2014 - Keeping Current Matters

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How to Create a Brand as the
GO-TO Mortgage Professional
5.2014
Single-Family Mortgage Originations
FreddieMac
Today, we will construct a unique value proposition that will
allow you to stand out as the “go-to mortgage professional”
with your real estate partners by giving you the tools your
agents need:
1 – To dominate the market of Millennial buyers who are
now entering the market in record numbers
2 – To leverage the opportunity presented by the Baby
Boomers who are moving-up to the house of their dreams
or downsizing their primary residence and buying a second
vacation/retirement home
3 – To readily identify the three most important activities
they can be involved in over the next 90 days
Answer ANY & ALL questions you have regarding Bridge
Builders and the opportunities it provides
MILLENNIALS
HOUSEHOLDS
in the U.S.*
2014-2017
*Urban Land Institute’s 2014
Emerging Trends
in Real Estate
3.7%
Projected Growth over
the Next 3 Years
121M
Current Households
in the United States
4.48M
Additional Households to
be Formed
Are 4.2M First Time Buyers about to Buy?
%
10
4.2M
of all renters nationwide
would like to buy within
the next 12 months
first-time home sales, if
all renters that wanted to
buy actually did purchase
a home in the next year
Zillow 3/2014
Unemployment Rate: Millennials Ages 25-32
with a Bachelor’s Degree vs. U.S. Rate
Bureau of Labor Statistics & Pew Research
Median Annual Full Time Wage: Millennials
Ages 25-32 with Bachelor’s Degree vs. U.S.Rate
Bureau of Labor Statistics & Pew Research
MILLENNIALS are
ready to buy homes…
85%
of Millennials plan to purchase a
home in the future
58%
increased their interest in purchasing a
home in the past year as the positive
attributes of homeownership resonate
with this generation
Pulte Group 2014
49%
plan to purchase a home
in the next two years
Of those planning to buy in the near-term:
56%
41%
are current homeowners
are renters
Millennials: Associate Owning A Home with…
Happiness - 62%
Independence - 61%
Achievement - 59%
Pulte Group 2014
Percentage of Buyers
by Generation
NAR 2014
Buying is CHEAPER than
renting in ALL of the 100
largest metros by
%
an average of…
38
Trulia 2/2014
The Increasing Cost of Renting
Median Asking Rent
1988-2013
Census Bureau 2014
Homeowners Net Worth…
OVER 30X
greater
than renters
Federal Reserve
An American Family’s
Net Worth
Federal Reserve
2014
will be the year of the
repeat homebuyer
- Trulia
%
63
Consumer Views on
Housing & Economy
have a positive outlook
on the economy this year
Lending Tree Survey 2014
69
%
have a positive outlook
on housing this year
71
%
said they are considering
selling their home in 2014
We are anticipating a meaningful
increase in the supply of homes for
sale. The survey evidence suggests that
rising prices are motivating more
owners to list their homes.
Paul Diggle
Capital Economics
Boomers are starting to move…
“The oldest Baby Boomer turns 68 this year, and the
youngest turns 50. They are buying homes in droves
as their employment situation, home values, and
stock portfolios have almost fully recovered from the
Great Recession.
We are seeing strong sales
in this same demographic
throughout the country.”
- John Burns Real Estate Consulting
Baby Boomers ready to buy a 2nd home…
25%
said they’d likely buy a second home,
such as a vacation or beach house,
to use during retirement
BH&G 2014
Vacation Home Sales
UP 29.7
%
NAR 2014
Thinking about moving up to the
home of your dreams?
Move-Up
Seller
Comparison – End of 2015
Current Price
Future Price (+8%)
Future Gain
Actually Lost
Current Home
Move-up Home
$300,000
$324,000
$24,000
$400,000
$432,000
$32,000
$8,000
Impact of Increasing
INTEREST
RATES
"One thing seems certain:
we are not likely to see average
30-year fixed mortgage rates
return to the historic lows
experienced in 2012."
Freddie Mac
Freddie Mac
Actual Rates
January 2013 – May 2014
Freddie Mac
Projected Rates
May 2014 – 2015 4Q
1/2013
5/2014
Freddie Mac 5/2014
Date
Mortgage
Interest Rate*
P&I**
Today
$250,000
4.5
$1,266.71
End of 2015
$270,000
5.7
$1,567.08
Difference in Monthly Payment
$300.37
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
Date
Mortgage
Interest Rate*
P&I**
Today
$800,000
4.5
$4,053.48
End of 2015
$864,000
5.7
$5,014.66
Difference in Monthly Payment
$961.18
*Average Commitment Rate per Freddie Mac **Principal and Interest Payment
Historic Mortgage Rates by Decade
Decade
1970s
1980s
1990s
2000s
2014 YTD
Average Rate
8.86%
12.7%
8.12%
6.29%
4.36%
Payment
$1,589
$2,166
$1,484
$1,237
$997
The average 30-year fixed mortgage rates and the approximate payment for a $200,000 mortgage.
Payments are principal & interest only, based on a $200,000 fully amortizing mortgage.
All terms are assumed to be 30 years.
Freddie Mac 3/2014
CONFUSION
FEAR
Jumbo Loans Thrive As
Other Mortgages Slip
- Boston Globe 5/12/2014
FHA Announces Blueprint for Greater
Homebuyer Access to Credit
- National Association of Realtors 5/13/2014
U.S. Backs Off Tight Mortgage Rules
-Wall Street Journal 5/14/2014
They must…
Be their ‘Expert’
This is a person to whom
people will turn for advice
on difficult or complex
real estate decisions.
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