Speaker 1: 0:00

The following program. The ENT , mortgage and Realty Show is paid for in full by ENT mortgage, LLC and equal housing lender consumer access.org number 2 5 5 3 6 8. The advice and opinions expressed during the Academic Mortgage and Realty Show are solely that at the hosts and guests of ENT mortgage, LLC, and not WTMJ or Good Karma Brands.

Speaker 2: 0:21

Welcome to the Accu Net Mortgage and Realty Show, getting you inside information on buying, selling, and financing your home with expert advice from Accu Mortgage and Realty. And now, here's Brian Wicker and Tim Holdman .

Speaker 1: 0:37

Welcome to the ANet Mortgage and Realty Show. I'm Brian Wicker, licensed real estate broker with ANet Realty Advisors, and also the majority owner of ANet Mortgage, where my individual NMLS ID number is 2 5 9 6 1 0. I'm here today along with my son-in-law , uh, Tim Holdman, whose individual NMLS ID number is 1 5 9 3 1 4 6. Tim is one of our rockstar senior loan consultants. Oh , thanks Brian. Yeah , you bet . You can also grab a podcast at today's show and any of our past shows wherever you normally get your podcasts. So , Tim, it was an eventful week in mortgage lending because we got some key economic reports, most importantly on inflation. We got the consumer price index inflation report for January on Wednesday, and unfortunately that made rates go up. Yeah . About one eighth of 1%. Mm-hmm <affirmative> . Which hold onto your hat, that's about a $21 payment difference on a $250,000.

Speaker 3: 1:28

Oh my goodness. Okay. Yeah .

Speaker 1: 1:29

But still it went the wrong way. Stocks also didn't like it. And that's because as measured, that's inflation at the consumer level came in hotter than expected. Uh , if you strip out food and energy, the annual inflation number was 3.3% and the market was expecting 3.1. Right. So that's like, oh my God, inflation's back. And remember, inflation's the enemy of interest rates, especially long-term interest rates. 'cause if you're lending mortgage money at seven and inflation's running at three Right. You're only making the difference, which is 4%.

Speaker 3: 2:00

Yeah. And that's, I think that's a disconnect people have when they consider mortgage rates compared to the rate that the Fed controls. Right. Right . 'cause the , the Fed , uh, either staying on their hands or choosing to drop the rate that they can control, that's an extremely short term interest rate overnight. Right. Overnight, literally the shortest you can get, which is, you know, the complete opposite of say, a 30 year fixed mortgage rate. Right.

Speaker 1: 2:23

Correct. Which could last for three decades. Yeah. Um, so also just by coincidence, federal Reserve shared , Jerome Powell gave us testimony before Congress, which he does twice a year, and said, Hey, don't expect us to be cutting rates anytime soon, because, you know, inflation's still stubborn stick and sticking around . We wanna get that to come down to 2%. And , uh, and then also the job market's looking pretty good, so we don't really have any reason to cut short term rates. Right. But then something really weird happened on Thursday. We got the measurement of inflation at the wholesale level called the PPI Producer Price Index. Okay. That too was higher than expected. So I was fully expecting things to get even

Speaker 3: 3:03

Yeah . Rates to get worse. Yeah . Worse .

Speaker 1: 3:04

But instead, analysts dug into the details. And there is some details within that PPI report that foreshadow what the inflation measurement is gonna be , uh, using the fed's actual preferred method, which is the PCE or per the personal consumptions expenditures index that comes out on February 28th

Speaker 3: 3:25

End of the month. Yeah. And

Speaker 1: 3:26

So by looking deep inside that report, they said, you know what we think when the Fed gets their report that they like, it's gonna show inflation coming down. So mortgage rates came back down. Sure . And then , uh, what happened on Friday?

Speaker 3: 3:36

Yeah. So then on Friday we actually got a another little nice bounce back on rates , uh, due to consumer spending. So consumer spending actually came back a little bit , uh, lighter than was anticipated, which means people are choosing not to spend as much of their money as maybe was forecasted. Uh, so that caused mortgage rates to , um, improve a little bit on Friday. So ironically, between the bounce back on Thursday and Friday, it , it almost completely canceled out the rate worsening that happened on Wednesday. So for the week, we're kind of flat.

Speaker 1: 4:10

We're kind of flat or maybe a touch better. Yeah. Uh , low overhead ACU net , uh, finished the week being able to offer a 6.8 7 5 30 year fixed rate with no points. That's on a $250,000 loan to buy an owner occupied single family detached her condo with 25% down and all the other Right. Stuff. The A PR would be 6.89. Uh , you could get 6.375. Yeah.

Speaker 3: 4:32

If you want to buy down the rate with points

Speaker 1: 4:34

That would be costing you $5,000 in points at closing, making the a PR 6.58 over the entire 30 year life of the loan payment difference, by the way, between 6 8, 7, 5, and 6 3, 7 5 is 83 bucks . 83 bucks , spend five grand extra to save $83. Right .

Speaker 3: 4:52

So you'd make your money back in five years on that investment, by the way. Right. Right . 'cause if you're spending five grand at closing, that money is spent, it's gone. And then you save it back one month at a time in the form of $83 a month in payment savings . So five grand divided by 83 gets a break even , which is 60 months, five years. So if you're

Speaker 1: 5:08

Thinking that there's a good chance that rates could come down all by themselves mm-hmm . Over the next five years, you wouldn't pay to get that now. Right . You'd wait. Right .

Speaker 3: 5:16

Unless, unless you just really want that low rate . Yeah .

Speaker 1: 5:18

<laugh>. Yep . It's certain. And , uh, you know, remember you have to qualify again to refi so it's not an automatic slam dunk. Right. Uh , the other data point, our special Wisconsin first time home buyer rate , uh, that's for folks who have household income up to 117,400. If there are dollars a year, if there are three or more household members, that's all the way down at 6%. Yeah. That's amazing. Uh, the a PR if you put 20% down would be 6.02. Yeah . That payment difference on a $250,000 loan versus 6.875 is 143 bucks.

Speaker 3: 5:51

Yeah. That's real money. Yeah.

Speaker 1: 5:53

So if you can, if we can get you to qualify for that program, that's definitely the way to go. Um , okay. So, so rates are decent. Um, Tim, another thing on Thursday, I was on the WBBM , uh, news Radio Noon Business Hour Oh , nice . Down in Chicago. Yeah. And I was asked this question by their host, who's a former WTMJ guy. Oh , Hart . All right . Uh , he said, so, you know, Brian, if somebody's out there, you know, thinking about getting into the market this spring, should they wait for rates to come down? <laugh>, let's give our answers. Uh, when we come back from this break, you're listening to the Academic Mortgage and Realty Show on AM six 20 WTMJ

Speaker 2: 6:33

Home buying advice from the guys who know it best. This is the ACU Net Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1: 6:42

Welcome back, and thanks again for tuning in to this week's show. Tim, we were talking about how rates ended the week favorably when in the middle of the week it didn't look so good, but by the end of the week, it was looking better than ever. Uh , or at least better than than where it was. So , um, I , as I mentioned, I was on WBS noon business hour , uh, in Chicago on Thursday. And Rob Hart, former WTMJ on her personality asked, so Brian, if somebody is thinking about getting out there in the market, should they wait for rates to come down? <laugh> , what would be your answer?

Speaker 3: 7:13

Uh , my answer would be an emphatic no <laugh> .

Speaker 1: 7:15

Why is that, Tim? Because that was also my answer, by the

Speaker 3: 7:18

Way. Yeah, well, it's, is the juice worth the squeeze, as I like to say? Right. So it's like, let's say you wait, first of all, how low do you want them to go? Ironically, most people don't have a specific answer to that question. They just, I want 'em to be lower. Yeah, it's okay . Okay. If rates are at 6.875 for no points, which is what we said in the first segment, what do you want to get 'em to? Six and a quarter? Six, five and a half . We've already flushed out the impact in the monthly payment for that rate difference. And typically, while it's not nothing, it's not worth it to wait. Right. Because in the meantime, more people are gonna join the market as we get into spring and summer, there's gonna be more competition, and then therefore you'll probably have to pay more for the same house, which that means either more money down or a higher loan amount, both , which would offset the lower interest rates if we even get them. Yeah . Which, you know, all signs are pointing to, at least for the remainder of this year. We're not gonna get , not gonna get some windfall of rates dropping magically. I mean, it would be nice, but ,

Speaker 1: 8:19

So you and I are singing out the same page of the hymnal. Yeah. Uh , I , I mentioned that, hey, the latest kind of best case forecast from the Mortgage Bankers Association and Fannie Mae is that hey, maybe rates are gonna get down to six and a half on a 30 year by the end of the year.

Speaker 3: 8:32

Oh , hot diggity. Yeah . <laugh> .

Speaker 1: 8:33

Right. And , and so, you know, if that were to come to pass, that is a 62 60 $2 per month payment difference on a $250,000 loan. Yeah . It's , but then as you point out, if, if the payment, or I'm sorry, if the house price goes up by 5% mm-hmm <affirmative> . You know, and you're waiting, it defeats that. Yeah.

Speaker 3: 8:51

Cancels it

Speaker 1: 8:52

Out. And actually , and more than that, it makes it 25 bucks a month higher. Right. So, so we we have the same answer. Yeah.

Speaker 3: 8:58

And this is a a com very common question Right. That I get with a lot of people who are calling in and inquiring. It's like, oh , should I wait or should I act now? And it's like, well, if you wait a year, right? I mean, generally home values are just gonna keep on going up. So it's like

Speaker 1: 9:17

That's a losing. Yeah . You know , nobody's expecting anymore that 30 of your fixed rates are coming down to five and a half . No,

Speaker 3: 9:23

You know , nine ,

Speaker 1: 9:23

The current expectation is six and a half . So, alright , so you were telling me , uh, on the break, you talked to some , uh, is it a first time home buyer this

Speaker 3: 9:31

Week? No. Re repeat . Repeat. Okay . Home buyer , uh, rega . Yeah. So they, they own a home and again, looking to move not at all for mortgage rate reasons, right. They wanted to get into a different school district , uh, because their kids are reaching the age where they're gonna be changing schools so they, you know, they don't have to move immediately, but they're doing the right thing where they're kind of planning for their future a little bit and kind of planning for where they wanna be for the next 10 to 15 plus years. Right. Um, so they're looking in a very specific area. And they had actually already gotten pre-approved with , uh, a different lender, a

Speaker 1: 10:07

Credit union, I think you said a large credit

Speaker 3: 10:09

Union. A large credit union. And, you know, the, the funny thing is about that is that if they can get pre-approved there, they can generally get pre-approved anywhere. Sure. Right. Uh , not a lot of customers know this is that mortgage lenders generally have to play by the same set of rules. That's right. In determining who they can pre-approve and qualify for a mortgage. Not to say that there isn't some art to that. 'cause there, there certainly is, and we're , we're experts at that. But generally, and I told 'em this, I was like, listen, that's great that you're pre-approved. I can absolutely give you that pre-approval letter from Kinon as well. But what are the other things that matter to you in ultimately deciding who you're gonna partner up with for your home buying journey? Right. Because this is a , this is a journey. This is not a Yeah . A simple , uh, you know, nuts and bolts transaction. And he said, oh, well I really want to talk about , uh, you know, your, your pulse Tim on kind of this new world with real estate agents, you know, where and pertaining to their commission Yeah. How they're gonna earn that. So we talked about that for a long time. And he said, and you know, I really wanna get connected with a very experienced buyer's agent.

Speaker 1: 11:14

I like the way he's thinking.

Speaker 3: 11:15

And he even used the word buyer's agent . So I said, kudos to you for even knowing the difference. Yeah .

Speaker 1: 11:20

Go .

Speaker 3: 11:20

Right . Uh , so I could tell he'd done a little cursory research of his own and he said, yeah, you know, I want someone who's gonna be experienced in the area that I'm looking to buy that can help me get into the winner circle. 'cause he is , you know, he's looking in a very condensed, narrow right . Geographical area so that the competition's gonna be tight, there's not gonna be a lot of inventory. And when a house does come on the market that they wanna buy, they want to get that house.

Speaker 1: 11:43

That's right. And remember, you know, that that's where that local knowledge Yeah . Comes in really handy because the listing price is just a made up number, right, right . That the seller and the listing broker came up with. So that experienced buyer's agent is gonna help you understand, is that a low number? Are they asking a really high number? Yeah.

Speaker 3: 11:59

What's it gonna take to win? Yeah .

Speaker 1: 12:01

Yeah. What is it gonna take to win this offer? And that's where your expertise comes into Yeah . As well by showing, well, hey, you know, if you have to pay more than even what it appraises for, for, let me show you what that means in dollars and cents. Right . Where I don't think you're gonna get that from a typical bank or credit union.

Speaker 3: 12:18

No. And, and when we come back, I can put a bow on this story, but I, I'm gonna tell how I actually provided this customer with some resources that he did not get from that local credit union , uh, to just make him, frankly a lot more comfortable and confident, you know, as he's beginning his home search here.

Speaker 1: 12:33

Alright. We'll cover that when we come back and more, you're listening to the Aced Mortgage and Realty Show on Wisconsin's radio station. AM six 20 WTMJ,

Speaker 2: 12:42

Getting you into the home of your dreams. Here's more of the Accu Net Mortgage and Realty Show with Brian Wicker on wg mj

Speaker 3: 12:50

Welcome back to the Acuate Mortgage and Realty Show. I am Tim Senior Loan consultant joined by majority owner and chairman Brian Wicker. Uh, Brian, before the break , um, we were starting to discuss a customer, I had just started talking to this last week who , um, was choosing, you know, trying to go through the process of choosing what lender , uh, to work with. And through that conversation it actually sort of pivoted to how do I find a good buyer'ss agent Right. Uh , to work with, which is extremely important, especially in this really competitive housing market that we're in. Or at least the area that he's gonna be shopping is gonna be very competitive. Right. Yeah .

Speaker 1: 13:28

By the way, we've got some information on January home sales coming up later in the show. Oh , okay. That'll reinforce that idea. Good,

Speaker 3: 13:33

Good teaser.

Speaker 1: 13:34

So what did you do to help him find a , uh, buyer's

Speaker 3: 13:36

Agent? Yeah, so , uh, I have access and ANet has access to a resource where we can look up the number of transactions a realtor has done, either on buyer side or seller side. It , it differentiates the two and then we can , uh, narrow down that search even by zip code. Sure . Right . So I found the zip codes in the areas where , uh, this gentleman is looking to buy is the next to him . And I looked up the data on what top three agents had done the most buyer side transactions in the last, I just did the last 12 months. Sure. Okay. And I said, alright , here are the names. I said, I want to give you several options because aside from experience, I think there's certainly a personal fit , uh, component to it as well. And I said, you wanna get hooked up with someone who knows what they're doing. Right . AKA has a lot of reps under their belt also helpful that they've done transactions in the specific area that you're looking to buy. Yeah . Yeah . You know ,

Speaker 1: 14:32

And price range.

Speaker 3: 14:33

Yeah. And , and just that level of consultation was miles above what age received from this credit union, and he recognized the value and importance to that. Sure. Along with all the other things that matter, low rate, low closing costs , obviously, things like that. But, and

Speaker 1: 14:49

How did he find out about us ?

Speaker 3: 14:50

Tim ? Uh, he's a, a loyal radio

Speaker 1: 14:52

Listener, in fact . Ah , okay. So we , so we , something tickled him that said, you know what, yeah, I went to my bank or credit union of this case and got pre-approved, but maybe there's something better

Speaker 3: 14:59

Out there. Maybe there something better. Yeah. And you know,

Speaker 1: 15:01

You need every advantage you can get when you're a buyer in today's market.

Speaker 3: 15:03

Well, exactly. And you know, we've, we're now at the point where we have him pre-approved through ANet . He has the list of realtors. He is gonna start that , uh, those phone calls and those conversations. Does

Speaker 1: 15:13

He have to sell his existing home to qualify?

Speaker 3: 15:15

No, he does not. In fact, we , uh, both in real life, he, they want to probably buy and move , uh, or sell their current home after the fact. Okay . So they can do a slower move, maybe do some, you know , uh, cosmetic improvements to the new home, you know , right away before they move in type of thing. But, you know, also on the financial side, it's certainly a benefit to do that anyways because then you can , uh, be pre-approved and make an offer not contingent on the sale of your current home.

Speaker 1: 15:43

Well , which is almost a certain kiss of death.

Speaker 3: 15:45

Right. Sellers want to know that if you own a home currently, you don't need to sell it as part of successfully buying the new home. So that game plan is in place. We've already talked about after the fact how they'll probably do a recast of the mortgage after they get

Speaker 1: 16:00

The Oh . And that's , they'll pay down the principal balance and without refinancing may maybe we'll be able to refinance 'em if rates are lower.

Speaker 3: 16:06

If rates are lower, maybe we'll refine to a 15 year fix to accelerate, you know, how fast he pays off the new mortgage. But in , in any case , uh, he expressed a lot of appreciation to kind of diving into the details a little bit more. It's comprehensive. Yeah.

Speaker 1: 16:21

Because comprehensive consulting,

Speaker 3: 16:22

Right. Aside from the nuts and bolts of the mortgage, which I equate almost to a car, right? Sure. If you're buying the same make model year of car, you know, where can you get it for the cheaper price? Well, right. But, but the other stuff matters just as much, if not more in my opinion, which is the expertise, the experience, the attention to detail are , are

Speaker 1: 16:40

They gonna have more than 10% down? Yeah .

Speaker 3: 16:42

They're gonna do be able to do 20% down Wow . Through assets that they have .

Speaker 1: 16:45

So I'm sure you already talked about this, but you know, as they get homes in their sites, you'll be able to put that through Fannie Mae and Freddie Mac , automated underwriting software to see if we get those magic words Yeah . No appraisal required. Right.

Speaker 3: 16:56

Which will also strengthen the offer. Oh my god. Even more . Right. You know, making a strong offer at a good asking price, no appraisal required, you know, fast financing, contingency, deadline, all those things are gonna put him definitely in a competitive position. Now, it's not gonna be a guarantee that they, you know , uh, hit a home run on the first at bat, but it's , it's gonna definitely increase their chances. We'll

Speaker 1: 17:18

Do everything we can to work with their buyer's agent to help get 'em in the Yeah . In the winner circles.

Speaker 3: 17:23

It's a collaboration. Right? Absolutely. It's like once they pick an experienced buyer's agent, it's a team effort between me and that agent and the customer , uh, to all be rowing the boat in the same direction, so to speak.

Speaker 1: 17:34

So, absolutely. A hundred percent. So , um, after we come back from this , uh, bottom of the hour news break , um, I've got the January , uh, home sale and , uh, also listing numbers good for , uh, five counties , uh, Southeastern Wisconsin, Metro Milwaukee area, which I'm gonna point out for not the first time is a lot different than the , uh, national numbers that people may have been reading about. We'll cover that right after we come back. Uh , right now it's time to turn it over to the WTMJ Breaking News Center.

Speaker 2: 18:07

Don't break the bank to get into a house. Back to the ACU Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1: 18:14

Welcome back and thanks again for tuning in. I'm Brian Wicker, a majority owner of ACU Mortgage and also licensed real estate broker with ACU Net Realty Advisors, along with my son-in-law, Tim Holdman today one of our senior loan consultants at Could at Mortgage. Tim, I've got the home sale numbers for the five county metro Milwaukee area. Alright . Uh , according to data from the multiple listing service, which turns out is copyrighted data from the financial business systems who must own the metro MLS. And uh , so my first question for you, Tim, is do you think home sales were up or down in January of 2025 versus January, 2024?

Speaker 3: 18:48

I'm gonna go up.

Speaker 1: 18:49

You are correct, sir. There were 103 more single family detached in condos that sold in January compared to a year earlier. So the total number of sales last month was 935 on a percentage basis. That's up 12.4%.

Speaker 3: 19:05

It's not too shabby.

Speaker 1: 19:06

Not too shabby. Yeah . And is in stark contrast to a national report that I saw published, I think it was on Thursday from real estate brokerage firm. Redfin, they said that nationwide existing home sales were only up 0.1%.

Speaker 3: 19:21

Yeah . Which doesn't matter at all to our listeners. Right. Because I mean, they're not buying nationally. Nobody is. So it's Yep . This data that we're gonna dive into is way more relevant and important. I , I think to everybody.

Speaker 1: 19:35

Yeah . By the way, 24% of the sales last month were recorded as cash offers. Wow. In MLS that's up from 22%, I think it was in , uh, December. By the way, cash buyers on average paid 99.1% of the listing price. So not much of a discount. No. Uh, if you got a a conventional mortgage you paid , but

Speaker 3: 19:53

They got the house. They got

Speaker 1: 19:54

The house <laugh> . Yeah. Uh , if you got a conventional mortgage , uh, those buyers typically paid 98.8. So I mean, virtually the same number Yeah . Of the listing price. Uh , the median sales price , uh, was 38 grand higher this January compared to a year ago. Wow. At 309,000. So to our prior conversation, that waiting probably means you're gonna pay more. Right . That's a 14% increase. Now, one interesting thing is that January's median price of 309 is a lot lower Oh . Than the median sales price for all of 2024, which is 3 35. Okay. But that is just a seasonal phenomenon. Yeah . If you look at the data, January's median sales price always lower. It doesn't mean that property values have come down. No. Just means the mix of size and type .

Speaker 3: 20:41

Yeah. The property characteristics of the homes that were sold in January just happened to be of that lower price range, you know, characteristic.

Speaker 1: 20:49

Right. And now I always like to go back to pre covid. So if we look at January of this year versus January, 2019, home sales were only down by 120 units. I was surprised that was only an 11% decrease. I thought it was gonna be more. Uh , but the median price over the last six years has gone up $116,000. Woo .

Speaker 3: 21:09

Yeah.

Speaker 1: 21:10

60%. Alright . What about , uh, having to pay over asking , uh, here's a multiple question. Uh, do you think that number was 27%, 32% or 37% in January? Hmm .

Speaker 3: 21:22

I'm gonna go, I'm just gonna pick the middle. Let's do 32%

Speaker 1: 21:25

Always a good guess on my quiz show. <laugh> it is 32%, which is very much in line with January of 2024. And also exactly the same as January, 2023. January seasonally is always the lowest number. Right. For a percentage over asking

Speaker 3: 21:41

It's only gonna go up, which it's already relative . I mean, it's one in three already. That's right. Right. So it's not like it's a low percentage even now.

Speaker 1: 21:47

Correct. And compared to Redfin's National number though, they say that 22% so

Speaker 3: 21:53

Right . So this local five county market is hotter than the national average .

Speaker 1: 21:56

You got it. Yeah . Um, we can expect if, if February this year is like February of last year, we can expect that number , uh, to go back up to around 40% over asking Sure. For February and then about 50% over asking by March

Speaker 3: 22:12

In , in the spring and summer. Yeah . Yeah . And

Speaker 1: 22:13

Then it kind of goes up into the mid fifties typically, you know, over the peak. Um ,

Speaker 3: 22:17

Yeah. Which begs the question, why aren't more people deciding to look now? You know, it's like , uh, knowing this data Yeah . Independent of rates. It's like, you know, I I mean, I know it's not fun to trudge through the snow and the cold to go look at a house, but

Speaker 1: 22:32

Maybe they're just waiting for , um, more, I more inventory inventory to come on the , uh, on , on the market. I don't know .

Speaker 3: 22:37

It could be. Yeah.

Speaker 1: 22:38

So good old supply and demand demand is gonna keep going up. Let's take a look at the listing sides real quick. Um, January new listings in the five county Milwaukee area totaled 1,353. So the first bit of good news is that's a lot more than what's sold. Yep .

Speaker 3: 22:53

That is good. Uh,

Speaker 1: 22:53

So inventory is increasing and that too was a 10% increase over January last year. Hmm . Median listing price 3 45.

Speaker 3: 23:03

3 45.

Speaker 1: 23:04

Yep . So up from the median sales price of 3 0 9. Um, by the way , uh, another bright spot is there were 418 more listings. I already said that. Versus closed sales. Redfin says that inventory of existing home sales is up 13%. Nationwide

Speaker 3: 23:22

Sellers are finally realizing that they gotta sell <laugh>. Yeah.

Speaker 1: 23:26

They're capitulating. Yeah . It's like whatever. Um, my last little nugget here on inventory and strength of the market is , uh, right now we've got about 2,549 active single family detach condos on the market in the five county metro area. If you divide that by the number of February closed loans , uh, it's a 2.6 month supply.

Speaker 3: 23:50

Yeah. So still a seller's market.

Speaker 1: 23:52

Yeah , that's right. Anything under three is considered a seller's market. If you use March's numbers of 1240, that would be only a two month supply. So even more of a seller's market. Yeah. Redfin's National number by the way, is a 3.6 month supply, which would put it in the low end of a balanced market.

Speaker 3: 24:09

Sure. Yeah .

Speaker 1: 24:10

So, as always , um, real estate is local. Absolutely don't believe the national headlines get the real scoop of what's happening here on the academic mortgage. There you go . Show hey, when we come back, I've got a story to share about some Madison area customers who are looking to make a move despite interest rates. We'll cover that when we come back. You are listening to the Aced Mortgage and Realty Show on AM six 20 WTMJ.

Speaker 2: 24:34

Important home buying questions and answers you can count on. This is the Accu Mortgage and Realty Show with Brian Wicker on WTMJ. Welcome

Speaker 1: 24:44

Back. I'm Brian Wicker, and that's , uh, Tim Holdman over there. Good morning. You won't consult with ACU Mortgage. And uh, Tim, I got a call from a past client currently lives in Madison. Okay . At the Madison area. And , uh, the question was, Hey, we're looking Oh , same as your clients. We wanna make a move. And , uh, you know, partly because of school, our kids are such an age, we want to get into a better school district, but they actually wanna move from the Madison area to either pick your , pick your , uh, pleasurable place to live. Wauwatosa . Okay. Evanston, Illinois or the Twin Cities. Wow.

Speaker 3: 25:23

All right . <laugh> three markets

Speaker 1: 25:23

We happen to serve.

Speaker 3: 25:25

Yeah. And three very different , uh, geographically <laugh> , you know . That's right .

Speaker 1: 25:30

And so a couple of twists in this and this , uh, client was pretty sharp. Uh, very sharp. As a matter of fact, she realized that because her husband just went from being a 20 a W2, a W2 employee to being self-employed. Ah . That his income would not be usable.

Speaker 3: 25:46

Not right away, no. Okay .

Speaker 1: 25:48

Now, what she didn't realize is that there's an advantage to let's leave him off the application. Okay. Because he brings some pretty hefty school loan debt, all the puzzle,

Speaker 3: 25:57

Wipe that out. That's

Speaker 1: 25:58

Good. And so he can still be on the title to the house, but let's not put him on the promise to pay back the money. So that was , um, what do you call it ? Revelation number one. Sure. Yeah . And then she's also sharp enough to say, but, you know, I can't, I don't make enough income to carry the day. So I think we're gonna need one of our parents to co-sign. Sure. Yeah . Well , luckily the most likely parent to co-sign is how they found out about acuate in the first place.

Speaker 3: 26:21

All right . There

Speaker 1: 26:21

You go. From , uh, her husband's father and we had just helped them buy a condo in 2023. Oh, perfect. So we had some relatively UpToDate numbers for them . Yep . And now this isn't all gonna happen until like April or May. Sure . So , but the , the fundamental question was, is this even possible?

Speaker 3: 26:38

Like , can we do this? Yeah .

Speaker 1: 26:39

Can we do this? Can we, you know, come outta this, can we, we buy, and the real question was can we buy a 750,000 home with 10% down? If , if it's just

Speaker 3: 26:48

With , with no home sale contingency either,

Speaker 1: 26:49

Right? Well, no, no. They , she realizes that they're gonna have to sell their home. All

Speaker 3: 26:54

Right .

Speaker 1: 26:54

And in fact, she's already got it planned out. They're gonna pay off a couple of car loans and a credit card Perfect. Yeah. To help Okay .

Speaker 3: 27:01

Consolidate some debt. Yeah,

Speaker 1: 27:02

That's right. So now the other couple of interesting twists, and this is in the category of the devil is in the details. Yes.

Speaker 3: 27:09

Always.

Speaker 1: 27:10

So , uh, on her side of the , uh, income ledger, and by the way , um, as long as she's on the loan or you know, then , then we can count this as an owner-occupied transaction Oh, absolutely. And get the best pricing even though there's going to be a non OCU occupying cobar. Totally

Speaker 3: 27:25

Fine. Yeah .

Speaker 1: 27:26

The other thing that I think people don't always realize though is that in addition to using the co-signers income, we also have to use their monthly obligations. Right. Which includes, even if they happen to now own their home free and clear the taxes and insurance and HOA dos if it's a condo

Speaker 3: 27:41

Yeah . We have to count that as a monthly ongoing expense, even though, you know, obviously they pay their taxes and insurance annually, we have to count it as sort of a monthly expense to , uh, fit it into what's called the debt to income ratio. That's

Speaker 1: 27:54

Right. So she had listed on her income $4,500 a month from a part-time , um, W2 job that she has. Okay. Um, and luckily she's been on that job for over two years. Excellent. So we can use that. 'cause that's a little rule, part-time income. Gotta have at least a two year history. And, and she's hourly. So that's considered variable. And this is a , an important part of the story. And then she also listed $4,500 a month from a health related studio that she owns and works at in Madison. Okay. And in her mind that income is gonna continue even though she's gonna move away. But I said, I don't think we're gonna be able to use that.

Speaker 3: 28:33

That would be a tough sell. You'd have to prove that it's

Speaker 1: 28:37

Kind of an in-person business.

Speaker 3: 28:38

Yeah. You can do it remotely and something like that for a health studio. I don't know if

Speaker 1: 28:42

That's gonna fly . How , how do you Yeah. You , you , you really can't overcome the skepticism there. No. Right. Um, okay. So the , the thing that is not clear to people, and it's perfectly natural, is that she assumed, Hey, my current pay from this part-time job, so we're gonna do this with her part-time income. And then the ,

Speaker 3: 29:02

She says

Speaker 1: 29:02

Father-in-law. Yeah . And then the father-in-law's and everybody's, you know, debts is that she listed her current income at from that job, 4,500. But what do we have to do when it's a part-time job?

Speaker 3: 29:16

Well, we have to prove that it's going to continue at generally the same rate. Well , we gotta average it, right? Yeah. You gotta do a two year average of the

Speaker 1: 29:24

Income. Right ? Yeah . And so instead of, and then she dutifully and very quickly uploaded her pay stubs and W twos mm-hmm <affirmative> . So it turns out that instead of $4,500 when we average it over 20 23, 20 24, and now 2025 year to date , we're only at 3,200.

Speaker 3: 29:40

Right. 'cause my guess is maybe her income has been going up over time . Oh , it's , it's

Speaker 1: 29:44

Been going up.

Speaker 3: 29:44

Which is great, but to your point, we have to look at that two year history 'cause it's considered variable income, which is a word that makes, you know, Jason Hanson, our operations manager, you know, turnover and be night . Well ,

Speaker 1: 29:56

It's , it's a big, it's a big hot button with fan being Freddie Mac is let's not be overestimating. Right . This variable income. The last thing though that she had no idea, and that I pointed out, is that if you buy in Evanston, Illinois, those property taxes are probably gonna be 20 grand Yeah .

Speaker 3: 30:15

For a $750,000 house. Yeah . Absolutely.

Speaker 1: 30:17

Whereas , which is gonna be beyond, it's really would be stretching it. Whereas if you buy in Wauwatosa , maybe it's gonna be 10 or 11,000 or something like that. Yep . I looked up some, you know, recent listings. And so that is gonna make all the difference . So in quick , uh, amount of time really in a day Yeah. We're able to say, yeah, you know what, this is possible. Uh, but you know, here are some things you gotta be aware of. So that's what we love

Speaker 3: 30:46

To do. Absolutely.

Speaker 1: 30:47

We love to take complex situations and give people the answers. Yeah.

Speaker 3: 30:50

And , and even with this really sharp customer, Brian, there are things that they didn't know or understand about the mortgage process and , and why would they? Right. It's , it's , it's our job to have that expertise.

Speaker 1: 31:00

That's right. So another happy , uh, situation going on there. Hey, when we come back, let's talk about , uh, Fannie Mae's most recent home purchase sentiment index reading . How are people excellent feeling about the housing market? We'll cover that when we come back. You're listening to the AC Mortgage and Realty show on AM six 20 WTMJ.

Speaker 2: 31:19

Find a place to call home without the headache. This is the Accu Mortgage and Realty Show with Brian Wicker on WTMJ.

Speaker 1: 31:27

Welcome back. And , uh, Tim, thanks for doing the show with me today.

Speaker 3: 31:31

My pleasure. Appreciate

Speaker 1: 31:32

It. So Fannie Mae, once a month , uh, does a survey, I think it's of a thousand Americans. Okay. And it's called the Fannie Mae Home Purchase Sentiment Index. So basically it's just trying to say how do people feel, right. Or believe, you know, what is their mindset relative to buying a home? And so , uh, for January, the number came in at 73.4, which by itself means absolutely nothing

Speaker 3: 31:58

<laugh> . Right.

Speaker 1: 31:59

But it is up from a year earlier when the index was 70.7. So a nice little increase there. And , uh, the highest index score ever was 93.

Speaker 3: 32:09

Okay.

Speaker 1: 32:09

That came back in late 2019.

Speaker 3: 32:12

Makes sense.

Speaker 1: 32:12

And then the low point was a 61.6 reading back in October of 22 when the 30 year fixed rate mortgage was over 8%. <laugh>

Speaker 3: 32:22

Also makes sense. So we're

Speaker 1: 32:23

Kind of back from the doldrums , uh, but , uh, but moving, you know, slowly in the right direction. And so that index is derived from basically six questions. So let's see, you know, what, what your mindset is or our audience play along with us at home. The first question is, is it a good time or a bad time to buy a home? And so , um, do you think that the answer for good time was 22%, 24%, or 30%?

Speaker 3: 32:51

Uh, I'll go middle, but I feel like you're gonna try to switch this up on me now. Yeah . 'cause I got your pattern down <laugh> . That's right. That's

Speaker 1: 32:56

Right. The answer is it's only 22%. Okay . Of people say it's a good time, that means 78% said it's a bad time to buy. Yeah. And so they measure that difference. It's a negative 55% difference between the good and the bad. So that's still, you know, not great on the negative side. Yeah . But here it's 11 points better than it was a year ago. Yeah . So, you know, people are

Speaker 3: 33:18

So more , more and more people are starting to say, yeah, you know what it is an okay time to

Speaker 1: 33:22

Buy . It's not Yeah . If it's , if it's not a good time, it's the time. Yeah.

Speaker 3: 33:25

Right. It it is the time. Yeah.

Speaker 1: 33:26

Okay. The next question is selling conditions. Good time , uh, versus bad time. Uh , and the answer there is that 63% people said it was a good time and only 36 said it was a bad time. So that's a spread of 28% Sure. In favor of good time. That too is 9% better. Got it. Than a year ago. Okay. So sellers are like, yeah, whatever. Now I'm , I'm doing it. Yep . Um , mortgage rate outlook , um, do we think rates are gonna go down only 35%? Those who think they're gonna go up 32%. And so that's a 3% difference. Uh, that's 5% worse than last year.

Speaker 3: 34:04

So interesting. Yeah. Because people are no

Speaker 1: 34:05

Longer optimistic about rates coming down, which is realistic.

Speaker 3: 34:08

Yeah, that's understandable. And, and frankly accurate, you know, so it's

Speaker 1: 34:11

Good . Now , this is interesting and I , I guess kind of goes to the national , uh, element to the survey. Do you think home prices are gonna go up 43%? Do you think they're gonna go down 22%? So that's a net of 20% in the go up department. Mm-hmm <affirmative> . Which is,

Speaker 3: 34:28

Which the , the data we already previously discussed kind of flushes that out

Speaker 1: 34:32

For our local market for

Speaker 3: 34:33

Sure. Yeah.

Speaker 1: 34:33

So this is again, a nationwide survey, but it's like 5% more people think that they're gonna go up , uh, than a year ago. Okay. Yeah . Which maybe people are just getting more realistic. Um , the last two things real quick are , uh, job loss concern you're not concerned is 78% , uh, you are concerned is 22%. Okay . Yeah . So that's a spread of 56% in favor of, I'm not worried about losing my job,

Speaker 3: 34:58

A good amount of stability, but

Speaker 1: 34:59

That is eight points worse. Oh. Interest than interesting . So people are a little bit more worried about losing their job. And the last thing is household income , uh, 17% say they think it's gonna be significantly higher , uh, versus significantly lower is only 9%. That's an 8% spread, 4% better Okay. Than last year. So you add that all up and more and more people both on the buy and the sell side are saying, you know what, it's a little better. Yeah. This year than last

Speaker 3: 35:25

Year. I think that data does reflect accurately and just the on the front lines, you know, and David has shared this and I would agree with him. I think more and more people are waking up and deciding this is the year we're gonna try to buy. Buy.

Speaker 1: 35:37

Yep . And that means somebody's waking up and it's gonna sell, as we said. Hopefully. Yeah. Listings were up in January, so let's hope that trend continues for our clients. Absolutely. That's all the time we have for today's show, folks. If you would like to work with enthusiastic and highly skilled professionals to help you become a home buyer in 2025, we'd love to help you . All you gotta do to get started is click on that blue button@accu.com. Thanks again for tuning in. You've been listening to the ACLU Mortgage and Realty Show on AM six 20 WTMJ. The proceeding was a paid program. Advice and opinions expressed during the Accu Mortgage and Realty Show are solely that of the host or guests of Acuate Mortgage and Acuate Realty Advisors, and not WTMJ Radio or Good Karma Brands. Milwaukee, LLC.