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Apache is functioning normally

August 13, 2023 by Brett Tams

The nationwide delinquency rate decreased for the second consecutive quarter, dropping to a decades-long low, the Mortgage Bankers Association said.

The share of outstanding mortgages for one-to-four unit properties with a missed payment stood at a seasonally adjusted 3.37% at the end of June, according to the MBA. The percentage reflected a 19 basis-point drop from 3.56% at first-quarter’s end, the second lowest delinquency rate at the time since at least 1979, when the MBA first began reporting the data. At the end of second quarter 2022, the national delinquency rate was 3.64%.

rawGenerally favorable economic data, including wage growth and historically low unemployment figures, are helping to keep borrowers from distress, according to Marina Walsh, MBA vice president of industry analysis.

“Buoyed by a resilient job market, homeowners are continuing to make their mortgage payments,” she said in a press release.

Second-quarter numbers fell across all primary mortgage types: conventional loans and government products guaranteed by the Federal Housing Administration and the Department of Veterans Affairs. The delinquency rate for conventional mortgages declined 15 basis points quarter-to-quarter to 2.29%, its lowest since 2004. For VA-backed loans, the share of delinquent mortgages relative to overall volume was 3.7%. The FHA rate came in at 8.95%, reflecting a 32 basis point reduction.

On an annual basis, both conventional and VA delinquency rates also dropped by 35 and 52 basis points, respectively. But the share of FHA-guaranteed loans in arrears grew by 10 basis points, a possible sign of economic and credit stress hitting some segments of consumers, Walsh said.

‘Delinquencies are rising for other forms of credit such as credit cards and car loans,” she said. “As the economy slows and labor market cools, homeowners with FHA loans are likely to feel the distress first.”

The MBA’s report comes after Federal Reserve economists revealed this week credit card balances surpassed $1 trillion for the first time ever. Late payments on credit cards also rose compared to a year ago but showed more recent signs of moderation.

MBA calculates delinquencies based on the volume of loans at least one payment past due but does not include mortgages in the foreclosure process. In its research, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage.

By stage, the rate of mortgages with payments 30 days past due came in at 1.75%, while the 60-day delinquency share stood at 0.55%. Loans delinquent by 90 days or more equaled 1.07%.

Foreclosure numbers, while not included in the MBA’s delinquency data, appeared to be on a similar downward track. The total share of mortgages going through some stage of the foreclosure process was 0.53% as of June 30, down by 4 and 6 basis points quarterly and annually. New foreclosure starts in the second quarter inched down to a rate of 0.13%, 3 basis points lower from where they sat at the end of March.

The MBA’s findings corresponded somewhat to similar trends reported by real estate business intelligence provider Attom, who this week said both starts and foreclosure inventory were decreasing this summer. But Attom found the total number of properties with a foreclosure notice against them higher on a year-over-year basis.

Source: nationalmortgagenews.com

Apache is functioning normally

August 13, 2023 by Brett Tams

Just the term ‘baby boomer’ is sure to elicit a reaction, particularly from those in younger generations. Jealousy? Maybe because those born from 1946 to 1964 hold over half of all wealth in the U.S., and they own a comparable share of residential real estate. Contrast those trends with millennials, who hold less than 5% of the wealth in the U.S. There is also the inescapable fact that all Boomers will soon be over 60 and either retired or close to it.

Boomer behaivor

This, by itself, offers hope for easing the real estate inventory crunch that continues to dampen velocity in the market, along with high interest rates. If baby boomers follow the pattern of past generations, retirement means downsizing to condos or small homes, or moving to some type of retirement community. This could put a significant number of homes, particularly single-family properties, on the market over the next decade.

The multi-billion-dollar question, however, is: will they sell? Some data indicates that boomers will age in place longer than past generations because they have the health and wealth to do so. Census Bureau analysis, in fact, shows that the proportion of homeowners staying put after 65 and into their 70s and 80s has been increasing steadily over the past few decades. This trend is expected to continue as the last of the baby boomer generation moves into those age ranges.

On the other hand, 2016 research by NAR showed that baby boomers comprised the largest proportion of homebuyers amongst all generations. Since this survey included purchases of all types of primary residences, this likely demonstrates that a significant number of boomers are moving out of their family residences and downsizing. A 2018 article published by FannieMae pointed out that while the proportion of boomer homeowners choosing to move out may be less than previous generations, the sheer scale of baby boomer homeownership will mean a huge increase in the number of properties that will be sold. The Census Bureau estimates that homeownership by those 65 and older in 2026 will drop by 12 million, with a further drop of 15 million in the subsequent decade. This could mean an additional 27 million properties available to the market over that period.

Generational Impact

Due to their wealth and property holdings, the lifestyle choices of the baby boomer generation will continue to shape the real estate market — and the economy — for years to come. As a generation that prizes activity and independence, more of them will hang on to their homes longer than the generations before, but even with this dynamic, the large number of homeowners entering their 60s and beyond will dictate a significant increase in real estate inventory over the next decade.

Vince O’Neill is the Chief Economist for Plunk.

Source: housingwire.com

Apache is functioning normally

August 13, 2023 by Brett Tams

What to know

Fitch Ratings’ recent downgrade of U.S. government debt pushed the 10-year Treasury yield to its highest level this year.
Mortgage rates track the 10-year Treasury: When that meter rises, so do 30-year fixed rates.
While the downgrade isn’t major cause for alarm, its ripple effects could keep mortgage rates elevated for the time being.

A bond rating agency’s downgrade of U.S. government debt roiled markets — and created just one more reason for mortgage rates to stay firmly near their highest level in two decades.

Fitch Ratings announced late Tuesday it had cut the U.S. government’s credit grade one level, from AAA to AA+. On Wednesday, yields on 10-year Treasury notes peaked as high as 4.1 percent. The 10-year Treasury is the benchmark most closely connected to 30-year fixed mortgage rates.

“That is not good news,” National Association of Realtors Chief Economist Lawrence Yun said of the downgrade and subsequent rise in Treasury yields. “That is going to make the mortgage rate a little higher.”

Mortgage rates already uncomfortably high

The average rate on a 30-year loan rose to 7.09 percent in Bankrate’s most recent national survey of lenders, nearing the 2022 peak of 7.12 percent. Rates haven’t been that high since 2002. During the depths of the pandemic, they fell below 3 percent — rock-bottom levels that spurred a housing boom and refinancing frenzy.

For borrowers, the jump in rates has been a budget-buster. Borrowing $300,000 for 30 years at 3 percent means a monthly payment of $1,265. Jack up the rate to 7 percent, and the payment becomes $1,996.

While economists have predicted a retreat for mortgage rates, the rating agency’s downgrade puts one more obstacle on the downward path.

“This could have serious consequences,” says Dick Lepre, a loan agent at CrossCountry Mortgage in Alamo, California.

Why was U.S. debt downgraded?

In its announcement, Fitch — one of the “big three” credit rating agencies in the U.S. — pointed to a cycle of partisan brinkmanship in Washington. The latest standoff came in June, when Congress flirted with a government shutdown before reaching a last-second agreement on the federal debt ceiling.

“In Fitch’s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025,” the rating agency stated. “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management.”

Fitch also pointed to rising levels of government spending and to what it called the likelihood of a “mild” recession later this year — although many economists have begun to say it’s possible the U.S. economy will avoid a recession entirely.

Essentially, the rating agency believes U.S. government debt is riskier than previously thought. Investors, therefore, demanded a higher yield for holding the debt.

[This] is not good news. [This] is going to make the mortgage rate a little higher.
— Lawrence Yun, Chief Economist, National Association of Realtors

While sobering, the downgrade reflects mild concerns rather than a looming crisis. Fitch still considers Uncle Sam a “very high credit risk.”

“Everyone knows the U.S. government will pay those debts,” says Yun, who is holding out hope that members of Congress will take a hint from the downgrade and set aside political bickering.

“Maybe this is a wake-up call,” says Yun.

Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, likewise sees the downgrade as a call to action.

“This is a warning shot across the U.S. government’s bow that it needs to right its fiscal ship,” says Snaith. “You can’t just spend trillions of dollars more than you have in revenue every year and expect no ill consequences.”

Downgrade one part of bigger mortgage rate picture

The debt downgrade had an immediate effect on the 10-year Treasury, but that gauge is only one piece of the complicated puzzle that drives mortgage rates. The impetus for day-to-day rate movement, especially, can be murky.

While the Federal Reserve doesn’t directly determine fixed mortgage rates, the central bank does set the overall tone — and as it boosted its policy rate from zero in early 2022 to 5.25 percent now, mortgage rates rose sharply.

For 30-year rates, however, the most relevant benchmark is the 10-year Treasury yield.

That brings up a quirk of post-pandemic mortgage rates: The gap between 30-year mortgage rates and the 10-year yield is unusually wide.

This interval, known to economists as “the spread,” typically runs between 1.5 and 2 percentage points. If the 10-year yield sits at 4 percent, for example, the 30-year fixed mortgage rate should track close to 6 percent.

However, the spread has jumped to more than 3 percentage points — the highest level since the darker days of 2009, according to Bankrate research. That means that instead of a 4 percent yield translating to a 6 percent mortgage rate, borrowers are paying 7 percent for 30-year loans.

Of course, any relief from rising mortgage rates would be welcome news for borrowers, especially first-time homebuyers, who are most affected by the combination of still-high home prices, higher mortgage rates and the shortage of homes for sale.

While we can expect higher mortgage rates for now, Yun and other housing economists say they could fall back to the low 6 percent range later this year — a forecast that hinges on inflation continuing to cool and the Fed hitting the pause button on rate hikes.

“If the data shows moderating inflation, I think it’s possible the Fed may stop raising interest rates for the rest of the year,” says Yun.

Source: bankrate.com

Apache is functioning normally

August 12, 2023 by Brett Tams

Incessant patient-monitor alarms. Hospital food. Middle-of-the-night checks of vital signs. The audible suffering of random roommates.

Yes, being in the hospital is no fun, and not only because you’re receiving treatment for an acute illness or serious injury.

Decades ago, doctors began wondering if select patients presenting in hospital emergency rooms with certain illnesses and injuries couldn’t be sent home to be monitored closely and treated there, rather than being admitted to a hospital ward. This seemed feasible for many chronically ill patients experiencing flare-ups, such as people with complications from diabetes or certain heart conditions.

“Who wouldn’t want to be home rather than in the hospital?” says Dr. Jeff Levin-Scherz, an assistant professor at the Harvard T.H. Chan School of Public Health and a health management consultant at WTW, a financial services company. And the stressful hospital environment isn’t just unpleasant for patients; it can impede their healing.

“Who wouldn’t want to be home rather than in the hospital?”

Jeff Levin-Scherz, health management consultant

Adoption of the concept took off in late 2020, as the overcrowding of hospitals treating COVID-19 patients motivated the federal government to authorize and reimburse hospital-at-home care across the country. These programs, now available through nearly 300 hospitals in 37 states, are demonstrating some ability to provide acute, hospital-level care for patients in their own homes, through a variable mix of provider visits, infusions and other treatments, remote monitoring and portable diagnostics.

Many emergency department physicians are glad to consider home hospital care for appropriate patients. “It gives ER doctors an extra option for patients who they are thinking about admitting,” says Dr. Gregg S. Meyer, president of the Community Division and executive vice president of Value-Based Care for the Mass General Brigham health care system in Boston.

But home hospital care may not be the best option for everyone it’s offered to. Data on health outcomes is limited, and a patient’s personal preferences and home situation should factor into the choice of acute care setting. Insurance coverage for home hospital care may not be the same as for traditional inpatient care.

Here’s what you or someone close to you should know about home hospital care — just in case.

Which illnesses and conditions are suited to acute care at home?

Hospital-at-home programs can treat diseases like pneumonia, chronic obstructive pulmonary disease, diabetes, liver disease and heart failure (a chronic condition), as well as acute conditions like serious urinary tract or skin infections. Each provider institution creates its own list of diseases and conditions for which it may offer acute care at home.

In addition to direct medical care, institutions typically offer a range of services for a hospital-at-home admission. Health care provider Kaiser Permanente’s program for advanced care at home offers services such as medical equipment, oxygen, laboratory testing, medical meals and supplies, mobile diagnostics, pharmacy, blood draws and transportation.

Still, there is reason for caution. For one, the physicians’ task of choosing the right patients to be offered acute care at home — “those not too sick but sick enough” — is complex, wrote the authors of a 2023 paper analyzing the effectiveness of burgeoning hospital-at-home programs, published in Public Policy & Aging Report. “Minimal research informs this issue, and no reliable standards or diagnostics have yet been set.”

Will my insurance pay for home hospital?

If you have private insurance through an employer or state or federal marketplace, contact your insurer and inquire about your coverage for hospital-at-home services provided by specific hospitals in your area. Medicare has led the way with paying for home health care, reimbursing these programs for their services at the same rate as if the patient were in the hospital.

Medicaid coverage for home hospital care varies by state. Contact your state’s Medicaid office to learn more.

How does the quality of care compare?

Because hospital-at-home programs are just beginning to gain traction, research on the quality of care that they provide is limited. But so far, the data is mostly encouraging.

“There are dozens of randomized controlled trials that show that acute care at home is actually superior to traditional care in the hospital on many, many outcome metrics,” says Dr. David Levine, a clinician-investigator at Brigham and Women’s Hospital and an assistant professor at Harvard Medical School.

According to Mount Sinai Health System’s data on its home hospital program, 30-day re-admission rates for the New York City provider’s home hospital patients were less than half of those treated in the hospital: 7.8% versus 16.3% for the two years ending December 2016.

On another key metric, how long a patient remains in acute care, Mount Sinai’s impressive results were in line with those of many other home hospital programs. The average length of stay for acute care was 5.3 days for patients in the hospital versus 3.1 days for the system’s hospital-at-home patients. (Since 2020, the average home hospital stay has increased to 4.4 days, probably for reasons related to the COVID-19 pandemic.)

However, concerns about patient care quality and safety have made many physicians reluctant to send acutely ill patients to home hospital care, according to the Public Policy & Aging Report paper. “To date, a handful of rigorous studies have found positive cost and quality results, but these are based on tiny samples.”

How safe is home hospital care?

How does patient safety compare for home hospital versus inpatient care? Each environment has pros and cons. In a hospital ward, a registered nurse is always seconds away, and a doctor can be at a patient’s bedside in minutes; response times for home hospital care are longer. But hospitals have their own safety problems. In 2015, an estimated 72,000 patients with health-care-acquired infections died while in the hospital, according to the Centers for Disease Control and Prevention.

Overall, home hospital care has “very, very low unexpected mortality and very low rates of complications,” says Dr. Bruce Leff, director of The Center for Transformative Geriatric Research at Johns Hopkins Medicine.

Some patients receiving acute care at home say they feel safer in their own domestic environment than in a hospital. That was the case for Theresa Corcoran, 87, who in April 2023 suffered a cut on her leg that required many stitches. Weeks later, after developing a serious skin infection in the injured leg, Corcoran was evaluated at Brigham and Women’s Hospital in Boston during a 24-hour stay and then admitted to the system’s hospital-at-home program, which provided antibiotic infusions and wound care.

“Getting to the bathroom wasn’t easy for her” while she was in a hospital ward, says Bridget Ellis, a registered nurse. Ellis was one of the nurses who visited Corcoran during her time in hospital at home. Corcoran said that during her treatment she felt more confident moving around her own home in Belmont, Massachusetts.

The home environment also helps patients in acute care maintain their mental health while healing physically, Ellis says. “If someone wakes up in the hospital in the middle of the night, they’re very confused about where they are. Not being around familiar faces and surroundings, people do get very confused and some lash out — it can be difficult to keep them safe.”

A study at Johns Hopkins Medicine found that delirium was observed in 9% of hospital-at-home patients versus 24% of inpatients.

How does it feel to be a hospital-at-home patient?

When the hospital offered Corcoran admission to Mass General Brigham’s hospital-at-home program, “my first thought was, ‘Ooh, go home?’ That sounded good,” she says. “The places of comfort for me are in my own home.” In the hospital, “there were people in beds in the hallway.”

Corcoran says that at home, it was easier to heed her doctors’ advice. “One of the good things about this is that I can find a spot that’s comfortable in my house and keep my leg up.” Corcoran also says that sleeping in her own bed in peace and quiet and having meals on her own terms helped set the stage for healing.

When Corcoran entered hospital-at-home care, “we had a lot of people coming in, and a lot of phone calls, and a lot of doorbells ringing,” to set up the equipment and services that Corcoran would require, says Jane Chiarelli, Corcoran’s daughter. “I think it’s very important that the patient has somebody with them, at least at the beginning.”

Mass General Brigham home hospital patients do have the option of receiving 24-hour care with home health aides.

How do home hospital patients fare after discharge?

In Ellis’ experience, patients typically do better after they are released from hospital-at-home care than when they are discharged from a hospital ward.

“Being in the hospital, sometimes patients are in bed three or four days straight without getting up much,” she says. “Patients get very weak, and they do end up in rehab. At home, they’re not relying on nurses to bring them food, walk them to the bathroom or roll them in bed. They’re up and moving around a lot more, so they keep up their strength.”

Source: nerdwallet.com

Apache is functioning normally

August 11, 2023 by Brett Tams

After years of discussion, the U.S. Treasury Department is expected to propose a rule that would effectively end anonymous luxury home purchases in the coming weeks, according to the Financial Crimes Enforcement Network’s (FinCEN) regulatory agenda.

The rule, which department officials first said they planned to implement in 2021, would require real estate professionals, such as title insurers, to report the identities of beneficial owners buying real estate in cash to FinCEN. The department believes the proposed rule will close a loophole that allows corrupt oligarchs, terrorists and criminals to hide illegally obtained funds in U.S. real estate.

According to a state from Treasury Secretary Janet Yellen in March, as much as $2.3 billion was laundered through U.S. real estate between 2015 and 2020, a trend that she said has been going on for decades.

The new rule would replace FinCEN’s current reporting system known as the Geographic Targeting Orders (GTOs).

The GTOs require title companies to identify the people behind shell companies used in all-cash purchases of residential real estate.

As of mid-August 2023, 34 cities and counties throughout the U.S., including Litchfield and Fairfield Counties in Connecticut; Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, and Summit counties in Colorado; Boston; Chicago; Dallas-Fort Worth; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; Seattle; Washington, D.C.; Northern Virginia and Maryland (DMV) area; the city and county of Baltimore; the Hawaiian Islands of Honolulu, Maui, Hawaii and Kauai; and Houston and Laredo, Texas.

In all of these GTOs, except for the city and county of Baltimore, which has a threshold of $50,000, all cash purchases of $300,000 or more must reported to FinCEN.

Officials have also been working on implanting a related rule that would force real estate professionals to report the identities of shell company owners who purchase real estate in cash through their shell company. While the American Land Title Association has expressed support of the new rule, it has also stated that its implementation should be delayed until the shell company rule is also complete.

The proposed rule will be open to public and industry feedback once it is announced

Source: housingwire.com

Apache is functioning normally

August 11, 2023 by Brett Tams

But as fate would have it, a chance encounter would set her on a path she hadn’t envisioned. “There was a guy I called on that owned a mortgage company, and he said, ‘Hey, I think you’d be really good in the mortgage business’. And you know, sometimes it just takes somebody saying something like … [Read more…]

Apache is functioning normally

August 11, 2023 by Brett Tams

Some 386,000 U.S. homes today are likely to be at risk of regular flooding by 2050 because of sea-level rise from climate change, under a scenario of unchecked greenhouse gas emissions, according to a new study by Zillow and Climate Central. What’s more, America’s coastal communities have recently built thousands of new homes in these flood-risk zones, contributing to this total.

The nationwide analysis that pairs Zillow’s housing data with Climate Central’s climate-science expertise isolates the number of new homes — and homes overall — in low-lying coastal areas, projecting how many will become exposed to chronic ocean flooding over the coming decades, depending on the choices the world makes around greenhouse-gas pollution today.

The findings are available in an interactive map displaying the flood-risk zones, a sea-level tool detailing the number and value of homes at risk by location, a research report on the threat to new housing and a brief on the dangers to housing stock overall.

Moderate emissions cuts could reduce the number of current homes in at-risk areas to 348,000 by 2050. Because the effects of climate change will worsen over time, the estimates for the year 2100 are far higher: 1.3 million current homes are anticipated to be at risk of regular flooding if emissions are cut moderately, and 2.5 million homes — worth $1.3 trillion — if emissions grow unchecked.

As sea levels rise, the intermittent floods that coastal communities now experience on average once a year are projected to reach farther inland than they do today. Those floods can damage and devalue homes, degrade infrastructure, wash out beaches, and interrupt transportation systems and other aspects of daily life. They also put homeowners, renters and investors in danger of steep personal and financial losses.

“This research suggests that the impact of climate change on the lives and pocketbooks of homeowners is closer than you think. For home buyers over the next few years, the impact of climate change will be felt within the span of their 30-year mortgage,” said Skylar Olsen, Zillow’s director of economic research and outreach. “Without intervention, hundreds of thousands of coastal homes will experience regular flooding and the damage will cost billions.”

Coastal communities will encounter the effects of sea level rise to greatly varying degrees, depending on the local rate of rise, local tides and storms, the potential future development of coastal defenses, the flatness of the landscape and where homes are built within it. Some major coastal cities — including Los Angeles — sit high enough above sea level that the biggest hit — even as far out as 2100 — will be to their beaches.

Others will suffer more far-reaching and damaging effects. About 10 percent of homes in Galveston, Texas, and seven percent in Ocean City, Maryland, are projected to be at risk of at least annual flooding by 2050, if the world makes moderate emissions cuts — numbers that rise to nearly half of the homes in each community by 2100. By the same year, Hoboken, N.J., and Miami Beach, Florida, could see three-quarters or more of their homes at risk of at least annual flooding, if emissions remain unchecked.

What’s more, new homes are still being built at striking rates in areas that face high risks of future flooding. In New Jersey, for example, seven percent of current homes are projected to be in flood-risk zones by 2100, under moderate emissions cuts. But because of ongoing development, 14 percent of the state’s homes built from 2010 through 2017 are in the same high-risk areas.

“The combination of Zillow’s data with Climate Central’s coastal analysis has given us our most detailed picture yet of U.S. homes at risk from rising seas,” said Dr. Benjamin Strauss, CEO and chief scientist of Climate Central. “And we have discovered that many communities are growing faster in areas facing chronic future floods than they are in higher areas. It’s difficult to plan for higher seas if you are busy digging deeper holes.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].

Apache is functioning normally

August 11, 2023 by Brett Tams

Low-cost residential real estate brokerage is not necessarily a new phenomenon. About 50 years ago, a trailblazer named Dave Liniger created the concept of “real estate maximums,” birthing RE/MAX. RE/MAX was probably the most radical low-cost ‘disruptor’ this market has ever seen.

About 10 years later Gary Keller founded Keller Williams, and it was KW that revolutionized the cap-commission model, which, for all intents and purposes, is a low-cost model. The flat-fee model has also been around for decades, but only in the last 10-15 years has it taken off.

Are agents really keeping 100%?

Flat-fee brokers advertise themselves as 100% firms. Real estate agents under their flag get to keep 100% of the commission earned in a transaction. The way these firms make money is by charging a monthly fee and/or a transaction fee. Some may also charge other fees for such things as Errors & Omissions insurance, desk rental, technology, etc.

In reality, agents are keeping somewhere between 92 to 98 cents on the dollar with these flat-fee firms. While not truly a 100% take, agents who hang their licenses with these firms are generally keeping more than agents listing and selling with firms that have the more traditional commission models.

Flat-fee firms climbing up the brokerage rankings

Interestingly, in 2013 only five of the top 100 firms in the nation, according to the RealTrends 500 rankings, were flat-fee firms. In 2023, 10 years later, flat-fee firms now account for 16 of the top 100. By transactions last year, flat-fee firms did 12% of the closed business of the top 100, compared to 5% back in 2013. Put another way, in just 10 years, flat-fee firms have more than tripled their presence among the nation’s top 100 firms, while growing their production by 129%.

Incredibly flat-fee firms now account for six of the top 25 brokerage firms in the nation. United Real Estate, HomeSmart, Fathom, Realty ONE Group, West USA Realty and Samson Properties all have incredible growth stories since their respective beginnings.

Not all industry stalwarts welcome this model

Not all in this industry are welcoming the burgeoning growth of flat-fee firms. Many of the incumbents do consider it an invasion, and the primary reason is the ‘flat-feers’ role in the wholesale margin compression that’s been whacking this industry.

Low-cost brokerage has kicked brokers in the teeth over the years. Before RE/MAX, brokers were keeping between 30% to 50% of every commission dollar earned. With the national average retained company dollar now well under 13%, according to RTC Consulting’s latest benchmark report, there’s no doubt it’s been a grind.

With flat-fee firms retaining a lot less than traditional firms, they need to operate lean and quickly get to scale to be economically feasible. Indeed, the fast-growing flat-fee brokerages that are permeating this industry are showing they have what it takes.

I think the flat-fee model is here to stay, and I suspect we’ll continue to see this segment capture market share. Fortunately, this industry has room for every model, and if anything the flat-feer’s are forcing their competition to be better.

Scott Wright is a partner with RTC Consulting.

This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.

To contact the author of this story:
Scott Wright at [email protected]

To contact the editor responsible for this story:
Tracey Velt at [email protected]

Source: housingwire.com

Apache is functioning normally

August 11, 2023 by Brett Tams

Are agents really keeping 100%?

Flat-fee firms climbing up the brokerage rankings

Not all industry stalwarts welcome this model

Scott Wright is a partner with RTC Consulting.

This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.

To contact the author of this story:
Scott Wright at [email protected]

To contact the editor responsible for this story:
Tracey Velt at [email protected]

Source: housingwire.com

Apache is functioning normally

August 11, 2023 by Brett Tams

Are you interested in financial independence and/or early retirement? Today, I’ve asked some of the top personal finance experts to share their personal and best early retirement tips. Early retirement may sound like a dream, but there are more and more people who are trying to retire early as part of the FIRE movement. FIRE…

Are you interested in financial independence and/or early retirement? Today, I’ve asked some of the top personal finance experts to share their personal and best early retirement tips.

Early retirement may sound like a dream, but there are more and more people who are trying to retire early as part of the FIRE movement. FIRE stands for financial independence, retire early.

There is a lot of debate around financial independence and early retirement, especially about what it really means and how to achieve it.

It doesn’t necessarily mean you have millions of dollars in the bank and never work again. If that’s your goal, then great, go for it! But the idea is more about living your best possible life and no longer being controlled by money.

For some people that means completely getting rid of their debt — no credit card debt, mortgage, car loans, student loans, etc. Other people have an exact number in mind that they want to reach, like $1 to $2 million in savings.

And, something that’s surprising for many people is that early retirement doesn’t have to mean you stop working forever. Early retirement can be quitting a job you hate to pursue a job you’re passionate about.

There are many reasons for why a person may want to reach early retirement or financial independence, such as:

To be able to pursue a passion without worrying about making an income
To have more time to travel
To have freedom
To spend more time with family and those that you love

The people I’ve asked to share their early retirement tips are bloggers, authors, and business owners who have been working towards financial independence and/or early retirement. These people are experts on finding ways to make more money and save money.

For example, you’ll learn early retirement tips that include geographical arbitrage (being able to become location independent so you can save money by living in a lower cost of living area). There are also early retirement planning tips to help you figure out how the math of FIRE works — it might surprise you!

One of the biggest things you’ll learn from these experts is that reaching FIRE is about changing your mindset.

You have to really find a reason for wanting out of the normal 9-5 job path. You have to be driven and goal-oriented. Some people will have to be willing to completely change their lifestyle to make early retirement happen.

Being financially independent is an incredible feeling, and I love that I can travel more, live on my own terms, and retire whenever I want (not that I plan to anytime soon — I love what I do!).

Even though it’s an amazing feeling, becoming financially independent won’t be easy for everyone. That’s why I’m sharing these actionable early retirement tips with you today.

You will learn the early retirement tips that helped these experts get started, how they stay motivated, that it’s never too late to start working towards FIRE, and more.

More than anything, you will learn that there isn’t one straight path towards reaching financial independence or early retirement.

Related content to financial independence, retire early tips:

Here are the best early retirement tips.

1. Go for FIRE.

“After reaching financial independence and retiring at 30, I have three main pieces of advice for anyone who might be interested in FIRE:

1. Go For It

When I talk to friends and family about my journey to FIRE several of them respond that that’s great, but they love their job or enjoy working for their company. And while I am so happy for them, I also gently remind them that nothing lasts forever. The job you love could change, your company could be acquired, your industry could experience massive layoffs. Change is the only constant in life.

Pursuing financial independence is a great goal for anyone simply because it provides financial stability to weather the inevitable changes the world will throw at you. So I suggest everyone go for it even if early retirement isn’t their goal and even if they have no intention to stop working. Having a safety net is never a bad thing.

2. Figure Out What You Want

Inertia is a powerful force. When I was living in NYC and just trying to survive I didn’t take the time to pause and think about what I actually wanted. I had recently gotten a new position that included a promotion and a 37% raise and I was told that the way to enjoy life was to spend money – so I did.

I was told by my friends that I should buy heels (that I couldn’t walk in comfortably) and purses (that I rarely used). And after I spent money like a wild woman, I sat back and realized that the way I had spent it didn’t make me any happier.

So I figured out what actually made me happy. It turns out it’s spending time with the people I love and traveling the world in first class. So I put my money towards those things and even figured out how to do the latter without breaking the bank by getting into travel hacking. Based on my experience, I would suggest not listening to other people about what will make you happy and to figure that out for yourself – and then spend accordingly.

3. Don’t Wait

After you figure out what you want in life I would suggest starting down this path NOW. My partner introduced me to the idea of FIRE in 2013 – and then I ignored it for 2 years. Doing so is the biggest financial regret in my life.

Time in the market matters and I don’t want to calculate how much more I would have or when I could have exited the rat race if I had listened in 2013 instead of shutting down the idea.

Similarly, when talking about FIRE so many of my friends have told me over the years “oh I should look into that” and now that I’ve completed my journey to retirement after 5 years they suddenly ask “HOW?!” They could have been on this path with me the whole time. Just start and before you know it the time will have passed anyway.” “Purple” from A Purple Life, she/her

2. Grow the gap.

“There’s a lot of debate within the personal finance and FIRE communities about whether to earn more or spend less. Ignore that debate and think about growing the gap between the two. To spend less, pick the low-hanging fruit and plug the obvious leaks in your budget. Don’t get caught up in penny pinching – 80/20 your expenses and move on. Use your valuable mental bandwidth to figure out how to earn more instead. Michelle is great for that; she has a lot of recommendations for side hustles on this blog. Once you grow the gap between your income and expenses, then invest the gap. How? Invest in index funds, rental properties, or reinvest funds in your own business or side hustle.” – Paula Pant, Founder of Afford Anything

3. Start investing now.

“1) Invest as soon as possible. Too many people have heard the “you must have absolutely no debt” in order to invest, but that’s not true — especially if you get an employer match through your 401(k). Investing as soon as you can, even if it’s with a small amount of money, means less heavy lifting over time.

For example, I hit my goal of investing $100K at 25. Even if I never contributed another penny, I’ll have over $1.5 million by the time I’m 65 (retirement age.)

2) Don’t be afraid to job-hop. Company loyalty is a thing of the past, and you never have more sway than you do when you’re first negotiating your pay. I always tell clients: companies aren’t loyal to you, why be loyal to them? They’ll let you go, they’ll cut your hours, they’ll replace you — don’t let “loyalty” blind you from moving on to a higher-paying job.” – Tori Dunlap, Founder, Her First $100K

4. Know your why.

“I’ve been writing about financial independence and early retirement for over a decade now. In that time, I’ve come to believe that there are only two things you need to know about the subject.

First, there’s the math. Fundamentally, FIRE is all about creating a gap between what you earn and what you spend. The larger that gap, the quicker you’ll achieve financial independence (or any other money goal you might set for yourself). Folks who are serious about FIRE generally try to save half of their income — or more. But don’t sweat it if you can’t save half. Start where you are. Save what you can. Stick with it.

Second, there’s the psychology. Yes, the math of early retirement is important, but from my experience it’s the mental side of things that’s most difficult. Achieving this goal isn’t like running a sprint. It’s like running a marathon. It takes a long time. You’ll encounter obstacles along the way. And it’s a lot easier to overcome these obstacles if you have a REASON to overcome them, if you have a REASON for achieving financial independence. It’s not enough to want the money for its own sake. So, get clear on your purpose, on why it is you want to retire early.

So, that’s it. Before you jump in, know why you want to pursue financial independence. Then, once you make the leap, do whatever you can to increase the gap between your earning and spending. Those are the two keys to financial independence.” J.D. Roth at Get Rich Slowly

5. Design your ideal life.

“Oftentimes, I see people overemphasizing the financial aspects of FIRE (while simultaneously undervaluing their quality of life along the way).

The whole point of financial independence or early retirement is to live your absolute best life (which doesn’t necessarily require you to retire early). This is why I recommend ensuring that you focus on designing your ideal lifestyle alongside the savings and investments that will get you to FIRE.

First, start creating your vision of what your ideal life looks like. There are a number of steps you can take to create and refine your vision. You can reflect on your ideal day and week, think through your life’s peak experiences so far, start trying out new things, educate yourself on different flexible career options, and so many more.

Most lifestyle design options are available long before early retirement. So, once you’ve started to create your vision, you can figure out how to incorporate elements of your ideal life now and work toward making your vision a reality in the longer-term.

For example, our vision is to be location independent with a home base. We want to slow travel the country and the world, doing meaningful work, and sustaining strong friendships. Our goal is to make so many small shifts toward this ideal lifestyle so that when we finally hit our full FI number, we won’t need to change anything. We’ll already be living our ideal lifestyle.

Over the last two years, we’ve made small and steady shifts to make this a reality. I took a part-time job that would provide me with more free time to build my business. I built my business to a point where I felt comfortable quitting my job. Now, I’m focused on generating enough income in my business, so that Mr. Fioneer can quit his job and join me as a location independent entrepreneur.

We’ll be living our ideal lives years before reaching full FIRE.” – Jessica from The Fioneers

6. Calculate your FI number.

“Finding your FI (Financial Independence) number is the best place to start on a FIRE journey. Once you know your number, you have a concrete place to start creating a retirement plan. You can find your FI number by calculating your annual expense and multiplying that number by 25. This calculation doesn’t control variables like inflation or what your investments make, but it at least gives you an idea of what you’ll need. My FI number is $900,000, but I want to have a bit more than that because of inflation and medical expenses since I have a chronic illness. It’s important to account for things that may arise in your retirement years. Although you may not have a mortgage payment, you may have an expensive prescription you need to fill. I talk more about my top 10 investing for retirement tips here.” – Alexis at FITnancials.com

7. Review your financial numbers.

“One of the best ways to make progress with your money is to set aside an hour every month to review your financial numbers. Make it a fun date (even by yourself) to go over your money plan and goals, review last month and make adjustments. One of my favorite financial numbers to track is your “GAP” number. That is the difference between your monthly income and your monthly spending. Then each month come up with a way to slowly grow that GAP number by either reducing some expenses, doing a 30-day spending challenge (like no eating out for a month), or finding ways to increase your income or add new income. This monthly GAP number review will help you be more creative and intentional about growing that GAP number. You can put that money towards debt pay off, starting to save for retirement, or another big goal. Once you get your GAP number up to 30-60% of your income, you are well on your way to financial independence!” – Jillian Johnsrud at www.jillianjohnsrud.com

8. Our Wealth = Income + investments – lifestyle

“To reach FIRE, first understand the wealth-building equation. It looks something like this:

Our Wealth = Income + investments – lifestyle.

Building wealth is how we reach financial independence, and financial independence is an implicit requirement we need to hit before retiring early. FI means that we no longer need to earn an income to fully fund our lifestyle.

Our income is the first step in the process, but it doesn’t stop there. When our income is invested in appreciating assets (like the stock market or real estate), we build wealth quicker through the power of compounding interest.

But, the element that a lot of people forget about is lifestyle. The cost of our lifestyle (aka: our spending) reduces our wealth. The more that we spend, and the more debts that we hold, the lower our wealth and, therefore, the further we are from achieving FIRE.

The goal: maximize income + investments and minimize lifestyle spending. When combined, you will build wealth quickly, form healthy habits that won’t drain your pocketbook, and set you up to spend many decades of your life basking in the freedom of early retirement.” – Steve Adcock at SteveAdcock.us

9. Grow your income.

“Work to grow your income. For most people, this means to concentrate on their careers. Your career is a multi-million dollar asset (over the 30-40 years most people work) and if you nurture it, you can make it worth significantly more, which then fast-tracks your path to FIRE. From my experience there are seven proven steps to growing career income which, if implemented consistently over time, will result in substantial, extra earnings. After that, simply control your spending, bank the ever-growing difference, and you’re on a rocket ship to early retirement!” – ESI Money

10. Figure out what you really want out of life.

“My top tip for reaching FIRE is figuring out what you really want out of life. That doesn’t seem like financial advice on the surface, but when you dive into it, you can see how vital it is to your journey to financial freedom. How are you going to know what your FIRE number is if you don’t even know what you want? Instead of limiting yourself and sacrificing everything you enjoy on your quest for financial independence, figure out what your life goals are, and calculate your Fire number based on those goals. You may even come to realize that you need far less money than you originally thought, or that your FIRE lifestyle will include additional sources of income that you didn’t take into account. There’s another great reason for determining your life goals as well. If you just focus on the money goals without intentionally designing your post-work life, you will end up just as unhappy as you were when you were working. So instead, explore your passions and make sure you’re ready to live your life to the fullest upon reaching financial independence.” – Melanie from Partners in Fire

11. Cut back on your top three expenses.

“For those seeking financial independence and/or early retirement, my main advice is to figure out your top three expenses and cut back as much as you can on those. If you’re like most, your top three expenses will be housing, transportation, and food. If you can bring these expenses down and keep them down while still living a fulfilling life, you’ll save far more money than skipping $5 lattes and cutting coupons.

Most Americans have too much house, with rooms left unused or relegated to storing stuff. The average car purchase in America is now over $37,000, when a decent $10,000 used vehicle would meet the needs of most. And most people eat out way too much, draining their budget and compromising their health.

Get these “big three” expenses down, invest the savings in a broad low-cost index fund that tracks the overall stock market, and let compounding interest do its thing.” – Dave at Accidental FIRE

12. Geographic arbitrage.

“One of the most underreported strategies that help people achieve Financial Independence is Geographic Arbitrage. Basically, if people are able to work remotely and they physically move to a low-cost area (or even low-cost country), they can super-charge their savings rate because their cost of living goes down while their earnings do not.

Prior to the pandemic, this was a relatively rare situation as most jobs require you to be in the office by default, but now that companies have been forced to adopt a work-from-home policy, the potential for geographic arbitrage has opened up for a lot more people.

Working remotely may not be for everyone, but if you can, try to make it permanent once this pandemic is over, especially if your job was located in an expensive city like San Francisco or New York City. By relocating to a low-cost country like Mexico or Thailand, you may find yourself changing from just barely scraping by financially to saving so much money you don’t know what to do with it all!” – Kristy Shen and Bryce Leung are authors of the best-selling book Quit Like a Millionaire and founders of the blog Millennial Revolution

13. Think about your why and how.

“Financial independence and philosophy are closely related. So, to achieve financial independence, the first actionable tip I would recommend is to think about why you want to reach FIRE. Then, think about how you want to spend your time once you reach financial freedom.

By thinking about why you want to retire early and how you want to spend your time, you can properly build the framework for your own version of financial independence. Because there isn’t just one way to FIRE.

For example, if you save 50% of your income, you can afford to take one year off for every two years you work. Alternatively, you could consider the slow FI route if you prefer a more balanced journey. Or, you could consider Barista FIRE and work a part-time job to have more time now.

Personally, I’ve tested out a one year mini-retirement and Barista FIRE. I prefer Barista FIRE because it allows me to gain more time now but I still enjoy the lifestyle I want.

On average, I work 17 hours per week now at my part-time job and I am fortunate to work this job from home. During the rest of the week, I invest, blog, and work on building other income streams. Based on my experience, Barista FIRE is the perfect alternative solution to financial independence.

Keep in mind, though, that financial independence begins with putting yourself in the right financial position. To put yourself in position, simply keep your expenses low and start paying yourself first.

If you are diligent enough with your savings and if you keep your expenses low, you will begin to open up other options. Suddenly, taking on a part-time job won’t seem so intimidating.

Moreover, I would recommend that you build additional income streams by side hustling or investing. My side income streams are blogging and dividend investing.

If you keep your expenses as low as possible, pay yourself first, and build additional income streams, you will be well on your way to financial independence in no time.” – Graham at Reverse the Crush

14. Calculate your net worth.

“FIRE isn’t just for the young ones! There is a community of late starters, those of us who start on our FI path in our 40s and 50s and hope to retire early(ish).

Retiring earlier than the traditional retirement age of 65-67 is a bonus!

Start by calculating your net worth – this will tell you your financial position. For example, I discovered that the majority of my net worth was tied up in my house and superannuation (Australian retirement account).

Unfortunately, I can’t access my retirement account until aged 60. Therefore, if I aim to retire at 55, I need to start investing outside my superannuation.

The way ahead is simple, but not easy. We need to come up with extra money to invest and/or pay off our debt. The ‘formula’ is the same for everyone, regardless of age. And compound interest still works, even in our 40s and 50s.

Increase the difference between your expenses and income and invest this difference wisely.

Increasing income may be a bit difficult at our stage of life. Many of us are earning our peak incomes now. And burnout is a real concern. Negotiating a pay rise may mean more responsibilities. Taking on side hustles may not be palatable either, especially when free time is already scarce.

Reducing expenses is something we can start doing immediately – no, there is no need to eat rice and beans at every meal 🙂 But most of us have succumbed to lifestyle creep over the years. As our incomes have risen, so has our taste and lifestyle improved to match our higher incomes. Therefore, the good news is we may have a lot of expenses that we can trim.

I am a spender at heart. For me, tracking my expenses and learning to spend mindfully have made a huge difference. Learning what I value in life and what I don’t also means I am happy to spend on what brings me joy such as travel, but not on what I don’t care about such as clothes.

Taking action consistently is the most important step to reaching FI.

It is never too late to start.” – Latestarterfire

15. Look at financial independence as a journey not just the goal.

“I think that everyone should work towards financial independence, because you can’t reach the ultimate goal of financial independence without becoming more financially aware, confident, consumer debt-free, etc. When you begin to look at Financial Independence as a journey not just the goal, you’ll be able to experience financial freedom while on the journey.

You also don’t have to wait to experience joy and freedom in your life until reaching complete Financial Independence. You can decide to slow down or accelerate the time it takes to reach your goals based on the things you value, how you want to spend your money & time. If you value certain experiences and/or things, make room for it in your budget. It’s ok to spend or rather invest in the things that matter to you and investing doesn’t have to be limited to investing in the stock market or real estate market. You can reframe investing to mean you are investing in your happiness, saving time and skills. You are your best asset.” – Jamila Souffrant from Journey To Launch

16. FIRE is not a race.

“First of all, Financial independence Retire Early (FIRE) is not a race. Don’t compare your FIRE journey with other people, because everyone has different circumstances. Don’t put FIRE on a pedestal and don’t see FIRE as the end goal.

To be specific, early retirement isn’t all about travelling around the world, leaving the 9-5 rat race, saying FU to the employers, and sipping pina colada on the beach. No matter what you do and where you go in retirement, you are still you. So, if you’re not happy about your life now, reaching FIRE won’t magically make you happy. It is vitally important to work on yourself while you’re on the FIRE journey.

For FIRE, the concept is quite simple. It is all about spending less than you earn, invest the money you saved, and let that money grow. You want your money to grow and create a passive income stream. Once the passive income stream exceeds your expenses, you are financially independent and can retire early if you choose to.

Now there’s a misunderstanding that FIRE is all about penny-pinching and reduce your expenses to as low as humanly possible. But that is not true and completely unsustainable. Rather than penny-pinching, I believe in a more balanced approach. It’s OK to spend money on things that you enjoy and cut your spending on things that you do not enjoy. For example, if you like making nutritious food yourself, spend money on high-quality food. If you enjoy travelling, spend money on trips and enjoy the experience. If you don’t enjoy shopping, then cut that expense!

Again, please don’t see FIRE as a race. See FIRE as a life journey. Enjoy this journey!” – Bob from Tawcan.com

17. Focus on all aspects of your FIRE journey, not just on money.

“The nuts and bolts of financial independence include more than numbers and calculators. There are just as many personal and emotional things to figure out. So here’s our advice: Focus on all aspects of your FIRE journey, not just on money.

1. Don’t assume 4% is a safe withdrawal rate, or that someone else’s FIRE number will work for you. Build your own numbers based on your circumstances and life plans.

2. Create a personal plan for your FIRE journey and life after retirement. Think about where you’ll live, who and what your life will include, and what it will take to get there.

3. The FIRE path can be isolating. Find a community to talk to about your finances, plans, hopes and dreams, and all of your fears and concerns too. You’re going to need support and encouragement along the way.

4. Keep an open mind… All Options Considered!” – Ali & Alison Walker from All Options Considered

18. Increase your income as much as possible.

“All the frugality in the world can’t make up for an inadequate income. It’s just math: A person bringing home $25K a year is going to take longer to reach FIRE than someone making $100K a year. Even if they’re using the same hyper-frugal savings tactics to live on $15K a year! The person with the higher income is going to be able to sock away more money and benefit from compound interest on a much faster scale. So if financial independence is your goal, focus your energies on increasing your income as much as possible as quickly as possible. This isn’t to say you shouldn’t be frugal–because you absolutely should, ya filthy animal!–but you can only reduce your spending so much. Your earning potential is virtually unlimited. This is the magical truth hidden between the lines of every “How I Saved $100K in One Year” article on the interwebz.” – Kitty and Piggy, Bitches Get Riches

19. Have a goal that is not related to money.

“Set a goal that’s not money-related. Figure out what you want to retire TO and start working toward that lifestyle. Yes, you need to focus on your finances, but without a clear destination, years of saving and investing can start to feel like a slog. Having a FIRE dollar number is important, but it’s not the only thing you need to focus on. After you reach your FIRE number, you need to know what you want to do with your other precious resource: your time. Plus, putting energy into planning for, and researching, your new life is a great way to productively pass the time while you’re working toward FIRE. When you know what you want to do with your time, it becomes a lot easier to figure out what to do with your money.” Mrs. Frugalwoods, www.frugalwoods.com

20. Think about what you want your life to look like.

“Reaching FIRE looks a little different for each person, but the basics are the same. The first step is to figure out what you’d like your life to look like. Spend a little time daydreaming and what-if-ing.. Then estimate the future costs involved with the life you’d like, including healthcare. It’s smart to add in extra for uncertainty.

The more you want to spend, the bigger your FIRE number will be.

Once you have a spending number in mind, you’ll need to find a way to generate that amount each year so that Future You doesn’t need to work. You can use the Rule of 25 and the 4% Rule to get an idea of how much you might need invested and what could be a safe withdrawal rate. You can also use other types of passive income (such as rental income) to bring in money each year, which is the route I’ve gone.

If you aren’t sure how you’ll ever have enough invested, it’s ok to start small and build from there. For example, you could start by increasing the amount you send to your 401k until you’re maxing it out. Or you could make a goal to own your first rental property, and focus on setting aside money for that. Paying down debt can help as well, because it can dramatically reduce your expenses. Every little bit is a step in the right direction.” Jackie, owner of CampFIREFinance.com

21. Focus on earning more money from the start.

“The biggest piece of advice I can offer anyone working toward FIRE is that you need to focus on earning more money from the start. This is how you affect some serious change in your financial life.

Think about it like this: what expenses cost you the most money? It’s debt for a lot of people — credit cards, student loans, a mortgage, etc. Making more money is the fastest way towards paying off that debt, and once your debt is paid off, you can start putting more towards your FIRE number.

The other great thing about finding ways to make more money is that you don’t have to choose between paying off debt and investing — you can do both. So you start growing that long-term stream of wealth (investing) while also making short-term changes to save money. You’re basically attacking your finances from both ends.

I’m not against doing things that cut your weekly budget, like eating out less or cutting cable. That money adds up, but most of the people who have reached FIRE have also earned significant salaries as well. Making more money by side hustling, starting an online business, asking for a raise, etc. — those are tools to help you reach your financial goals faster.” – Bobby at Millennial Money Man

Are you interested in financial independence, retire early? What are your best early retirement tips?

Source: makingsenseofcents.com