decision the most when deciding to buy your next home/ a home in the future? Q. If you were considering buying a home/a different home today, please indicate if you think the following would be a major obstacle, minor obstacle or no obstacle for you. Q.To the best of your knowledge, what is the percentage of a home’s sale price lenders require borrowers to pay as a down payment for a typical mortgage today? (Renter, n=695)
Source: American Housing Survey (AHS) 2019; Q1 2023 Freddie Mac Rising Generation Survey
Multiple down payment sources are becoming an imperative as the amount needed for a down payment rises with home prices Expected Source(s) of Down Payment
Median Down Payment on a Home ($ amount)
2020 Q1 2023 Q3
Down payment assistance programs are available to consumers and have a positive impact when they are used
# OF DPA PROGRAMS
Worry other people might see them in a negative way for using homebuying assistance
AMONG THOSE WHO USED FINANCIAL ASSISTANCE
Communications and Marketing
Say recommendation from loan officers or real estate professionals influenced their decision Would not have been able to purchase their home without financial assistance or it would have been difficult
SIZE OF ASSISTANCE
Less than $3,000
Incorrectly believe you cannot get down payment assistance if you’ve owned a home before
Base: All Participants (n=448) Do you agree or disagree with the statement “I worry that other people might see me in a negative way or judge me for using home buying assistance or loans from a nonprofit or government agency” Q. Do you believe the following statement is true or false?” You can't get down payment assistance if you've owned a home before.
Base: Financial Assistance Users (n=342) Q. How much of an impact did home-buying financial assistance or loans from nonprofit or government agencies have on your ability to purchase your home?; Q. Which of the following sources did you use to get information about home-buying financial assistance programs or loans from nonprofit or government agencies Q. What percent of your down payment and closing costs for your current home came from the following sources?; Q. What was the approximate size of the home buying financial assistance or loans from nonprofit or government agencies you received?
Source: Down Payment Resource as of April 7, 2023 *KY: small base size in the Housing Financial Assistance Survey
Higher share of millennial mortgages were originated in more affordability regions
Share of Mortgages Issued to Millennial Buyers by State (2021)
Top 20 Millennial MSAs (Count of mortgages issued to Millennials)
Affordable Lending Solutions
Low Down Payment Solutions
Home Possible®
• First-time buyers and other buyers who qualify based on area median income in the home’s location
• Down payment as low as 3%
• Flexible down payment and closing cost funding options
• Co-borrower who is not part of the household allowed
• Private mortgage insurance stops at 80% LTV
HomeOne®
• First-time buyers – no income restriction
• All borrowers must occupy
• Fixed-rate terms only
HFAAdvantage®
• Based on Home Possible underwriting requirements
• 1-4 unit primary residences; all borrowers must occupy
• State/Local HFA’s down payment assistance and guidelines
• Minimum MI coverage required
Home Possible® Income & Property Eligibility Tool
Use this tool to verify if a borrower can qualify for a Home Possible mortgage based on the property location and the borrowers' qualifying income.
SF.FreddieMac.com/working-with-us/affordable-lending/home-possible-eligibility-map
Allows you to check for available down payment assistance on the DPA One® website.
Provides Home Possible income limits based on property location.
Addressing Today’s Housing Challenges Expanding Affordable Lending
CHOICERenovation®
CHOICEReno eXPress® Manufactured Housing Shared Equity Homeownership
Financing for renovations and repairs including home resiliency
Financing for factory-built HUD Code homes affixed to permanent foundations and titled as real property
Financing for homes with lasting affordability administered by notfor-profits or state/local governments
Resources
Freddie Mac CreditSmart®
Empower
your clients through education
CreditSmart is a suite of free financial capability and homeownership education resources designed to empower consumers with the skills and knowledge to support them through every stage of their homeownership journey.
Every person has a unique homeownership journey which is why CreditSmart offers different paths to education and financial wellness.
CreditSmart® Essentials*
CreditSmart® Multilingual
CreditSmart® Coach
*Available in English and Spanish
CreditSmart® Military
CreditSmart® Homebuyer U*
Finding the Right Match
Freddie Mac developed DPA One® as a free, online tool to host down payment assistance programs and ease the matching efforts for housing professionals.
Easily enter, manage and track DPA programs
Strengthen your role as a trusted advisor with your one-stop access to:
• Industry Insights
• Enhanced Business Growth Strategies and Tools
• Resources to Share with Clients
• Connections to Expand Professional Networks
• Latest News, Market Insights and Updates
Thank You
Kasey Kier National Community Development Manager
Bell Programs Overview
Loan Products
• Standard Conventional
• Government (FHA, USDA, VA)
• Construction, Rehab and Lot loans
• Lake and vacation homes
• HELOCs
• Portfolio Loans
• Doctor and Dentist Loans
• Refinances
• And More!
Affordable and First-time homebuyer
• Freddie Mac Home Possible/Fannie Mae HomeReady
• BorrowWise & BorrowSmart Grant
• HFA/Bond Programs
• Bell Moving Forward 140
• Bell Moving Forward +
• Bell Moving Forward DPA
• Bell Moving Forward Advantage
• Bell HomeAssist
• Local DPA Programs
HomeReady® & Home Possible®
• No LLPAs
• ≤80% AMI
• $2,500 grants for borrowers at or below 50% AMI
BorrowWise & BorrowSmart®
BorrowWise
• At or below 50% AMI
• HomeReady® or Home Possible® first mortgage with $2,500 grant
• First-time & repeat buyers
• 1-2 Unit owner-occupied residences
• Homebuyer Education required if all borrowers are first-time buyers.
BorrowSmart®
• Between 50.01-80% AMI
• Home Possible® first mortgage with $1,250 grant
• First-time & repeat buyers
• 1-4 owner-occupied residences
• HPF/Greenpath Homebuyer Education required for at least one borrower. Free!
Housing Finance Agencies/Bond
• Offered through State or county agency
• First and second (DPA) mortgages
• Have their own rates
• Exclusive Fannie and Freddie Products
• Reduced MI at or below 80% AMI
Family of BMF Programs
NEW! BMF 140
Home Possible first mortgage with income limits at 140% AMI for borrowers who live in or move to eligible census tracts
Home Ready first mortgage with $6,000 grant for borrowers who currently live in eligible census tracts
BMF DPA LOAN
A second mortgage with monthly payment, same interest rate as first mortgage, 20 year term
BMF ADVANTAGE
First Mortgage Program for minority borrowers
*Available for borrowers identifying as a minority as defined by regulatory designations listed on the initial loan application.
New! Bell Moving Forward 140
97% LTV Home Possible first mortgage with 140% AMI income limit
BMF 140 Home Possible first mortgage with income limits at 140% AMI for borrowers who live in or move to eligible census tracts
At least one borrower must currently live in a census tract that is 50% or more minority OR purchase a property in a census tract that is 50% or more minority
Available in AZ, FL, KS, MN, MO, ND, NM, TN, WI
$1,000 grant
Eligible properties include 1 & 2-unit SF, 1-unit PUD, 1-unit condo, and multi-width manufactured housing
Reduced MI Coverage
Exclusive to Bell Bank!
Home Possible first mortgage with income limits at 140% AMI for borrowers who live in or move to eligible census tracts
Bell Moving Forward Plus
BMF +
Home Ready first mortgage with $6,000 grant for borrowers who currently live in eligible census tracts
HomeReady first mortgage with a $6,000 grant and a $500 appraisal reimbursement
At least one borrower must be a first-time buyer AND currently live in an eligible census tract
NO income limits
Available for properties in eligible census tracts in these areas:
• Phoenix Metro Area
• Miami/Ft. Lauderdale Metro Area
• Memphis Metro Area
• Orlando Metro Area
• Tampa Metro Area
• St. Louis Metro Area
Bell Moving Forward Down Payment Loan
Loan Amount – up to 2% of the purchase price
20 year term, same rate as first mortgage
BMF DPA LOAN
A second mortgage with monthly payment, same interest rate as first mortgage, 20 year term
Monthly Repayment
Paired with:
• HomeReady® & Home Possible®
• BorrowWise (HomeReady® & Home Possible®)
• Borrow Smart (Home Possible®)
• Bell Moving Forward Advantage
• Bell Moving Forward 140 (Home Possible®)
$200 processing fee + recording fees
Bell Moving Forward Advantage
BMF ADVANTAGE
First mortgage program for minority borrowers
First mortgage available to minority borrowers only
Exclusive to Bell Bank!
Lender Paid Mortgage Insurance
Provides up to 99% financing when paired with the Bell Down Payment Loan
Provides flexibilities for borrowers with limited credit or no credit scores
140% AMI Income Limits in AZ
*Available for borrowers identifying as a minority as defined by regulatory designations listed on the initial loan application.
Bell HomeAssist
• Requires AUS Approval
• Owner occupied primary residence
• No LLPAs qualifying income at or below 100% AMI and ONE of the following:
• First-time homebuyer (at least one borrower)
• Property in a high needs rural tract
• Manufactured home
• Fannie Homebuyer Ed: HomeView
• Freddie Homebuyer Ed: CreditSmart
Freddie HomeOne®/Fannie97
• First-time buyers
• NO income limit
• Has LLPAs
• Min 97% LTV
• At least one buyer must take homebuyer ed:
• Fannie Mae – HomeView
• Freddie Mac - CreditSmart
Down Payment Loans & Grants
• BorrowWise
• BorrowSmart
• Housing Finance Agency
• AZ is Home
• AZ HomePlus
• Home in 5 Advantage
• Home in 5 Platinum
• Bell Moving Forward Grants
• Bell Moving Forward DPA loan
• Other Local DPAs
Bell Bank Mortgage UW Team
Amy Glatte | VP Mortgage UW
Barb Lahaie | UW Manager
D.J. David | Government UW
Mike O’Neil | Mortgage UW
Dana Flores | Mortgage UW
Kandra Marlin | Mortgage UW
Julie Bernal
Readynest
Readynest - Spanish
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