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Every fourth Sunday, Regana Kooman-Henry discusses various aspects of the home buying process and home ownership experience.
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You're listening to locally produced programming created in
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KU NV studios on public radio K u and v 91.5. You're listening to special programming brought to you by Regatta. kumin. Henry of Coldwell Banker Premier Realty. The content of this program does not reflect the views or opinions of 91.5 Jas and more, the University of Nevada, Las Vegas, or the Board of Regents of the Nevada System of Higher Education.
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Welcome to the Southern Nevada real estate Show. I'm your host regatta and I am a real estate agent and broker associate with Coldwell Banker Premier Realty. And today I have a special repeat guest on our show Keirsey Imangi, a loan officer with the loan depot mortgage company, welcome back to the show. Keirsey
Unknown Speaker 1:08
Thank you. We're gonna it is always a pleasure to be here and talk shop with you and get this knowledge out to the people on the on buying a home. Yes, yes, definitely. So Keirsey. Let's start out by talking about the big change to FHA loans that came out in the news, the end of February. I think that everyone is going to want to hear about this.
Unknown Speaker 1:35
Yeah, this is some really big news in the housing industry. And you know, this is big for homebuyers right now. So what that news was, was the Federal Housing Administration or FHA is, most people know it, they announced that there is a 30 basis point reduction to the monthly mortgage insurance premium that is charged to homebuyers who obtain an FHA insured mortgage. So the premium is going to be reduced from point eight 5% down to point five 5% For most homebuyers that are seeking an FHA FHA insured mortgage. So let's start by letting our listeners know exactly what we're talking about. FHA monthly mortgage insurance is a fee that you pay every month if you have an FHA loan to buy a house. And this fee helps protect the lender in case you can't make your monthly mortgage payments. So you really want to think of it like car insurance, if you get an accident and can't pay to fix it, your car insurance helps cover that cost. So in the same way, if you can't make your mortgage payments and your house, God forbid, goes into foreclosure, the FHA insurance helps the lender cover recover some of that money that they lent to you. And then the amount that you pay for the FHA monthly insurance really just depends on how much money you borrowed to buy your house and then how long your loan is for. Okay, that's a good definition of what what mortgage insurance is. That's for people out there that maybe have never purchased a home or even people that have just as a refresher, so thank you for that. That explanation, QC and QC? What does that mean, for homebuyers? Good question. So what this means this big change means is that there will be an estimated savings of around $678 million for American families by the end of 2023. Alone. That's that's a huge number, right? Yes, the reduction is said to benefit an estimated 850,000 borrowers over the next coming year. And the average FHA borrower, purchasing a one unit single family home with a $265,000 mortgage will save approximately $800 a year as a result of this premium reduction. And for the same borrower with a mortgage of 467,700, which sounds like a super random number, I'm sure, but it is actually what the national median home price as of December 2022, is so that's where I got that number. So during the are for this new FHA is mid reduction, that will save that borrower more than $1,400 in the first year of their mortgage. While care see that is decent savings, someone can definitely, you know, benefit from the savings for that reduction. And again, for people out there that didn't know about that, you know, it's great that Keirsey is going over that, that scenario so people are aware of the changes
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is in QRC? Can you break that down, for example, into numbers for buyers in Las Vegas to understand how it would it would affect them directly? Here's a yes, of course. So, you know, we can talk numbers and savings. But what does that mean to you? As a homebuyer? Right? Right. So let's say that you have a loan amount of 400,000. Under the old mortgage insurance, it would have cost you roughly $340 a month. And now under the new reduced premiums, that same mortgage insurance is now to 20 a month. That's a savings of $120 a month. That's that's huge, right? Right. So this means that it's not only going to lower your payment, but it also means that you're going to be able to qualify for a higher purchase price. So for example, let's say that what to do with today's current interest rates, your payment goes up roughly $66 for every 10,000 increase in loan amount. So in this same scenario that we're talking about, you could increase your buying power by $20,000. So if you were approved for a home for 400,000, you now qualify for 420,000. And that's huge, right? We're gonna need a huge, that's a real that that is really good. So Keirsey, let's switch gears a little bit and talk about rates. I hear a lot of chatter and talk that people want to wait to buy until rates come down, right? Yes, all the time. Oh, I'm gonna wait for that two or 3%. It's gonna happen any day now is what they're saying. Right. You know, and you say, you say curiously, that higher rates can be a benefit to the buyer. That sounds crazy. Can you expand on on what you mean by that? Absolutely. Crazy. Keirsey? Right, talking about higher rates can be a benefit to your buyer, right? Well, higher rates can be a benefit to your buyer. And I know that that sounds crazy. So let's start with what drives the mortgage rates, right? Because, you know, the news likes to scare everybody. And, you know, you see all these things, and it's hard to make heads or tails of what makes sense. And what's happening. So what drives interest rates is inflation. And right now, inflation is starting to come down. And as it comes down, it drives rates to more attractive levels. Right. Okay. Well, that's really great, awesome news. But we have seen rates continue to go up while we see on the news that inflation is going down. You know, Keirsey, why have rates not gone down here? See, right. Right. I'm talking about inflation drives it. And here we see, you know, higher rates right now, but that's a great question. We're gonna. So the holdup here for rates dropping is going to be tied to something that we call shelter costs. And the way that they measure shelter costs is causing a lag in the data and its reporting. So let's break that down. Shelter costs are measured by rents and owners equivalent rents. And when I say, owners equivalent rent, what I mean is just really a fancy term for you know, the amount that a consumer would pay in rent instead of owning their own home. So these are the driving factors and components for shelter costs, and the costs of rents have gone dramatically high. I'm sure everybody's aware of that in the last couple years. But After peaking in 2022, they've kind of eased up. Right? That's true. So Keirsey why is that information important to us as a homebuyer? Keirsey? Another good question, I feel like you want me to get to the point here, we're gonna
Unknown Speaker 9:19
let's dive a little deeper into that. So inflation is measured by something that we call CPI or the consumer price index. And part of that consumer price index is these shelter costs. And in fact, shelter cost is actually 40% of this consumer, you know, the core consumer price index, so almost half of it is driven by the shelter costs. So what do I mean by lag? When we say that they lag we need to think of it in terms really of a roller coaster. This is kind of how it was explained to me and kind of makes
Unknown Speaker 10:00
Since this way, so let's imagine the top peak of a roller coaster, when you first get on that roller coaster, you usually have that, you know, that initial really steep climb. And much like that climb, we've seen rents doing that climb at the same steep rate. So the front car of the roller coaster represents real time shelter costs. And that means you know, what the actual current rents look like today, if you were to go and sign a lease to rent a house, apartment, condo, you know, whatever suits your your needs. And then the last car on that roller coaster is the number of measurement of shelter, that is actually in the Consumer Price Index report. So while the car in front may be headed down, the last car on the roller coaster is still on the way to the peak, and it's causing a lag in that data that's reporting. So this, this happens, because you know, you may have signed a lease six months ago, for that higher rent amount. And now that it's going in, what you are going to report when actuality, if you were to go sign a new lease today, the amount could be potentially less. So all of this CPI and shelter talk is important. Because as the consumer price index goes down, so do interest rates. Right? And Keirsey. This is all great information. But for example, how does this translate into higher interest rates being a benefit to a buyer right now? Here's a
Unknown Speaker 11:46
great, good question. So let's talk about how all this information ties into higher rates being advantage to your buyer right now. So we're in a very tight inventory environment right now, with the housing market, wouldn't you agree? We're gonna totally, totally agree. Right. So let's be honest, there's a lot of people that are like to talk about this housing bubble conditions. And let's talk a little bit about that for a minute without dating ourselves, of course.
Unknown Speaker 12:17
Let's look back in time to 2007 right before the big housing crash. Right. So there were roughly 4 million homes on the market nationwide in 2007. And that equates to too many homes, not enough buyers, it's it's just simple supply and demand, right. So just like when you go to a store to purchase something, if there's not enough interest in the product, then they start slashing prices. Right, exactly. Right. So that's what happened. But right now, there are less than 1 million homes on the market nationwide, at the same time, our population has grown. And then to add fuel on that fire now, of that 1 million, about 40% of those homes are already under contract. So the actual active listings that you can choose from is sitting around 600,000. And that's not for Las Vegas. That's nationwide. Wow. Right? That's not a lot of inventory. So the bottom line is that if rates go down, then you're going to see an increase in buyer activity, right? Yes, everybody wants to get in on those low rates. So more people want to buy to take advantage of the low rates. And then when that happens, you're gonna see multiple offers, which creates higher demand, and then you see increased pricing on homes.
Unknown Speaker 13:51
So let's go over some facts, right, we've seen home prices increase year over year, you know, for like the last 10 years consecutively. And that's 121 straight months of home values increasing. That doesn't sound like a bubble to me, does it sound like a bubble? Do you not at all? So, I mean, it is true that in the second half of 2022, you know, the prices have come down? modestly, right? Just how much they come down. That's what everybody wants to know. Because, you know, I know a lot of people think it's going to come down 50,000 100,000. You know, that's that's just not the case. Right? So we want to look at some actual data and not what our neighbors telling us the market is doing right.
Unknown Speaker 14:40
So it depends on the measurement that you look at. So there's a couple different reporting agencies. You've got the FhF A, which is the head, the scuze. Me, the Federal Housing Finance Agency, not to be confused with FHA and they're reporting that
Unknown Speaker 15:00
At home prices nationwide have come down about 1%. Now, if you look at the Case Shiller home price index, which measures repeat sales, not new construction, that's at about 2.7%. So this is also seasonally adjusted, because at the end of the year, we usually see a little bit softer levels of appreciation, you know, just due to, you know, the holidays and in other places in the country, weather and people just don't want to move mid school year, right? Yes. But on a year over year basis, we're still seeing home prices going up. So what does this mean? That means if we do see rates come down, then home prices are going to start going back up again. Right? Real talk, there is a bottom in home prices in the near future. So Keirsey. Okay, how does that affect? This is what the listeners are listening. For the listeners that are listening. They're wondering, how does that affect me? Or the listeners buying now? Keirsey? Right, right. So let's assume for a minute that none of us are good enough to pick the exact date of that bottom of the housing depreciate, excuse me depreciation we'll hit right, right? My crystal ball is broken, I'm sure yours is broken. And otherwise we'd be laying on a beach right now. Right? Living the life. So more than likely, we're all going to miss that bottom. Yes, because no one can really predict exactly when that's.
Unknown Speaker 16:36
So what do most people do? They wait until the bottom occurs. They wait until it's all clear. So and by clear, I mean, until prices start going back up, to jump in and buy a home when it appears safe. So then they all start trying to jump in at the same time. Right? Right, because they don't want to miss those low low prices. And then the problem with that is that, you know, now you're on the uphill slope of pricing, right? And sellers, sellers are also going to be more confident, you know, there's more competition, more competition leads to multiple offers, which in turn leads to be less likely for them to give you as good of a deal to pay closing costs, to give you a little bit of a break on the price, those kinds of things, right. So as inflation comes down, then rates should come down. What you want to do is take advantage of this time when there's a little bit of fear, a little bit of weakness in the housing market, and enter the market before the bottom. Because sellers are more feel fearful at this time, right? So higher rates translate better deal for you. So they're, you know, they're more willing to give you a discount, there's less competition, even though there's low inventory right now, you still have more choices than you'll have after we hit the bottom. And we start going back up into that
Unknown Speaker 18:10
in increasing market again, right that now Keirsey. Those are some great stats that you've just told us about. But curiously, let's tie all this together on how it can benefit a buyer or someone listening out there. How can it benefit them today? Keirsey.
Unknown Speaker 18:31
Great idea. So in 2012, when the market hit bottom, you know, in the following years home prices went up roughly 8%. Now 8% is a little bit over a normal market, Would you not agree? Yes. And then that and that was also a time when there was double inventory, double the inventory that we have right now. Yes. So let's be modest and say that you gain 3% appreciation on your home year over year. Yes. Which is much more, you know, a much more normal market.
Unknown Speaker 19:09
Case Shiller is saying that right now you're getting a 2.7% You know, plus or minus discount on your home pricing. And then add to that your 3% appreciation as inflation eases and rates go down. And that's really a 6% opportunity. And 6% might not sound like a lot. But when you get in those numbers that can be you know, quite a bit. Sure. You know, you can always refinance when rates drop, but remember, you can't go back in time and get that great deal that you've been sitting around waiting for Exactly. Like I'm sure you've heard by now. Mary the property date the rate? Exactly, yes. And that is a very good breakdown and analysis on how it can benefit
Unknown Speaker 20:00
As a buyer today in today's market Keirsey. And, you know, for the listeners out there, I just want you to know, experience does matter. It matters a lot. And between Keirsey and I, we have decades worth of experience stop dating us.
Unknown Speaker 20:20
Not giving our age away. But we have, we do have quite a bit of experience and it does matter. And you know, a real estate purchase or selling real estate is usually the most expensive transaction, someone will ever do. And that's why experience matters. And, you know, there's some listeners, I'm not saying everyone that's listening this morning, but I'm sure there's some listeners out there that have friends or family that are in the business of being a real estate agent or a mortgage loan officer. And no friends or family, they can be harder to do business with than someone that's not a friend or family member. And I can't tell you Carosi the countless times that I've had somebody come to me and say, hey, you know, my cousin Jerry, Uncle Jerry, or, you know, my cousin Mary, or whoever, they're in the business, I'm gonna use them, but it didn't work out. And they come to me, they come to QRC. Because, you know, sometimes it's hard because friends and family expects more, sometimes it's better just to go with someone you don't know, and get the job done. Because it's business. So Keirsey and I over the years, we can basically separate business from personal friendships and family members, we can separate it and we can do a good job for our friends and families. But not all realtors. Not all mortgage people, they have good intentions, but it's just not them to separate the two. So I would encourage you if you don't know who to go to, because you know, so many that are in our business, give us a call, we can help you know, someone's gonna get hurt. If you know a lot of people it's in the business too. Because, you know, they can say why you didn't use me or why didn't you use me to finance? Right? Keirsey? You know, oh, yeah, for sure. But you know, like I say, you know, my brother's a physician, right? Yes. So I'm not going to him fresh out of med school, asking him to do my open heart surgery. Exactly. I just, and I love my brother and I trust him. But I want somebody with experience to do something that that's life changing and buying a home is very life changing. Exactly. And you know, my number, it's 70259612677025961267 Keirsey. Toward the end, we'll give her number out also. And, you know, I know there's some listeners out there that might be afraid of being rejected for mortgage loan approval. They just don't feel confident. They think that they can't have the American dream of homeownership, you know, maybe they've had problems, financial issues, or maybe growing up. It wasn't the normal for their family to own their own home. But we're here to prove you wrong, we're here to help you. Don't let your dream fly by owning a home is the American dream. And don't let it stop. You don't let anything negative, you know, and, you know, sometimes you have to get comfortable with being uncomfortable. And you need to put one foot in front of the other some people are hesitating, listening to the news, there's never a bad time to do the right thing. And if owning your own home is one of those things, we are definitely here to help you, you know? Yeah, for sure. And, you know, let me let me just interject this right here. So, in the last couple of weeks, I have closed some loans for some people and you know, all all different experiences, but some of them just never thought that it would be possible for them. Right? Yeah. And we closed on their home. And I just love seeing that smile on somebody's face when they get their keys for their own home. And then some of them, you know, they've they've been rejected at with other loan officers. And, you know, a lot of loan programs are the same, but there's a lot to it. And you really have to know how to navigate that. So if you were rejected one time, that doesn't necessarily mean that I still can't get you approved. So if that's the scenario for you, you know, come on in, it's a free consultation. We can sit down we can talk about it. And you know, if it's something that might take a little bit of time, I'm willing to go over that as well. Yes. And, you know, we're both very much hear from you. We should
Unknown Speaker 25:00
With the hip, we, you know, we know what we're doing. We've been doing it a long time. And you know, the there's that saying, No pain, no game, right? Keirsey Absolutely, yes, no pain, no gang. And, you know, if you've ever had a bad experience or a disappointment in the past, I know there's some people listening out there that may have had that bad experience or disappointment regarding being approved for a loan, or feel that it's not the best. It wasn't the best experience working with a realtor in the past. That is, that was then, you know, it could have been a few years ago, last month, last week, but this is a different time. You know, whatever happened in the past, you know, we can turn things around and give you that opportunity to be a homeowner, or if you're thinking about selling to sell your home, and I treat my clients, and I'm sure Keirsey treats her clients the same way with respect and dignity. And I'm not going to leave you like a walking question mark, and neither is current Keirsey we go through line by line step by step. You know, if we write an offer, you know, together on a property, you'll know what you're signing. So when you leave my office, you can't say, I don't know what I just did, or I didn't know what I just signed. Same thing with Keirsey right. And absolutely, you know, so Keirsey thank you so much for being on my show today. QRC. And it's been a pleasure, you're replete, repeat, excuse me, repeat guests, and a very knowledgeable guests. So Keirsey please say your name, company name and phone number trice for the listener, so they can call you. Thank you, we're gonna like always, it has been a pleasure. So my name is Keirsey and Bucky, and I am with the loan depot. My Animalist number is 1398336. And you can reach me at 208-589-1181. Again, Keirsey and Bukky. Loan Depot 208-589-1181. Yes, and Keirsey. You've shown shared so much knowledge today. Thank you so much. And I'm sure this won't be the last time you'll be on my show. And again, anyone that wants to call Kiersey and get more information, please do so we are an open book. And my name is regatta kumin Henry, and I am a real estate agent and broker associate with Coldwell Banker Premier Realty and I'm also your host for the Southern Nevada real estate show that airs every third Sunday of the month at 8:30am. And my number is 702-596-1267. That 702-596-1267 And my license number is BS 27880. Thank you so much for listening to my show. And I wish everyone listening a great Sunday. Have a great Week.
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