Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.

The Latest Real Estate and Housing “Trends”
By Shmuel Shayowitz

This week Fox News with Shepard Smith interviewed Diana Olick, CNBC’s top real estate correspondent, about some of the latest news items she sees in the marketplace. The part I thought was most interesting was her reference to recent search trends on Google that have been gaining attention. I did a little more research and was quite intrigued by some of the recent searches that have been ‘blowing up’ on Google. Indeed I believe that we are turning a corner from the status quo in real estate as we move away from Covid lockdowns and Governmental bailouts and are forced to deal with their aftermath. Here are a few of the biggest trends:

How To Get Ready To Buy A House?
This search recently reached its highest level on Google in over a year. This trend is something I have seen myself lately, as the number of inquiries from both aspiring home buyers and potential home sellers has rapidly increased. Remarkably, the initial questions that I have been fielding on these calls are very different than what I have experienced in all my years. Potential home buyers understand the current market landscape very well. They feel the squeeze of the lack of inventory and a swarm of competitors vying to purchase the same home. The conversations we are now having relate to how to distinguish their offer amongst other bids. In this market, it’s crucial to highlight the strengths and unique advantages that you have over other competing bids to set yourself apart. On one recent open house with over twenty offers, my client was fortunate enough to have his offer accepted, even though there were two higher prices. In the end, his “total offer” was more appealing after my assistance in tandem with his Realtor.

When Will The Federal Reserve Raise Rates?
According to Google, after spiking to new highs in May, this query is on the rise again. With a surge of more than 450% in the past week, this is certainly a topic on everyone’s mind. In fact, the Federal Reserve met this past week in the most anticipated meeting since March 2020, when the Covid-19 pandemic became rampant. Although Fed officials left interest rates near zero, as expected, they sharply raised inflation expectations to 3.4%, an entire percentage point higher than the March projection. Even with the increased forecast for this year, the committee still says that inflation pressures are ‘transitory’ and pledged to keep buying billions worth of bonds each month. Fed officials indicated that they’re now planning to scale down the easy-money policies much sooner than expected. The Federal Open Market Committee (FOMC) is now penciling in at least two rate hikes for 2023 as inflation surges and growth accelerates. Mortgage rates spiked on the news, and the 10yr U.S. Treasury leaped almost 10 basis points in reaction to the inflation fears.

“How To Buy A House Without Selling Yours?”
At least once a day, I am asked by a current homeowner, a Realtor, or an Attorney if it’s possible to buy without selling an existing home. Indeed, this search term spiked 160% in early June. For every ten inquiries on the topic, I have at least eighteen responses. Yes, there numerous answers and suggestions that I often provide to this one complicated question. From temporary bridge loans, to perfectly timing a simultaneous purchase, to subordinating loans until the proceeds of a sale come through, to qualifying someone with multiple mortgages – there are a myriad of options one can explore. Of course, it takes an experienced mortgage banker with creativity and meticulousness to make it happen. As a seller, having a conversation about financing was often not considered until their home was pending-sale. With how the market is now, it is more critical than ever to get a comprehensive consultation on the matter even before a home is listed for sale. Many opportunities are lost once a home is listed, even if not published in the M.L.S.

Can I use My 401K To Buy A house?
Not surprisingly, the search for this question has doubled in the past month, according to the analysis. Bidding wars are forcing home buyers to look for every penny needed for a downpayment. Many are paying well above the asking price to get their offer accepted. I spend a lot of time with my clients researching terms of their 401K, including penalties, interest charges, and repayment terms. This is certainly not a one-size-fits-all solution. In one instance, I suggested to a client that she put down less than twenty percent, despite incurring a fee for Private Mortgage Insurance (“PMI”), and that she repay her 401K loan instead. This strategy saved her over $300 “net” per month. I was the only person to suggest this to her, making all the difference in the world for her. We previously discussed how current homeowners are looking for creative ways to finance new home purchases, and undoubtedly using a 401K is being considered. Again, for many, this should only be done after carefully exploring all available options.

When Will The Housing Market Slow Down?
The fact that this search has “only” doubled over the past few weeks is surprising. It’s a question on everyone’s mind. Along these lines, Why Are Houses So Expensive Right Now? Has seen a 300% increase of late, even though, by now, everyone knows about historically low mortgage rates, coupled with low inventory and pent-up demand for new homes. What Are Home Values Near Me? has increased 5,000% in the past 90 days. For sellers and buyers, trying to time the market is proving to be a daunting task. You won’t know when it’s over until it’s over. Before the housing market crashed in 2008, a friend of mine asked me when I thought the housing market would slow down because he was looking to upgrade his home and buy something larger for his growing family. I told him my thoughts on the market, and within 30 days, he listed and sold his two-bedroom condo at top dollar. He moved in with his parents for a brief time and was able to buy the home of his dreams for over two hundred thousand dollars less than it was on the market for at the time. Timing is everything, as they say.

Some other noteworthy real estate headlines include, “Homebuilder sentiment drops to 10-month low, as construction costs drive prices higher,” “Rents for single-family homes just saw the largest gains in nearly 15 years,” and “Homeowners get $2 trillion richer in red-hot housing market” – just to name a few. I mention these trends and headlines to emphasize that we are starting to see a change in the market. I implore everyone to be mindful and seek counsel from experts in every field when evaluating significant financial considerations.

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