NOVEMBER 2024
Fed cuts interest rates again
The U.S. Federal Reserve cut interest rates again by a quarter of a percent, continuing on its path to bring down borrowing costs just two days after an election that many economists fear might bring an uptick in inflation. The move was expected, and markets are already pricing in another 25 basis points cut in December, according to U.S. News & World Report.
"Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low," the Fed said in a statement. "Inflation has made progress toward the Committee's 2 percent but remains somewhat elevated. The committee judges that the risks to achieving its employment and inflation goals are roughly in balance."
California housing affordability improves from prior quarter and year
Slower home price growth and more favorable interest rates in third-quarter 2024 buoyed California's housing affordability from both the previous quarter and a year ago, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) said today. Sixteen percent of the state's homebuyers could afford to purchase a median-price, existing single-family home in California in third-quarter 2024, up from 14 percent in the second quarter of 2024 and 15 percent in the third quarter of 2023, according to C.A.R.'s Traditional Housing Affordability Index (HAI).
The third-quarter 2024 figure is less than a third of the affordability index peak of 56 percent in the third quarter of 2012. Rates started the quarter on a downward trend but have climbed since bottoming out in early September. With the dwindling chance of another sizable Fed rate cut in 2024 due to a stronger-than-expected economy, mortgage rates shot back up above 7 percent in recent weeks, reaching their highest levels since early July. Rates could still come down before the end of the year, but the odds of a meaningful decline in the next couple of months have reduced sharply from three months ago.
Investors betting Trump will privatize Fannie Mae, Freddie Mac
Shares in mortgage giants Fannie Mae and Freddie Mac soared Wednesday on expectations that Donald Trump's return to the White House – and potential Republican control of Congress – will revive efforts to privatize the companies. During his first term as president, Trump began the process of "recapitalizing" Fannie and Freddie, which were placed in government conservatorship in 2008 as mortgage delinquencies and foreclosures climbed during the Great Recession of 2007-9. But Democrats derailed the plan to privatize Fannie and Freddie after Trump lost the 2020 election.
The Wall Street Journal reported in September that former Trump administration officials and banking industry leaders were working behind the scenes to restart the privatization process. Congress would need to get on board, but the process could be fast-tracked if Republicans control both chambers of Congress. While the GOP wrested control of the Senate from Democrats on Tuesday, control of the House remains up in the air. Preferred shares in Fannie Mae and Freddie Mac, which were delisted in 2010 but still trade over the counter, were up more than 70 percent Wednesday, while prices for Fannie and Freddie common stock climbed by nearly 40 percent.
First-time homebuyers feel affordability squeeze, face historically tough market
With home prices setting one record after another, it's a difficult time to be a first-time homebuyer, according to Bankrate. New data from the National Association of REALTORS (NAR) shows just how challenging today's housing market is. First-time homebuyers in the past year fell to a record low of just 24 percent of all buyers, according to NAR's 2024 Profile of Home Buyers and Sellers, released Nov. 4. Before 2008, the share of first-time buyers hovered around 40 percent. Meanwhile, the median age of first-time buyers has risen to 38, the highest ever. The previous record was 36.
"We have 50 million people in this country who are between 30 and 40 – peak homebuying years. We just have this enormous cohort of people who are looking for housing," said Michael Fratantoni, chief economist at the Mortgage Bankers Association. "We have been underbuilding by a lot." Builders have both slowed the pace of housing starts since the Great Recession and shifted focus away from starter homes and toward higher-priced, higher-profit new homes.
FEMA Introduces Monthly Payment Option for National Flood Insurance Program
The Federal Emergency Management Agency (FEMA) has announced a significant update to the National Flood Insurance Program (NFIP) that will allow homeowners to pay their flood insurance premiums in monthly installments rather than requiring a lump-sum payment. This new rule, effective December 31, 2024, aims to enhance accessibility for policyholders who may face financial difficulties when paying their annual premiums all at once. By offering this option, FEMA seeks to alleviate the financial burden on homeowners and increase participation in the NFIP.
This installment payment plan is particularly beneficial for many homeowners who struggle to pay the entire premium upfront, leading them to either incur debt or forgo necessary flood insurance coverage. The ability to spread payments over the year will not only make it easier for them to maintain their insurance but also serve as a consistent reminder of their flood risk and the importance of being protected against potential disasters.
Scammers are stealing homes from under their owners' noses. AI is making it scarily easy.
Spelling Manor — a 120-room mansion in Los Angeles with its own bowling alley and beauty salon, built by Aaron Spelling, the television gremlin/ Getty Images Some real-estate scammers operate by transferring a home's deed away from its rightful owners. The owner of a $137.5 million LA mansion says they're a victim of deed fraud and can't sell it. The increasing ubiquity of AI tools makes faking deeds and ownership easier than ever. producer behind "Beverly Hills 90210" and "Dynasty" — is one of the largest properties for sale in the country. It's been on the market for over 2 ½ years with a fittingly giant price tag: $137.5 million. Its owner must have been thrilled when Eric Schmidt — the former CEO and executive chairman of Google, with a net worth of $23 billion as of October 21 — expressed interest in purchasing it, as The Wall Street Journal reported earlier this month. The issue, though, is that the owner, who operates anonymously behind a limited liability company called 594 Mapleton, can't sell it to him or to anyone else. (The Journal cited previous reporting that local agents believe the owner behind the LLC is a Saudi billionaire.)
Spelling Manor's owner told the Journal through their lawyer that scammers filed a fraudulent deed with Los Angeles County earlier this year. Two people accused of the scam in a lawsuit told the Journal that they were the rightful owners. The ongoing legal battle over the mansion's ownership stands in the way of its sale. Similar fights over who really owns homes and land are playing out across the country. Emboldened by AI technology and immense amounts of public information, some scammers have become bolder in their deed theft — also called title theft — attempts, real-estate fraud experts said. Their targets can range from mansion dwellers to owners of more modest homes and parcels of land.
A May 2024 study by the American Land Title Association and economic research firm NDP Analytics with 783 responses found seller impersonation fraud — when someone fakes the identities of property owners with the aim to sell their properties — is fairly common. Twenty eight percent of title insurance companies experienced at least one seller impersonation fraud attempt in 2023; 19% saw attempts in April 2024 alone. The FBI's Internet Crime Complaint Center doesn't specifically track deed fraud. However, in 2023, it processed a total of 9,521 real-estaterelated complaints — which it defines as a loss of funds from a realestate investment — resulting in more than $145 million in losses. And while Spelling Manor is a conspicuous example because of its size and value, anyone who owns a house or a piece of land could have their deed transferred away without their knowledge.
October 2024 stats for Santa Cruz, Monterey County & the Bay Area
Comments: New listings remained the same or close to it in Santa Cruz and Monterey with Santa Clara showing a 15% decline. Sales were up 27% in Santa Cruz, down 5% in Monterey and up 14% in Santa Clara. Median price increased over 3% in Santa Cruz, declined a bit in Monterey and stayed relatively the same in Santa Clara. Days on market jumped significantly in some individual cities but overall stayed the same for a countywide average. Sale to list price ratio decliined over 6%-8% in some areas (Aptos & Los Gatos) and increased over 4% in others (Watsonville). (Display of MLS data is deemed reliable and is not guaranteed accurate by the MLS as of 10/31/24)
