STAYIN’ ALIVE IN ‘25
It’s June already, and the historically huge summer selling season is upon us. How are you feeling? Our gauge of the marketplace from coast to coast is that the big are getting bigger, and that others are just hanging on. Here’s what we see working, and how you can benefit:
- HOUSING SALES REMAIN TEPID: In May, the sales rate of existing homes in the US was 5.41 million, a seasonally adjusted annual rate, which was a 3.4% drop from the previous month. This marked the weakest reading since June 2020 (coming out of the COVID shutdown) and was the lowest since January 2020, according to the National Association of Realtors.
- MORTGAGE RATES REMAIN “HIGH”: The current rate hovering around 7% is a great rate when looked at historically, but with over half of current mortgages in the US (about 55.2%) having interest rates below 4%, according to Redfin, few homeowners are budging. This also includes a smaller fraction (21.3%) with rates below 3%.
- SUCCESSFUL MOVING OPERATIONS ARE GETTING EVEN MORE AGGRESSIVE: Consequently, you have no choice but to advertise and market aggressively yourself.
- “LABOR-ONLY” MOVES: Becoming more and more popular and make sense as inflation has dented so many households’ pocketbooks.
- STORAGE. STORAGE. STORAGE: If you have a self-storage revenue stream, you’re golden. If not, it’s time to market your warehouse storage more aggressively. Think outside the box here. Generate new ideas to replenish your warehouse capacity. Don’t let Public Storage and 1-800-Self Storage eat your lunch. Americans apparently can’t throw anything away. Take advantage of it!
The bond market appears to be indicating that the mortgage rate will not decrease this year, remaining at or above 6%. As I write this, the 10-year US Treasury bond is at 4.51%, which is the bond that mortgage rates are based on. Once the mortgage banker adds their fee on top of this, you can see how we get to a 7% mortgage rate.
Onward & Upward!
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