Today's Market News:
More Fresh Listings Debut for Fall
More homeowners decided to list their homes recently, which resulted in fresh home listings reaching their highest level since August 2022. There were 383,795 new listings appearing during the four-week period ending August 30th, while active listings rose 2.4% year-over-year to about 1.51 million.
On a regional basis, active listings increased 10.5% year-over-year in the Midwest and 9.1% in the Northeast, beating the 3.2% increase in the West region and 1.1% in the South.
However, buyers have yet to respond with stronger contract activity. Pending sales fell to their lowest level since February during the four weeks ending August 30th.1
A Historic Look at Adjustable-Rate Mortgages
Research carried out by Redfin found that, over the last 50 years, many homebuyers would have saved money by choosing an adjustable-rate mortgage (ARM) instead of a fixed-rate loan. This is because these buyers often had the opportunity to refinance to a fixed-rate mortgage with a lower interest rate before their first rate adjustment.
Redfin's analysis of Freddie Mac mortgage data going back through 1970 found that about seven in 10 U.S. homebuyers (71.6%) who chose an ARM had a chance to refinance into a 30-year fixed rate at least 0.5 percentage points lower than their original rate within five years of closing.
"History is on the homebuyer's side: In the past half century, a majority of those who chose ARMs had a chance to lower their mortgage rate by at least half a point — which means their rate never increased," said Chen Zhao, Redfin's head of economics research.
When interest rates are higher, some homebuyers opt for an ARM over a fixed-rate mortgage, as they offer a lower interest rate for the first few years (usually three to 10 years) of the loan. Some may plan to refinance before the starter period ends, while others know they'll be selling and moving again soon.
If you have prospective buyers who are hesitating to buy because of higher interest rates, refer them to me so I can introduce them to one or more ARM products.2
August Not a Hot Month for Sellers
As mortgage rates continued to climb last month, reaching their highest level for the year, home sales cooled. According to Zillow's August Market Report, higher mortgage rates kept many buyers sidelined with home sales slipping by 0.6% year-over-year. It's a big chill, especially as July had posted a 6% annual gain.
Economists aren't expecting to see sales warm up in September, either. Because August's closed sales largely reflect contracts signed in July, when elevated rates were already discouraging buyers, September's figures are likely to soften further. Newly pending listings fell 2.6% year-over-year in August, a rapid deceleration from June's 7.5% annual gain.3
Strategies To Help AI Recommend You
If you've already discovered that AI can do more than help you write better emails, you may be wondering how you'll fare in an AI search for an agent. More prospective home buyers and sellers are asking AI for advice, including recommendations for real estate agents in their area.
Considering that an increasing number of people are substituting an AI chatbot search for a web search, this means you'll want to improve your chances of showing up in more of these searches. Before AI, this type of site improvement was called search engine optimization (SEO) — now we've moved on to Answer Engine Optimization, or AEO.
One main difference is that AI looks for "trust signals" within your own and your competitors' sites. Keep this in mind, and the following improvements are easier to carry out.
Create a FAQ page for your services that includes a clear, comprehensive explanation of how your commissions are determined per NAR regulations and include a written agreement.
Create a Reviews page or section that features all review platforms, and links to your own reviews. This roofing company's Reviews page is a good example.
State your ethics policies clearly. Make sure your About Us page clearly includes your business policies and ethical standards. Use clear subheadings and specific language — this tells AI you're transparent and trustworthy. Or create a separate page dedicated to Policy and Ethics.
Add Last Published dates and author bylines to your content. AI prefers recent content to stale. If you're the author, be sure to link the author byline to your business bio.4
Employment's Up...So Why Do Economists Expect a Rate Hike?
While the labor market rebounded in August, with nonfarm payrolls increasing by 162,000 and upward revisions adding 55,000 jobs during June and July, these numbers didn't ease concerns with rising inflation. This is because recent increases in energy and gasoline prices have continued, driven by the Middle East conflict.
In addition, wage growth has slowed down this year. Average hourly earnings rose by only 3.1% year-over-year in August, coming in at the slowest pace of 2026.5
Sources: 1theclose.com, 2redfin.com, 3mpamag.com, 4linkedin.com, 5eyeonhousing.org.
Recent Comments