homes

Apache is functioning normally

With 2024 right around the corner, it’s time to look ahead at home decor trend forecasts so you can bring fresh new details into your home.

That’s why “Good Morning America” lifestyle contributor Lori Bergamotto took an in-depth look at the best ways to test out some of these trends for yourself before you decide to dive in with larger investment pieces.

Using resources like Apartment Therapy, Pinterest, Domino Magazine and Architectural Digest, Bergamotto uncovered fantastic ideas for small interior facelifts that utilize trends like scalloped edges, kitschy kitchens and chrome details to liven up your house.

Keep scrolling to find everything you need to give your home a new look!

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Scalloped detail

Apartment therapy reports wavy, scalloped edges are a great way to participate in the “pattern-meets-silhouette” trend for the coming year. While many household items tend to have straight edges — think towels, tables, etc. — these details soften the edges in a room and, with items like this natural jute rug or dainty sheet set, offer an easy way to try out the trend before potentially committing to a larger piece down the line.

Shubhlaxmifashion Scallop Pattern Natural Jute Bohemian Area Rug Hand Woven Reversible 2′ x 3′

Pottery Barn

LoveShackFancy Embroidered Scallop Sheet Set

  • $99 to $179

  • Pottery Barn

Kitsch’en

According to Pinterest, kitchens are gaining steam as the star room of the home, with eclectic kitchen decor taking collective precedence and leaping 50% in online searches over the past few months.

Domino Magazine predicts the No. 1 way to express this trend will be through the kitsch: the campy, eccentric design concept that has taken a backseat to more minimalistic homes over the past several years. Searches for the term are up 75%, meaning 2024 will see the return of colorful, funky touches throughout the home.

A low-stakes way to incorporate kitsch is with kitchenware! These Anthropologie plates are adorable, affordable and would provide the perfect backdrop for any retro dishes you have bookmarked and are ready to try — Bergamotto recommends Baked Alaska.

Anthropologie

Adley Glass Dessert Plates, Set of 4

  • Anthropologie

Anthropologie

Nathalie Lete Heritage Dinner Plate

  • Anthropologie

Corduroy

The trendsetting, trade-only High Point Market was reportedly rife with corduroy accents for this year, a move that was echoed by Architectural Digest’s claim that the fabric is going to be a mainstay for 2024. While couches were the piece du jour at High Point, replacing your furniture yearly is not exactly a convenient way to experiment with the trend!

Try these beautiful throw pillows instead. They come in 33 colors and cost under $15 each.

Home Brilliant Cream Pillow Covers, 18inch x 18inch

Chrome

Another prediction from Architectural Digest is chrome, a simple way to add “smooth surfaces that shimmer so the vibe isn’t sterile” to your abode. While it works beautifully in large-scale pieces, try it in smaller doses with this fun mushroom lamp or accent table to add some edge to any room.

EdensDECOR Silver Mushroom Decor Table Lamp

Deco 79 Aluminum Tray Inspired Top Accent Table with 3 Tripod Legs, 16″ x 16″ x 25″ Silver

Source: goodmorningamerica.com

Apache is functioning normally

Well, another year is nearly in the books, which means it’s time to look ahead to what the next 365 days have in store.

While 2022 felt like it couldn’t get any worse, 2023 surprised all of us by being an even rougher year.

Thanks to the highest mortgage rates in nearly a century, loan origination volume ground to a halt, as did home sales.

The only real bright spot was new home sales, though builders had to make some big concessions to unload their inventory.

So what does 2024 have in store? Well, the good news might just be that the worst is finally behind us.

1. Mortgage rates will drop below 6% (and maybe even 5%)

First things first, mortgage rates. While I (and many others) expected mortgage rates to fall in 2023, they defied expectations.

Rates began the year 2023 on a downward slope, but quickly reversed course and surpassed 7% by spring. Then things got even worse as rates climbed beyond 8% in October.

However, inflation has since cooled and economic reports continue to signal that the worst of it could be over.

The Fed has also gotten on board, with their latest dot plot signaling rate cuts for 2024. After raising rates 11 times in less than two years, there could be three or more cuts next year.

While the Fed doesn’t control mortgage rates, their monetary policy tends to correlate. So if they’re cutting rates due to a cooling economy, mortgage rates should also fall.

We’ve already seen mortgage rates ease in anticipation, and they’re expected to go even lower throughout 2024.

This should be helped on by normalizing mortgage rate spreads, which remain about 100 basis points above typical levels.

In my 2024 mortgage rate predictions post, I made the call for a 30-year fixed below 6% by next December.

The way things are going, it could come sooner. And rates could go even lower, potentially dropping into the high-4% range if paying discount points.

2. Homeowners will refinance their mortgages again

I expect 2023 to go down as one of the worst years for mortgage refinances in history.

Interest rates increased from around 3% in early 2022 to over 7% in about 10 months.

Then continued their ascent higher in 2023, meaning very few homeowners benefited from a refinance.

However, two things are working in homeowners’ favor as we head into 2024.

There were about $1.3 trillion in home purchase loan originations during 2023, despite it being a slow year.

And rates have since come down quite a bit from what could be their cycle highs.

If we consider all those high-rate mortgages that funded over the past year and change, we might have a new pool of refi-eligible borrowers, as seen in the chart above from ICE.

It’s also easier to be in the money when refinancing a high-rate mortgage since the interest savings are larger.

So I expect more rate and term refinances in 2024 as homeowners take advantage of recent mortgage rate improvements.

In addition, we might see homeowners tap equity via a cash out refinance if rates keep coming down and get closer to their existing rate.

Refi volume is forecast to nearly double, from around $250 billion this year to $450 billion in 2024.

3. Mortgage rate lock-in will be less of a thing

With less of a gulf between existing mortgage rate and potential new, more homeowners may opt to list their homes for sale.

One of the big stories of 2023 was the mortgage rate lock-in effect, whereby homeowners were deterred from selling because they’d lose their low mortgage rate in the process.

But if the 30-year fixed gets back to the low-5% range, or even the high-4s, more homeowners will be OK with moving.

This is one part affordability, and another part caring less about their low-rate mortgage.

Very few are willing to give up a 3% mortgage rate when rates are 8%+, but the story will change quickly if and when rates start with a 5.

The chart above from Freddie Mac quantifies the value of a low-rate mortgage.

Aside from allowing people to free themselves of their so-called golden handcuffs, it will also increase existing home sales.

The big question is will it increase available supply, or simply result in more transactions as sellers become buyers?

4. For-sale inventory will remain limited

While I do expect more sellers in 2024, at least when compared to 2023, it might not move the needle on housing supply.

The big story for years now has been a lack of available for-sale inventory. Everyone expected home prices to crash when mortgage rates more than doubled.

Instead, home prices went up because of simple supply and demand. There just aren’t enough homes for sale in most markets nationwide.

As such, prices have defied logic despite worsening affordability. Demand is low but so is supply. And I don’t expect things to get much better.

At last glance, months of supply was around 3.5 months, per Redfin, below the 4-5 months considered balanced.

Sure, lower rates and sky-high prices can get stubborn home sellers off the sidelines. But guess who else is waiting? Buyers. Lots of them who may have been priced out due to 8% mortgage rates.

In the end, it might be a zero-sum game, at least in terms of inventory as more sellers are met with more buyers.

Of course, it will be good for real estate agents, loan officers, and mortgage brokers thanks to a greater number of transactions.

5. Home prices may go down despite lower rates

Lately, there’s been a lot more optimism in the real estate market thanks to easing mortgage rates.

In fact, some folks think the boom days are going to return in 2024 if the 30-year fixed continues to trend lower.

While I’ve constantly pointed out that mortgage rates and home prices don’t share an inverse relationship, it doesn’t stop people from believing it.

Sure, the logic of falling rates and rising prices sounds correct, but you’ve got to look at why rates are being cut.

If the economy is headed toward a recession, even a mild one, home prices could also come down, despite lower interest rates.

Similar to how rates and prices rose in tandem, the opposite scenario is just as possible.

However, because rates are only expected to come off their recent highs, and only a small recession is projected, I believe home prices will continue to increase in 2024.

Interestingly, they may not rise as much in 2024 as they did in 2023, and could even fall in many markets nationwide.

Both Redfin and Zillow expect home prices to fall next year, by 0.2% and 1%, respectively. Fannie Mae is also a bit bearish, as seen in the chart above.

I’m a bit more bullish and believe home prices will climb 3-5% nationally. But this still feels like a modest gain given recent appreciation and the lower rates forecast.

6. The bidding wars won’t be back in 2024

Along the same lines as home prices stumbling in 2024, I don’t expect bidding wars to make a grand return either.

The narrative that lower mortgage rates are going to set off a feeding frenzy seems overly optimistic.

And even flat out wrong. Remember, affordability is historically terrible thanks to elevated mortgage rates and high home prices.

Just because rates ease to the 6s or 5s doesn’t mean it’s a seller’s market again. If anything, it might just be a more balanced market that allows for more transactions.

A lack of quality inventory will continue to plague the market and buyers will still be discerning about what they make offers on.

So the idea of getting in now before it’s too late will be misguided as it typically is. If you’re a prospective buyer, remain steadfast and don’t rush in for fear of missing out.

You might even be able to get a deal if you’re patient, including both a lower interest rate and sales price in 2024.

7. Home sales will increase slightly but remain depressed

Similar to mortgage rates peaking in 2023, I believe home sales may have bottomed as well.

NAR reported that November’s pending home sales were flat from last month and down 5.2% from a year ago. But things could begin to turn around in the New Year.

This means we should see home sales tick up in 2024, though not by much thanks to continued inventory constraints.

Remember, mortgage rates will remain at more than double their 2022 lows, despite some improvements from recent levels.

And while home builders have ramped up construction, there are still few homes available in most markets nationwide.

Most forecasts expect existing home sales to barely budge year-over-year, from maybe just below 4 million to just above.

Meanwhile, newly-built home sales may be relatively flat as well, perhaps rising from the high 600,000s to over 700,000 in 2024.

This will hinge on the direction of mortgage rates. The lower they go, the more sales we’ll likely see.

So things could turn out rosier than expected, though still quite low historically until the inventory picture changes.

8. Home equity lines of credit (HELOCs) will get more popular

The Fed doesn’t raise or lower mortgage rates, but its own rate cuts directly impact rates on home equity lines of credit (HELOCs).

With several rate cuts expected between now and the end of 2024, HELOCs are going to become more and more attractive.

In fact, the latest probabilities from the CME have the Fed cutting rates by 1.5 percentage points by December.

So someone holding a HELOC today will see their rate fall by the same amount, as the prime rate moves in lockstep with the fed funds rate.

For example, a HELOC set at 8% will drop to 6.5% if all pans out as expected.

And because most homeowners still hold 30-year fixed mortgages with rates of 4% or less, they’ll opt for a second mortgage like a HELOC or home equity loan.

If the trend continues into 2025, these HELOCs will be a cheap source of funds to pay for home improvements, college tuition, or even a subsequent home purchase.

All while retaining the ultra-low rate on the first mortgage.

9. More buyers and sellers will negotiate real estate agent commissions

You’ve heard about the many real estate agent commission lawsuits. And changes are already on the way as those cases move along.

While both agents will still get paid to represent buyer and seller, there should be greater transparency in how they’re compensated.

And we may see some different methods of remitting payment. For example, a home seller paying the buyer’s agent directly, not on the listing agent’s behalf.

Of course, this could just result in different paperwork and no real change for the buyer or seller.

However, agents will likely be more transparent about the ability to negotiate, and this could be the key to saving some money.

Instead of being told the commission is 2.5% or 3%, they may tell you that’s their rate, but it’s negotiable.

This could result in home buyers and sellers paying less and/or receiving credits for closing costs.

It’s a step in the right direction as many consumers weren’t even aware these fees could be haggled over.

In the end, it should get cheaper to transact but you’ll still need to be assertive and make your case to receive a discount.

10. The housing market won’t crash

Finally, as I’ve predicted in past years, the housing market won’t crash in 2024.

While we are continuing to experience an affordability crisis of epic proportions, the speculative mania isn’t as pervasive as it was in the early 2000s.

And we can continue to thank the Ability-to-Repay/Qualified Mortgage Rule (ATR/QM) for that, as the screenshot from the Urban Institute illustrates.

After the early 2000s mortgage crisis, many types of exotic mortgages were banned, including interest-only home loans, neg-am loans, and even loans with mortgage terms over 30 years.

At the same time, lenders have to ensure a borrower has the ability to repay the loan, meaning no doc loans and stated income are mostly out as well.

While there are non-QM loans that live outside these rules, they represent a small share of total volume. And the minimum down payments are often 20% or more to ensure borrowers have skin in the game.

Interestingly, it is FHA loans and VA loans that are experiencing the biggest uptick in delinquencies, though they remain low overall.

Even if we see an increase in short sales or foreclosures, we’ve got a severe lack of inventory due to demographics and underbuilding for over a decade.

This explains why home prices are unaffordable today, and also why they’ve remained resilient.

A scenario likelier than a crash would be stagnant home price growth for a number of years, with inflation-adjusted prices potentially going negative at times.

But major declines seem unlikely for most metros nationwide. In the meantime, a combination of wage growth and moderating mortgage rates could make homes affordable again.

Source: thetruthaboutmortgage.com

Apache is functioning normally

In his 20 years in mortgage banking, no year has compared to 2023 in terms of difficulty, said Ben Cohen, Guaranteed Rate’s managing director and a top-producing loan officer. 

“This is a lot different than 2008 where you needed a credit score and a heartbeat to get a mortgage. Now, you need to be very qualified in order to get a mortgage,” he said. 

Coming off of the pandemic banner years, thinning origination volume, low inventory and soaring home prices made business much harder to come by for LOs in 2023. It was another brutal year, pushing loan originators to work longer hours, close loans faster while diversifying their mortgage product offerings. 

According to data from Ingenius, tens of thousands of loan officers exited the industry in 2023. In October, 67% of current LOs produced less than one unit of closed loans in October. An additional 21% closed 1.5 units per month and only 12% closed greater than 2.5 units.

With the Federal Reserve signaling interest rate cuts in 2024, mortgage rates are expected to trend lower going forward. But the industry was on a roller coaster with rates climbing near 7% in February and hitting 8% in October as the central bank battled to bring down high inflation.

LOs had to fight an uphill battle of targeting the purchase market in an environment with a rate ‘lock-in’ effect, go after first-time homebuyers and offer customized solutions to bring down monthly mortgage payments. 

“Every single client scenario is different,” said Hunter Marckwardt, executive vice president of CrossCountry Mortgage. “[The year] 2020 and 2021 was all about how quickly a lender could execute. To me, 2023 is really all about understanding a buyer’s motivation and ability to qualify, and then determining where to go from there.”

Wrapping up the year, HousingWire analyzed some of the key factors that defined 2023 for loan originators and how they stayed competitive. 

Rate ‘lock-in’ effect 

By some measures, it was always going to be a difficult year for originators. According to Black Knight data, 40% of all U.S. mortgages were originated in 2020 or 2021, when the pandemic drove borrowing costs to historic lows. The customer pool by 2023 had already shrunk dramatically.

And about 90% of mortgage holders had a rate that was less than 6%; some 80% with a rate less than 5%; and almost a third had a rate less than 3%, meaning refi opportunities would be hard to come by.

Having already secured a mortgage with a sub-4% rate, homeowners were highly reluctant to sell their homes and move into another property. 

“All things generally equal, and you’ve just wanted a little bit of a bump in the quality of your home, you’re not moving based on the difference in payments,” said Marckwardt. 

The so-called mortgage rate ‘lock-in’ effect gave homeowners an incentive to stay put, preventing more housing supply from reaching the market.

“We’ve seen a consistent theme of potential sellers – many with first-lien rates a full 3 percentage points below today’s offerings – pulling back from putting their homes on the market,” said Andy Walden, Intercontinental Exchange, Inc. (ICE) vice president of enterprise research.

“The inventory puts a cap on how much business we can do. When loan officers don’t have refinance business, half of their businesses are gone,” said Andrew Marquis, regional vice president at CrossCountry Mortgage, in a previous interview.

The lack of inventory led to rising home prices, creating multiple-offer situations in some parts of the country. It all put more pressure on affordability. 

“I’ve got several pre-approvals out there where people just can’t find what they want and the rates are throwing them off,” Don Monson, branch manager at Sente Mortgage, said of the challenges he faced in 2023. 

Targeting first-time homebuyers

Those who catered to first-time homebuyers’ needs – offering Federal Housing Administration (FHA) loans and down payment assistance loans – fared relatively well compared to other colleagues who didn’t expand their target clients.  

“Loan officers, myself included, who have worked a lot with first-time buyers and have working knowledge of various programs – whether it be FHA, Home Ready/Home Possible, bond programs (DPA/grant programs). They are staying busy relative to the market,” said Michael Ullmann, producing branch leader at Movement Mortgage.

About half of Ullmann’s production in 2023 came from VA and FHA loans as well as mortgages that require down payment assistance. Most years that number is closer to 30%, said Ullmann, who’s been an LO since 2012.

Borrowers extended their qualifications beyond where they would have been in the past at lower interest rate environments, choosing FHA loans that have more lenient qualification requirements than other loans. 

“Today, in a higher interest rate environment, they (borrowers) might be pushing the limit to a 45 or 50% DTI ratio to achieve the same type of home in a higher rate environment,” said Steve Miller, branch manager and senior loan officer at Embrace Home Loans.

Mandatory mortgage insurance premiums were reduced to 55 basis points (bps) for most borrowers in February, and FHA loans tend to come with lower interest rates than conventional loans while the difference in interest rates could often be offset by the greater number of fees — including the MIP charges.

A myriad of down payment assistance programs — offered through state housing finance agencies, cities and counties — made it possible for some first-time buyers to stop renting and own a home without a large down payment. 

With origination volume thinning, nonbank lenders also rolled out DPA programs where the lender would cover 2% of the required 3% minimum down payment on a conventional loan.

Due to lack of origination volume and higher rates, mortgage lenders are “pushing the envelopes again,” said Bill Gourville, president at Atlantic Coast Financial Services. 

“They in the past shied away from just because there was other volume to be had. So they’re consistently pushing the envelope on programs that have technically always been available by agencies – Fannie Mae, Freddie Mac, FHA and VA – but now they’re rolling it back out,” Gourvill explained. 

Lowering monthly mortgage payments  

“The biggest factor and the biggest pain point that the consumers are having is what they’re willing to pay per month,” said Adrian Gastelum, senior vice president and branch manager at Nova Home Loans. 

“So when I look at what’s deterring clients right now, is sticker shock,” Gastelum added. 

As buyers’ affordability got crushed with elevated rates, homebuyers demanded that their loan originators provide options to lower monthly mortgage payments.

Temporary rate buydowns – a product that lenders started rolling out in 2022 – often made more sense for buyers planning to live in the home long term as they are more likely to have a refi opportunity during that time period. 

While a seller-funded temporary buydown may not be available depending on how hot market conditions are, builders are more willing to provide these concessions as they are more incentivized to fill up new inventory. 

“If buyers wanted to get a new build, this is definitely a good time to get a new build even with rates being a little bit higher because they’re going to come back down at some point and then you can just refinance,” said Simon Herrera, a loan officer at Highlands Residential Mortgage.

“Sellers are funding temporary rate buydowns but It’s really kind of a case by case. Builders for sure are doing it,” Herrera noted. 

Some borrowers were more comfortable permanently buying down points as they preferred predictability when it came to making monthly mortgage payments. 

“I let them know their options. These are the options you can do and here are the pros and cons of this (…) About 90% of the conversation we’re having, [I’m hearing] we don’t want to look at something temporary. We want to make sure we know what our payments are going to be,” said Jared Sawyer, a sales manager at loanDepot.

Nurturing referral partners, training agents 

Mortgage origination volume for 2023 are expected at around $1.64 trillion, according to the Mortgage Bankers Association (MBA). About 80% of that figure, or $1.32 trillion, are projected to be purchase origination. 

To go after the purchase market, LOs prioritized focusing on nurturing relationships with real estate agents — their main referral partners.

“People always know people [who are] buying. People always have friends doing something — and people [are] becoming investors buying second homes, third homes — so it’s just good to stay in front of them, because you don’t realize until you look back on how many people you actually probably lost by not staying in front of them,” said Christopher Gallo, senior vice president and mortgage consultant at CrossCountry Mortgage

“We look to follow up with those agents, invite them to lunches or dinners, coffee, etc. It’s all about the referral partner positioning. How can you make them look good in their business? Because ultimately, they want to be able to close more business, and you have to be an ally in that process. That’s the tactic that we take.” Marquis said.

Educating referral partners is key, which is why Cohen started a newsletter in March so partners can speak at a high level of what’s going on in the market. He sends them weekly updates on Fridays detailing the trends in interest rates and home prices.

“The wonderful thing about my business is everybody is a referral source, whether it’s a past client [or] a neighbor,” said Cohen.

Source: housingwire.com

Apache is functioning normally

Many Americans are finding tiny houses, or those that measure several hundred square feet in size, are a welcome way to live. They can be both economical and eco-friendly, and some people say they simplify life, which can bring many benefits.

If you’re curious about tiny houses or are currently contemplating one, it’s important to know that financing these dwellings may be different than securing a traditional mortgage. Here’s a guide to tiny houses and how to secure funds to buy or build one.

What Is a Tiny House?

A tiny house is often defined as a home that is between 100 and 400 square feet. In contrast, the median size of a single-family American home is currently 2,014 square feet. That’s five times bigger than the biggest tiny home. Here are some other facts to know about this kind of dwelling.

•   Owners live in their tiny homes themselves, rent them out, use them as a small vacation home or even build them as an accessory dwelling unit (ADU) on the same lot as their primary residence. Tiny homes may be on wheels, or they may sit on a fixed foundation.

•   Prefab homes can be delivered complete to the site, or there are modular homes that require some assembly on site. Those who would rather build their own house can hire an architect or draw up plans to their own specifications. There are small homes in all kinds of styles, from a classic Colonial or Victorian to a ranch style or A-frame or ultra-modern design.

•   Local zoning rules will determine whether or not a person can build or move into a tiny home. And building codes will determine things like ceiling height.

•   Tiny houses may not have good resale value since they are such a specific type of home and are often highly customized. Before buying a tiny house as an investment property, it might be wise to consult a real estate investment professional.

💡 Quick Tip: Before choosing a personal loan, ask about the lender’s fees: origination, prepayment, late fees, etc. One question can save you many dollars.

Tiny House Pricing

In 2023, the average sales price for a single-family home was about $430,300. Tiny homes cost quite a bit less, with an average of $45,000. That price can vary up and down depending on the size of the home, materials used, and amenities (yes, some tiny homes have luxe, spa-style bathrooms, for example). The price of the building is not the only thing to consider.

Buyers of tiny homes must factor in the price of buying or leasing land on which to place the home if they don’t already own it, as well as the cost of hooking it up to utilities.

If the tiny home is on a foundation, there may be state and local property taxes to pay. If the tiny house is on wheels, though, there likely won’t be property tax assessed.

Recommended: Is Buying a House a Good Investment?

Financing the Land

If property needs to be purchased to have a place to put a tiny home, an option for financing is a land loan. There are three types of land loans: raw land loans, unimproved land loans, and improved loans.

•   Raw land loans are for land that’s completely undeveloped with no electricity, roads, or sewer access.

•   Unimproved land loans are for properties that have more access to amenities like utilities, but lack utility meters.

•   Improved land loans are for land with access to roads, water, and electricity.

The size of the down payment and the interest rate of the loan will depend on what type of loan is needed. For example, lenders may consider raw land to be a riskier option than improved land and require a bigger down payment and higher interest rates.

Mortgages for Tiny Homes

Qualifying for a home loan for a tiny home may be tricky. Some lenders may not be willing to offer first or second mortgages for tiny home financing. However, if a tiny home has a foundation and complies with local building codes, it may qualify for certain mortgages.

Tiny homes may also qualify for what is known as a “chattel mortgage,” a mortgage for moveable personal property. The tiny home acts as security for the loan, and the lender effectively becomes the owner of the tiny home until the loan is paid off and ownership is transferred back to the borrower.

This differs from traditional mortgages that are secured by a lien on the property. Because the size of the loans are typically small, chattel mortgages may have relatively short terms, though interest rates may be relatively high.

Personal Loans

A personal loan can allow individuals access to money that they can use for any personal, family, or household purpose, from paying off credit cards to an effective tiny house loan. Depending on the lender, loan amounts can range from a few thousand dollars to $100,000. When the applicant is approved for a personal loan, they’ll receive the loan amount in a lump sum and pay it back in installments with interest.

Personal loans may be secured or unsecured. Unsecured loans are not backed with any collateral, and the interest rates currently range from about 6% to 36%, depending largely on the borrower’s credit score.

Secured loans are backed by collateral, such as personal savings, a car, or another home owned by the same borrower. They typically come with a lower interest rate than their unsecured counterparts. However, it’s important to note that if a personal loan is defaulted on, the borrower’s assets could be seized by the lender to repay the debt.

Home Equity Loans

The equity someone may have built up in a home they already own can be tapped to finance a tiny home for use as a vacation home, rental property, or ADU. A home equity loan is a fixed amount of money secured by a borrower’s home.

Usually, up to 85% of the equity accumulated in a home can be borrowed, though actual loan amounts will also depend on the applicant’s income and credit history. The home equity loan is repaid with monthly payments over a fixed term. And if the borrower fails to repay, the lender can foreclose on the house.

A home equity line of credit (HELOC) may be another option to finance a tiny home. HELOCs differ from home equity loans in that the borrower doesn’t receive a single lump-sum payment from the lender.

Rather, a HELOC gives the borrower access to a line of credit that can be drawn down, paid back, and drawn down again, if need be, within a certain time period. The HELOC is secured by the borrower’s home, so as with a home equity loan if the debt is not paid, the lender can use the home as collateral.

Loans From Tiny House Builders

A tiny house builder or contractor may be able to help secure financing through unsecured loans based on an applicant’s credit score, or secured loans backed by the value of the tiny home. These tiny-house loans may have longer terms and lower starting interest rates than personal loans, but they may require a downpayment.

RV Loans

If the tiny house has wheels and is certified as an RV by the Recreational Vehicle Industry Association, an RV loan may be another option for financing. Online lenders, banks, and credit unions may all offer RV loans. In many cases, the tiny house will serve as collateral for the loan, the same way a car would serve as collateral in an automobile loan.

Recommended: Guide to Buying, Selling, and Updating Your Home

The Takeaway

If you’re in the market for a tiny house, you may need to think beyond traditional mortgages. Home equity, HELOC, and personal loans, among other options, may be available forms of financing that can set you on your way to owning the tiny house of your dreams.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi’s Personal Loan was named NerdWallet’s 2023 winner for Best Online Personal Loan overall.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOPL1223025

Source: sofi.com

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CAAS, TPO, Tech, LOS Products; Fitch on First American’s Hack; Freddie and Fannie Forecasts

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CAAS, TPO, Tech, LOS Products; Fitch on First American’s Hack; Freddie and Fannie Forecasts

By:
Rob Chrisman

Wed, Dec 27 2023, 10:54 AM

Susan Toste writes to Ira Selwin who sends me (see how these things work?), “Can you believe it is 364 days until Christmas and people already have their lights up?” Goldman Sachs asks interviewees, “How many square feet of pizza are eaten in the U.S. each year?” (The trick is to work through the logic, not necessarily come up with the right answer.) Learning math is something that everyone does, to one degree or another, and doesn’t typically go onto a resume. (I learned math a whole different way than they do now in China or Japan.) What’s on your resume? How about Scapulothoracic Hypermobility? The Financial Times reports that “Banks (worldwide) shed 60,000 jobs in one of worst years for cuts since financial crisis.” I regularly receive questions about the number of LOs who have left our business. “Plenty” doesn’t ever satisfy the person asking the question, but I don’t know the exact number. Many LOs gradually scale back the number of states in which they’re licensed but continue originating: how do you count them? But a decent source is the NMLS site: knock yourself out. Anyone searching for a new company home can post their resume for free at www.lendernews.com where employers can view them for a nominal charge of $75. Today’s podcast can be found here, and this week’s is sponsored by Gallus Insights. Mortgage KPIs, automated at your fingertips. Gallus allows you to go from data to actionable insights. If you can use Google, you can use Gallus. Hear an interview with Gallus Insights’ Augie Del Rio on how lenders are benchmarking and leveraging data to make more informed analytical decisions.

Broker and Lender Programs, Software, and Products

Amazon was able to fulfill the one billion purchases made during its cyber deals event thanks to automated decision systems developed by its Supply Chain Optimization Technologies team. Much like Amazon, Dark Matter Technologies’ Empower LOS uses process automation to drive down costs and make loan production faster and more efficient. With solutions for retail, wholesale and correspondent lenders, Empower’s all-in-one functionality provides users with lights-out automation, unrivaled efficiency and exceptional borrower and user experiences in a new era of mortgage lending. Explore how Empower can transform your business.

“Did you know yesterday was National Thank You Note Day? At Optimal Blue, we couldn’t think of a better opportunity to express our sincere gratitude for our clients and partners across the industry. This includes 3,500+ originators, 1,200 lender companies (including 64 percent of the top 500 lenders), 2,400 broker companies, 260 investors, and 70+ industry vendors. While we didn’t drop handwritten cards in the mail, we are packaging up plenty of product innovations to send to you in 2024. In fact, we plan to bring you even more innovation in the coming year. And as a company that already averages 300+ product enhancement releases annually, this is not a commitment we make lightly. On behalf of the entire Optimal Blue team, we wish you a happy New Year. We can’t wait to tackle the year ahead as your trusted partner.”

“AFR Wholesale® is excited to present a unique opportunity that benefits you and your clients: the Jingle Bell Float Down. From now until 12/29/2023, lock your loans with us and enjoy the security of our special offer. With the Jingle Bell Float Down, you can lock your loan for up to 30 days. When the loan goes for final review, we’ll adjust to the current day’s rate, ensuring you get the best deal without falling below your locked price. This offer applies to all AFR’s loan programs and is available through the Correspondent Non-Delegated, Correspondent Table Funded, and Brokered Channels. *Please note, some exclusions do apply. Ready to lock in your loans? Visit the AFR Loan Center now! To learn more about this exciting opportunity, connect with AFR: visit here, email us, or call: 1-800-375-6071. Don’t miss out on this special offer: Contact AFR today!”

Tired of high fixed costs and low retail volume? Thinking of adding a correspondent channel but not sure how to do it efficiently? Blue Water (“Blue Water Financial Technologies Services, LLC”) has a comprehensive Correspondent-as-a-Service (CAAS) solution that allows firms of any size to quickly go from 0-60… fast. NonQM, Seconds, Whole Loans and/or regular way agency loans and MSRs are ALL supported. Ingest multi-seller tapes, price different product types, access agency pricing + LLPAs and price them quickly and automatically! Manage AOT, manage investors, optimize for pools, and analyze commitments all within the same system. We’ll help you integrate with your LOS for point and click onboarding, and with integrated transfer and exceptions remediation tools operations have never been easier or more reliable. From pricing, valuations, transactions, transfer, QC, to boarding, Blue Water makes it easy to scale up your origination business. Connect with our expert Sales Team.

First American: Fitch Weighs In

As reported last week in this Commentary and continuing yesterday, on Dec. 22, FAF announced via an 8K SEC filing that on Dec. 20 it had experienced a cybersecurity incident and decided to isolate certain systems. The company is actively working to restore operations and has retained outside third parties and notified law enforcement and regulatory authorities.

Last week’s cyber incident is supposedly unrelated to the May 2019 cyber incident where FAF reached a $1 million settlement with the New York Department of Financial Services in late November 2023. Four years!? Title insurance companies routinely work with sensitive personal information including bank records, and therefore data protection is critical to their operational success. The same, of course, can be said for mortgage banks, credit unions, and banks.

Gerry Glombicki, CPA, CISSP, CCSP, CISA, ARM, and a Senior Director at Fitch Ratings, writes, “First American Financial Corporation’s (FAF) recently disclosed cybersecurity incident is unlikely to affect the company’s ratings in the near term due to the significant headroom in the ratings, according to Fitch Ratings. However, the ratings could be impacted the longer business operations remain constrained, if the investigation shows weak corporate governance or risk management, or material adverse information is disclosed.

“Fitch does not believe that the recent cyber incident will materially affect FAF’s capital position or financial performance because the company is the second largest U.S. residential title insurer and a leader in the commercial title market. However, future rating actions cannot be completely ruled out until the incident is resolved and all relevant information is disclosed.

“Fitch affirmed the ratings of FAF’s senior debt ratings at ‘BBB’ and the company’s title insurance operating subsidiaries Insurer Financial Strength (IFS) ratings at ‘A’, all with a Stable Rating Outlook, on Aug. 24, 2023.”

Fannie and Freddie’s Thoughts on 2024

Many will say that economic forecasting is like driving a car blindfolded and getting instruction from a person looking out the rear window. But that doesn’t stop people and companies from taking periodic stabs at it.

If you’re hoping that lower borrowing costs will boost activity, Fannie Mae’s right there with you. But home sales will only marginally rise higher. Mortgage rates will average 6.7 percent next year, close to levels seen this summer. The housing market will see some upside in the coming years, but persistent challenges will limit a bigger shift, according to Fannie Mae’s latest forecast. “Total home sales in 2024 will come in at about 4.8 million, largely flat compared to this year’s expected level, followed by a jump to 5.4 million in 2025.

“The drivers of slow sales are well known at this point: unaffordability, lock-in effects, and a lack of existing inventories freezing much of the housing market. While we believe these dynamics will slowly dissipate over time, they will remain obstacles in 2024. Still, existing home sales will undergo a slow recovery starting next year, after they hit a likely low point in October, at a seasonally adjusted annualized rate of 3.79 million. Meanwhile, sales of new homes have also continued benefiting from the housing shortage, as well as builders’ willingness to provide mortgage buydowns.

“This trend continues into our 2024 forecast, in which we expect new home sales to decline from current levels only slightly due to a modest economic contraction,” according to the report.

While the shift in monetary policy has spurred a sharp drop mortgage rates this quarter, Fannie Mae noted a limit to how far these rates will fall: it projects that the 30-year fixed rate will average 6.7 percent in 2024, before falling to 6.2 percent in 2025. That’s down from the current level of just below 7 percent, after they soared close to 8 percent earlier this year.”

Fannie’s somewhat friendly competitor also sent out its outlook. If you don’t want to take the time to click on the link: economic growth lower than 2023, unemployment higher (stop me if you’ve heard this before), mortgage rates are expected to be in the 6-7 percent range during the year, and Freddie thinks that home prices will rise more than 6 percent. For the tens of millions of Millennials who don’t own a home yet, for-sale inventory is expected to remain depressed, and Freddie sees a slight increase in dollar volume for purchase originations while refinancing is stagnant. Lastly, Freddie believes that the U.S. Federal Reserve will start cutting rates. All pretty safe bets.

According to the ICE First Look at November mortgage performance data report, mortgage delinquencies remained historically low in November, despite a seasonal rise. While default rates remain low overall, past-due FHA loans hit a 9-year high in November (excluding a surge at the start of the pandemic) and early-stage VA delinquencies reached their highest non-pandemic level since 2009; both segments bear close watching in the months ahead. Fewer serious delinquencies, combined with low foreclosure referral rates, contributed to Foreclosure starts and active foreclosures running 23 percent and 24 percent below 2019 levels, respectively. Prepayments fell again amid the usual seasonal pullback in home purchases, combined with the residual effects of elevated interest rates.

Capital Markets

As expected, this week began with a quiet start in the bond markets. There isn’t a whole lot to report, aside from the U.S. Treasury completing a solid $57 billion 2-year note sale in the early afternoon yesterday. Additionally, the FHFA Housing Price Index was up 0.3 percent month-over-month in October after increasing a revised 0.7 percent in September. The S&P Case-Shiller Home Price Index was up 4.9 percent year-over-year in October after increasing 3.9 percent in September.

Forecasts by “the smartest guys in the room” about a housing price collapse have proven to be entirely wrong. The S&P 10-city composite rose 5.7 percent, up from a 4.8 percent increase in the previous month, and as noted above the 20-city composite rose 4.9 percent. Sure, some over-inflated markets, like San Francisco, saw a small decline, but the strength in home prices came despite a sharp rise in mortgage interest rates in October. We all know that the average rate on the 30-year fixed loan crossed 8 percent before Halloween, the highest level in more than two decades. Rates, however, dropped steadily through November and more sharply in December, with the 30-year fixed rate now hovering around 6.7. That should help prices.

Much like yesterday, the domestic highlight of today’s calendar once again will be Treasury supply, headlined by $26 billion reopened 2-year FRNs and $58 billion 5-year notes. As for economic news, it consists of just Richmond Fed’s manufacturing and services indexes and Dallas Fed Texas services, both for December, and both due out later this morning. The MBA’s mortgage application survey won’t be published but will be back next Wednesday morning and will consist of two weeks’ worth of stats. We begin the day with Agency MBS prices a touch better/higher than Tuesday’s close and the 10-year yielding 3.86 after closing yesterday at 3.89 percent.

Employment for AEs

Logan Finance Bucks Mortgage Industry Trends with Strong Q4 Growth! As the year-end fast approaches, Logan Finance finds itself in a thriving environment sparking growth that has more than doubled over the last two years. “There’s a great need for Non-QM lending and we are positioned well to handle the influx of new business,” says Aaron Samples, Logan’s Chief Revenue Officer. TPO partners, if you missed the year-end pricing special announcement, see our LinkedIn profile at Logan Finance Corporation. Mortgage broker clients can get rate discounts of up to .375 on select loan products through the end of December, so bring your deals to Logan! Logan’s growth is also fueling several new hires including Wholesale and Correspondent industry veterans Nick Pabarcus and Dave Weatherford, who will focus on recruiting and growing our network. And speaking of hiring, Logan Finance is looking for Non-QM superstar AEs, so contact Aaron Samples for hiring information. Learn more about Logan’s growth at Loganwholesale.com and Logancorrespondent.com.

“Spring EQ’s TPO division continues to experience rapid growth as demand for home equity solutions accelerates. To meet this demand, Spring EQ is excited to announce a new second lien program designed for Correspondent partners. Eligible delegated and non-delegated sellers will now have the opportunity to take advantage of Spring EQ’s competitive suite of products, including fixed-rate second mortgages and adjustable-rate HELOCs. Explore Spring EQ job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages. So, think of us first for all your seconds. Want to become a Spring EQ Correspondent partner? Click here to get started.”

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Source: mortgagenewsdaily.com

Apache is functioning normally

In this article, we will take a look at the 20 best states for construction jobs in the US. If you want to skip our discussion on the construction industry, you can go directly to the 5 Best States for Construction Jobs in the US.

The construction sector serves as a significant indicator of economic activity, providing valuable insights into the overall health of an economy. Despite encountering challenges such as rising material costs and supply chain disruptions, the residential construction sector is experiencing a positive turn in 2023. According to Global Data, the size of the US construction market was $2.1 trillion in 2022. The report predicts a steady average annual growth rate of at least 4% for the next four years. The primary sectors within the US construction market include residential, commercial, industrial, institutional, infrastructure, energy, and utilities construction.

Homebuilder companies’ stocks are rising as investors anticipate Fed rate cuts. Earlier this month, the Federal Reserve indicated plans for three rate cuts in 2024. Furthermore, last week, mortgage rates dropped below 7% for the first time since August, which renewed momentum in the housing market. Popular builder stocks like Lennar Corp. (NYSE:LEN) and DR Horton (NYSE:DHI) have shown over 60% growth in 2023, while PulteGroup (NYSE:PHM) has risen by over 120%. You can check out the 13 Most Profitable Real Estate Stocks here. The positive shift in market sentiment is credited to the increasing demand for new homes, driven by buyer preferences and mortgage rate reductions that make new homes more appealing compared to used homes. This growth in demand is further supported by employment data. Unemployment in the construction sector, which reached its peak at 16.6% in March 2020, decreased to 4.8% in November 2023 after reaching 6.9% in January 2023.

Here’s what Baron Funds said about Lennar Corp. (NYSE:LEN) in its Q2 2023 investor letter:

“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation (NYSE:LEN), and D.R. Horton, Inc. – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.

Year-to-date, each company has witnessed a meaningful uptick in demand to buy homes:

Home buyers continue to come off the sidelines and buy homes despite 30-year mortgage rates remaining in the 6.5% to 7.0% range. Several factors are contributing to the recent strength, including pent-up demand to buy homes and fears that mortgage rates could move higher. • The sticker shock of rapidly rising mortgage rates appears to have cooled down. Homebuilders have made homes more affordable to prospective home purchasers by offering mortgage rate buydowns to the mid-5% mortgage rate range while maintaining strong profitability margins. • A dearth of inventory in the existing home market and an overall housing supply shortage is driving home buyers to “stretch their wallet” due to fears that they could miss the opportunity to buy a home.

We remain optimistic about the long-term potential for the Fund’s investments in Toll Brothers, Lennar, and D.R. Horton for several reasons…” (Click here to read the full text)

According to the US Bureau of Labor Statistics, Wyoming, North Dakota, and Montana are identified as the best states for construction jobs on the basis of location quotient. The location quotient is a metric employed by the Bureau of Labor Statistics (BLS) to assess the level of concentration of a specific industry within a particular state in comparison to the entire nation. The industry’s overall outlook is optimistic, and the construction sector is predicted to experience significant growth throughout 2024. With this context in mind, let’s see which state has the most construction work 2023.

20 Best States for Construction Jobs in the US

Aerial view of a construction site for a single family detached home.

Our Methodology

To identify the 20 best states for construction jobs in the US, we referred to the US Bureau of Labor Statistics for the latest state-specific data on location quotient and average annual salary. Location quotients are ratios that provide insights into an area’s employment distribution by industry. A location quotient higher than 1 signifies that an industry holds a larger share of local area employment compared to the national average. The 20 best states for construction jobs in the US have been ranked in ascending order of their location quotients.

By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.

20. Texas

Location Quotient: 1.14

Average Salary: $49,760

Texas ranks 3rd in the US in terms of population growth rate as of 2023. The average annual salary for construction workers in the state stands at $49,790. Texas emerged as one of the leading states in the construction industry, adding over 21,000 jobs in 2023.

 19. Nebraska

Location Quotient: 1.16

Average Salary: $51,250

In 2023, the total construction value in Nebraska’s economy amounted to $3.91 billion, with a corresponding Gross State Product (GSP) of $126 billion. The average annual salary for a construction worker in Nebraska stands at $51,250.

18. Arizona

Location Quotient: 1.16

Average Salary: $52,470

In 2023, the total construction value in Arizona reached $13.94 billion, while GSP stood at $136.2 billion. Despite the challenges in construction growth, Arizona maintained a 5-year average annual employment growth rate of 2%. Real estate and rental and leasing are amongst the top employment segments for the state.

17. Vermont

Location Quotient: 1.17

Average Salary: $52,062

The total construction value in Vermont amounted to $893.91 million in 2023, experiencing an annual growth of 1.3%. The GSP for the same year reached $30.2 billion. However, Vermont faced a challenge in employment growth, with a 5-year average annual rate of -1%.

16. Oklahoma

Location Quotient: 1.19

Average Salary: $49,820

The GSP of Oklahoma for 2023 was $195.2 billion, while the value of total construction was $4.4 billion. This was a decrease of 6.4% on an annual basis, while the five-year annualized decline was 4.5%.

15. Hawaii

Location Quotient: 1.19

Average Salary: $77,850                                    

The contribution of total construction to Hawaii amounted to $2.64 billion. The five-year annualized growth for construction experienced a decline, contracting by 7.5%. Despite these challenges, Hawaii’s GSP remained at $76.5 billion.

 14. Washington

Location Quotient: 1.22

Average Salary: $73,140

With a GSP of $577.2 billion, the value of the construction sector in the state was $21.28 billion in 2023. The five-year annual growth rate for the construction sector in the state was 3.7%. Meanwhile, the average annual employment growth rate for the state was 1%.

13. Colorado

Location Quotient: 1.24

Average Salary: $57,430

The contribution of the construction sector to Colorado’s economy was $17.41 billion, while the total GSP was $371.3 billion in 2023. This was an increase of 0.9% year on year. Over the past five years, the average annual employment growth rate in the state was 1.4%.

 12. Maine

Location Quotient: 1.26

Average Salary: $52,350

Maine is at the twelfth position on our list of the 20 best states for construction jobs in the US.  The average annual salary for a construction worker in the state is $52,350. Maine’s GSP in 2023 was recorded at $65.5 billion.

11. South Dakota

Location Quotient: 1.33

Average Salary: $47,170

In 2023, South Dakota’s GSP amounted to $50.5 billion. The construction sector contributed $1.43 billion to the GSP, experiencing a negative growth rate of -3.1% for the year. Over the past five years, South Dakota had an average annual employment growth of 1.0%.

10. Nevada

Location Quotient: 1.34

Average Salary: $61,570

Nevada is among the top 10 best states for construction jobs in the US. The value of total construction in Nevada was $9.08 billion during 2023, with an annualized 5-year growth rate of 0.4%. The GSP for the same period was $170.1 billion.

9. Louisiana

Location Quotient: 1.43

Average Salary: $50,350

Louisiana’s GSP was recorded at $219.1 billion for 2023. The construction sector contributed $7.08 billion to the GSP. The state experienced a five-year average annual employment growth of -0.4%.

8. West Virginia

Location Quotient: 1.47

Average Salary: $52,740

The GSP of West Virginia for 2023 was recorded at $71.7 billion, with an annualized 5-year growth rate of 0.1%.  The contribution of the construction sector to the GSP was $2.28 billion. The state experienced a five-year average annual employment growth of -0.4%. The major employment sectors in West Virginia include mining, healthcare and social assistance, and manufacturing.

7. Idaho

Location Quotient: 1.48

Average Salary: $49,620

Idaho is amongst the fastest-growing US states in terms of population. Idaho’s gross state product for 2023 was $85.7 billion, with an annualized 5-year growth rate of 15.3%. The contribution of the construction sector to the GSP was $3.71 billion in 2023. The five-year growth rate for the construction sector in the state is 4.1%.

6. Utah

Location Quotient: 1.52

Average Salary: $52,380

Utah is the fastest-growing US state in terms of GSP and the second in terms of population growth. Its GSP for 2023 was $185.2 billion, with an annualized 5-year growth rate of 3.7%. The contribution of the construction sector to the GSP was $11.83 billion during 2023. Over the five-year period, the construction sector achieved a growth rate of 5.9%.

Lennar Corp. (NYSE:LEN), DR Horton (NYSE:DHI), and PulteGroup (NYSE:PHM) are some of the popular builder stocks contributing to the growth of the construction industry.

Click to continue reading and see the 5 Best States for Construction Jobs in the US.

Suggested articles:

Disclosure: None. 20 Best States for Construction Jobs in the US is originally published on Insider Monkey.

Source: finance.yahoo.com

Apache is functioning normally

The cost of living in Minneapolis is on the rise, but it’s still affordable given the big city amenities it offers residents. More than 420,000 people call this Midwest city home.

Right now, the average rent in Minneapolis for a one-bedroom apartment is 1.88 percent higher on average than in Chicago. While the cost of living is 5.1 percent above the national average, this is quickly changing as housing demand increases with newcomers.

Photo source: Meet Minneapolis

Housing costs in Minneapolis

Minneapolis’ housing market — whether you’re renting or buying — has remained relatively steady over the past year. The average rent in Minneapolis has gone up 0.2 percent to $1,444 per month for a one-bedroom in the past year. This average rent fluctuates dramatically per neighborhood and amenities offered.

Living in Cedar Isles – Dean and North Loop is among the most expensive. The average rent for a one-bedroom in Cedar Isles – Dean is $2,759 while living in North Loop is in the $1,800 a month range. Neighborhoods closer to the average range in Minneapolis include Corcoran, Loring Park and Lyn-Lake.

If you’re looking to stay within Minneapolis and save a little on rent, you can find an apartment in Como and Elwells for about $900 a month on average or South St. Paul for $851 per month.

The average home price in Minneapolis at this time is $325,000. However, this is mainly dependent on the neighborhood. As of April 2021, home prices are up 7.6 percent compared to last year, according to Redfin. Most homes sell in fewer than 12 days.

Photo source: Meet Minneapolis

Food costs in Minneapolis

From its walleye to Scandinavian dishes, Minneapolis is known for everything from its comfort food and food trucks to fine dining restaurants.

Minneapolis’s cost of living for groceries is 2.6 percent above the national average. Expect to see eggs for $1.81, ground beef for $4.40 a pound and bread for $2.31.

Dining out at an inexpensive restaurant is about $16 a person while a pint of domestic beer is around $6, not including tip.

Utility costs in Minneapolis

Minneapolis tends to have warm and wet summers while winters are freezing and windy with snowy days and nights.

Minneapolis’ utility prices are 2.8 percent below the national average. You can expect your total energy costs of around $160.63 each month.

For the internet, the city has a limited amount of providers, but your bill will hover around $61.97 a month.

The state of Minnesota’s electric and natural gas utilities offer some rebates and incentives for customers if homeowners or renters want to make their spaces more energy-efficient. The Weatherization Assistance Program (WAP) provides assistance for income-qualified households with free home energy upgrades for homeowners and renters.

Photo source: Meet Minneapolis

Transportation costs in Minneapolis

Minneapolis ranks No. 77 as the most congested city in the United States. Drivers lose about nine hours a year and $133.71 sitting in traffic. The average commute is 27 minutes, according to a recent study. If you have to park, expect to spend $7.36 for a two-hour parking spot, on average.

Luckily, it’s easy to get around Minneapolis without a car. The city is in a grid layout and several buses crisscross the city. The Minneapolis METRO Light Rail offers 43 stops, including the Mall of America and terminals 1 and 2 of the MSP Airport. Buses offer even more coverage, with over 120 bus routes in the Twin Cities and surrounding area.

Its Nice Ride program is a fun, easy and affordable way to get around on two wheels. For just $2.50 a ride or $89 a year membership, more than 3,000 bikes or scooters are available at 400 stations.

Minneapolis‘ walk score is 75 but its bike score is a healthy 83 thanks to many neighborhoods with great paths and bike lanes. Its transit score is 57.

All in all, the cost of living for transportation in Minneapolis is right in line with the national average.

Healthcare costs in Minneapolis

Abbott Northwestern Hospital is nationally ranked in two adult specialties. As a teaching hospital, it’s also rated high performing in six adult specialties and 10 procedures and conditions, according to U.S. News and World Report.

Minneapolis healthcare costs are 2.2 percent higher than the national average.

While it’s tough to share an average for overall healthcare since each person’s healthcare needs will be different, a regular doctor visit costs $147.85 on average while a prescription drug can set you back $437.87 on average (without insurance of some kind).

You can pick up ibuprofen at your local pharmacy for $11.90 on average.

Goods and services costs in Minneapolis

Beyond essential bills, Minnesotans can expect to spend 11.2 percent above the national average on goods and services across different categories.

While many neighborhoods throughout Minneapolis are pet-friendly, expect to spend around $65.82 on average for vet services.

Enjoy practicing yoga? A pop-in yoga class is around $22.57, although you can save money by buying in bulk or becoming a member.

There are also plenty of exercise facilities throughout the city and some apartment buildings offer a fitness facility on their properties as an amenity.

Taxes in Minneapolis

The Minnesota state sales tax rate is currently 6.875 percent and depending on local municipalities, the total tax rate gets as high as 8.375 percent. In Minneapolis, the sales tax rate is 8.025 percent, broken down as follows: Minnesota State: 6.875 percent; Hennepin County: 0.150 percent; Minneapolis: 0.500 percent; Hennepin County Transit: 0.500 percent.

For example, a laptop computer on sale for $1,000 will cost 1080.25 with taxes.

Minnesota’s income tax is a graduated tax with four rates currently: 5.35 percent, 7.05 percent, 7.85 percent and 9.85 percent. Rates apply to income brackets — varying by filing status.

How much do I need to earn to live in Minneapolis?

Most financial advisors recommend keeping your rent payment at 30 percent of your gross income or less. You would need to make at least $57,800 annually to afford a one-bedroom apartment in Minneapolis. Currently, a one-bedroom costs $1,445 per month on average.

For perspective, an average Minneapolis resident makes around $71,000 a year. Want to know where you stand with your current budget? Use our rent calculator to get a high view of how it would change after moving to Minneapolis.

Living in Minneapolis

Minneapolis residents enjoy living in an affordable city and having easy access to nature and the outdoors as well as great food, a vibrant indie music scene and big-city amenities.

If Minneapolis is calling your name, you can find great apartments for rent or homes to buy here today.

Cost of living information comes from The Council for Community and Economic Research.
Rent prices are based on a rolling weighted average from Apartment Guide and Rent.’s multifamily rental property inventory of one-bedroom apartments in April 2021. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

As a Chicago-based freelance writer, Megy Karydes has covered everything from space-aged tomato seeds grown in a Chicago Public School to Chicago Blues musician Lurrie Bell. Her work has been featured in USA Today, Travel + Leisure, Midwest Living magazine and other national and regional media outlets. When she’s not out exploring the city with her two children and husband, she’s perfecting her air hockey technique.

Source: rent.com