Morning! This is MF Lending - the sunrise walk of mortgage newsletters. We’re the fool-proof way to serve up mortgage and real estate market knowledge without any of the guesswork. So you’ll look like the smartest agent in the room (and you are!)

Here’s what we’ve got for you today:

1. Half of Home Sellers are Making Concessions 🤯

2. Buyer Demand is on the Sidelines 🪣

3. 3 Misleading Housing Stats from NAR Report 🔎

Looking for a summary of the FED meeting yesterday 3.22? See a full summary from our FED Lunch & Learn.

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Nuwave Rates Today 📉

Half Of Home Sellers Are Making Concessions 🤯

Seller concessions are at an all-time high.

Here are some wild stats:

1. 45.5% - sales that gave concessions to buyers (up 31% from last year)

2. 25.2% - sales that included concessions and sold below list price

3. 20.6% - sales that included concessions and had a price cut while on market

If clients are on the sideline - there hasn’t been a better time to purchase a home in recent memory.

For more - see our previous discussions on Discount Points are Gold and Best Time to Buy in the Next Decade

Buyer Demand is on the Sidelines 🪣

It could take months for the interest rate hikes to finally be digested by the economy. But it is coming. We are seeing the impacts on CPI and other inflation indicators presented by the FED yesterday.

What the FED doesn’t understand is their medicine is working - but they refuse to give it time.

For the agents that may be struggling or feeling down - when this dam breaks - be ready.

This housing market is stronger than the media is leading you to believe.

Existing-home sales jumped 14.5% in February. Single-family home sales are up 15.3%. This is three times higher than estimated by market predictions.

Why?

It is now unquestionable that there is pent-up buyer demand in the market. There are thousands of potential homebuyers on the sideline waiting for two reasons:

1. Volatility and fear of the banking system

2. Affordability caused by higher interest rates

The chart below details mortgage rates since Jan 1, 2023.

Think about the headlines above. Most people who go under contract in January close in February.

Now look at where rates were throughout January - they were at or below 6.5% the entire month.

As soon as we see rates drop under this imaginary barrier of 6.5% the market is suddenly flooded with interested and motivated buyers.

Stay vigilant.

3 Misleading Housing Stats from NAR Report 🔎

Here are three stats I saw in the February National Association of Realtors (NAR) data plastered across the real estate media that are completely misleading to both realtors and potential clients.

1. Median existing-home sales price decreased 0.2% month-over-month

2. Inventory of existing homes was unchanged month-over-month

3. Construction spending and permits pulled are rising

1. Median existing-home sales price decreased 0.2%

First off, .2% is negligible. I’m not entirely sure why this is worthy of plastering across every news organization as though it is armageddon. It seems to me like this is borderline clickbait.

Second, median home price is determined by looking at a mix of homes. There are a large number of homes being sold under the 250k mark. Median means simply - it’s the middle.

As you can see in the above section - home sales rose 14.5% last month.

If I have 6 houses sold under 250k and one house sold at 750k - guess where the median price is? Under 250k…

This stat means nothing. The only way to accurately look at these figures it by looking at them in their pricing bucket below:

What does this tell us? Home prices have come down in higher price points. But again not a tremendous amount over the last year. The largest impact is in homes between 250-500k.

But prices have actually continued to rise for homes under 250k.

My point is simply this - what is the purpose of looking at the median home price? Looking at these buckets of homes is much clearer for your clients looking to buy.

2. Inventory of existing homes was unchanged month-over-month

This one is complete BS. Inventory is down.

The headline is this - “2.6 months supply ‘up 15% YOY’ (normal market 4.6)”

This number is completely misleading. It does not take into consideration homes that are already under contract - which we all know means they aren’t actually available.

Actual active listings are only 578,000 homes. That is 1.5 months of supply. Much lower than the media is leading you to believe.

3. Construction spending and permits pulled are rising

There are plenty of news pieces saying that housing construction has stayed steady, and building permits are still being pulled.

The construction spending is now being dominated by nonresidential construction - most notably multifamily.

These aren’t homes that will ever be sold to the public. They are large multifamily apartment complexes.

This construction does not help the inventory problem. We are going to continue to see inventory issues that drive prices up.

The Cul-de-Sac

Mark your GCal & Potential Impacts 📆

1. Apr 12th - March CPI Print

2. May 10th - April CPI Print - this is when we predict we see the rates start turning around

That’s all we have for today. If you like this, please leave a comment with your thoughts, subscribe & share for a special shoutout on our next Thursday edition. 🙂